Many people are struggling to grasp the concept of Bitcoin after it became a household name. Over the recent years, Bitcoin has evolved from an underworld virtual currency to a new investment craze.
In simple terms, Bitcoin is a digital currency without the backing of any physical value. Interestingly, Bitcoin was development to make illegal online transactions possible.
It has for long been shunned as a criminal currency.
They are many more digital currencies, popularly known as cryptocurrencies. Bitcoin is the most popular among them all.
Value of Bitcoin
In the recent years more and more people have continued to embrace the use of Bitcoin, as it presented quick ways of completing online transactions.
Bitcoin enables the transfer of funds across continents very swiftly. Also, Bitcoin has continued to rise in value with the value of one coin currently above $10000.
The progressive value gain of Bitcoin attracted many investors to the Bitcoin trade, and many have so far reaped significantly from it. The value keeps fluctuating with small margins. This fluctuation has enabled bitcoin exchange to become a significant and robust industry.
The value of one bitcoin is rather high for most people to buy it. However, it can be broken down into 100,000,000 units to have 0.00000001 bitcoins.
These small units enable everyone to engage in bitcoin trade, as well as buy and sell products in bitcoin. Traditional forms of online payment-operate from one point or company. However, no specific company operates the Bitcoin currency.
The data about all bitcoin available is equally present in multiple computers around the world, and the all these computers keep track of all transactions involving bitcoin.
These computers, therefore, act as watchdogs over each other, such that nobody can manipulate the bitcoin amounts.
This computer network is what is referred to as blockchain.
Importance of Bitcoin
Bitcoin has a myriad of merits in the current online trade setting. As mentioned earlier, it started off as a criminal currency. It has however proved itself as a great and useful invention.
- First, the inventor of Bitcoin, a Japanese named Satoshi, is hailed for having brought a solution to one of the most significant challenges of moving value online. Traditional means of transferring funds online are operated from one central point. The operators this central point can alter the data hence affecting the value stored. However, the bitcoin blockchain technology this is practically impossible. In lay-man’s terms, blockchain is like a group of friends around a cake, and each friend has their own piece. They can choose to eat it, give it to their friends or exchange it for something else with the friends. However, none of the friends can bring in a different cake from elsewhere or remove a piece from the table, since everyone is watching.
- Bitcoin has also defeated any attempts by governments to control it. That is why it finds a lot of favor within criminal elements. The behavior of the currency is therefore purely affected by market forces rather than any sort of regulations. Physical currencies are easily regulated by governments. The blockchain technology bypasses any form of external interference and has charted a path of its own. Rouge government have been printing fiat currencies before to fiancé their activities. However, if bitcoin could replace these fiat currencies, then it would be impossible for the governments to generate money whenever they feel they need some.
- Many have also been wary of the security of their funds held in bitcoin. These fears are unwarranted as the security protocol of the bitcoin technology is way superior than that of bank account. Some of the software around it are still under development as new ideas continue to unravel. It is true that there has been cases of hacking of trading companies and bitcoin funds transferred. There, have been the same kind of infiltrations on banks too and people have lost millions.
3 Interesting Facts About Bitcoin
1. One of the most exciting facts about bitcoin revolves around its creator Satoshi Nakamoto. The character is still shrouded in mystery as no one has ever come out confirm they know someone with such identity.
The name has been linked to several people over the years, but none has ever been confirmed. Satoshi is suspected of owning over 1 million bitcoins; whose value is approximately $2billion.
2. Bitcoin transactions are anonymous. This is why it is used by criminals. The address to a bitcoin digital wallet is a set of alphanumeric code. It is therefore impossible to identify neither the sender nor the recipient.
The wallet provider programs assign random portfolio ID, that is primarily used to distinguish the wallet from others. The digital wallets are connected to the blockchain and are not operated by any particular company.
3. In the midst of millions of illegal items purchased using bitcoin, the first legal transaction of Bitcoin involved the purchase of a pizza.
A piece of pizza worth $25 was paid for using 10,000 bitcoins. The first ever transfer of bitcoin was carried out by Satoshi to a fellow named Hal Finney back in 2009.
The popularity of bitcoin has triggered reactions from various interested quarters over the years. Influential people have sought to join the conversation and offer their input.
Professionals, experts, authorities and many others have had their say about bitcoin in diverse platforms.
The bitcoin conversations have attracted fierce supporters and critics in equal measure.
Below are 20 famous quotes about bitcoin collected from various people across the globe.
1. “Bitcoin is a techno tour de force.” – Bill Gates
2. “Bitcoin is a remarkable cryptographic achievement and the ability to create something that is not duplicable in the digital world has enormous value.” – Eric Schmidt (Google CEO)
3. “Bitcoin is a very exciting development, it might lead to a world currency. I think over the next decade it will grow to become one of the most important ways to pay for things and transfer assets.” – Kim Dotcom (CEO of MegaUpload)
4. “We have elected to put our money and faith in a mathematical framework that is free of politics and human error.” – Tyler Winklevoss (Co-inventor of Facebook)
5. “Bitcoin actually has the balance and incentives right, and that is why it is starting to take off.” – Julian Assange (Founder of Wikileaks)
6. “So bitcoin is cyber snob currency…” – William Shatner (Actor in Star Trek TOS)
7. “Virgin Galactic is a bold entrepreneurial technology. It’s driving a revolution and Bitcoin is doing just the same when it comes to inventing a new currency.” – Sir Richard Branson (Founder of Virgin group of companies)
8. “I really like Bitcoin. I own Bitcoins. It’s a store of value, a distributed ledger. It’s a great place to put assets, especially in places like Argentina with 40 percent inflation, where $1 today is worth 60 cents in a year, and a government’s currency does not hold value. It’s also a good investment vehicle if you have an appetite for risk. But it won’t be a currency until volatility slows down.” – David Marcus (CEO of Paypal)
9. “I think the fact that within the bitcoin universe an algorithm replaces the functions of [the government] … is actually pretty cool. I am a big fan of Bitcoin.” – Al Gore (45th Vice President of the United States)
10. “Bitcoin may be the TCP/IP of money.” – Paul Buchheit (Creator of Gmail)
11. “I am very intrigued by Bitcoin. It has all the signs. Paradigm shift, hackers love it, yet it’s derided as a toy. Just like microcomputers.” – Paul Graham (Yahoo Store)
12. “Bitcoin will do to banks what email did to the postal industry.” – Rick Falkvinge (Founder of the Swedish pirate party)
13. “Right now Bitcoin feels like the Internet before the browser.” – Wences Casares (Founder of Banco Lemon)
14. “[Virtual Currencies] may hold long-term promise, particularly if the innovations promote a faster, more secure and more efficient payment system.” – Ben Bernanke (Chairman of the Federal Reserve)
15. “I do think Bitcoin is the first [encrypted money] that has the potential to do something like change the world.” – Peter Thiel (Co-Founder of Paypal)
16. “There are 3 eras of currency: Commodity based, politically based, and now, math based.” – Chris Dixon (Co-founder of Hunch now owned by Ebay, Co-founder of SiteAdvisor now owned by McAfee)
17. “Entire classes of bugs are missing.” – Dan Kaminsky (Security Penetration Expert for Cisco and Avaya)
18. “It’s money 2.0, a huge hugehuge deal.” – Chamath Palihapitiya (Previous head of AOL instant messenger)
19. “You can’t stop things like Bitcoin. It will be everywhere and the world will have to readjust. World governments will have to readjust.” – John McAfee
20. “Bitcoin is here to stay. There would be a hacker uproar to anyone who attempted to take credit for the patent of cryptocurrency. And I wouldn’t want to be on the receiving end of hacker fury.” – Adam Draper
21. “If there is one positive takeaway from the collapse of Mt.Gox, it is the willingness of a new generation of Bitcoin companies to work together to ensure the future of Bitcoin and the security of customer funds.” – Brian Armstrong (CEO of Coinbase)