Bitcoin For Dummies
Until now, for anything to be legal tender it had to be backed up by an equivalent quantity of gold. That is the basis of currency as we know it. Since money unknown to us has changed a whole lot in the past few decades to a point where the only reason the strips of paper in your pocket have any value is because of the government enforcing them. Sounds scary, isn’t it.
We have a few people who realize the dangers of fiat and decided to create a peer-to-peer network of cryptocurrency that is in essence governed by no one else other than the holders of the currency itself. This decentralized system gave birth to what is now Bitcoin. A way to transfer cryptocurrency between users. Since Satoshi nakamoto's revealed Bitcoin way back in 29, a lot of things have changed.
Let's take a look at some of the most interesting Bitcoin facts. Bitcoin is a cryptocurrency, this means that there is no physical asset behind Bitcoins. It is a currency system that holds value because people believe in the buying power of it. There are only a finite number of Bitcoins, in fact the total number is just 21 millions.
There are already Bitcoin billionaires the Winklevoss twins became the first known Bitcoin billionaires when their 11 million dollar investment into Bitcoin way back in 2013 made way to billions. And the current valuation of a whopping 16,200 dollars for one Bitcoin. Bitcoins are based on the blockchain technology, very simply this means that for one Bitcoin to be mined a complex algorithm has to be solved which requires a lot of computing power. The resulting Bitcoin now becomes part of the blockchain and whenever any transactions occur they recorded.
It is perfectly legal to buy and use Bitcoins in most countries around the world. In fact some giant corporations like Microsoft and WordPress accept Bitcoins as modes of payment. So now that we have dealt with the legality of Bitcoin the skeptics among you may be wondering but is it really safe to invest in Bitcoin?. We heard it is a bubble what if it bursts as in crashes. Well first off yes, you did here right. There are several very well-regarded economists who have stated that the current straight of Bitcoin is very similar to a bubble. One of the main reasons though for a bubble to explode and the currency to come crashing down is if it loses the fate of investors.
Now while it seems unlikely right now there is certainly a chance that it might happen. Even then as past financial bubbles have shown us there is a claim even after a fall. So if you want to invest in Bitcoin or have already done, so don't panic if the market value has a sharp dip. Now that you have a fairly good idea of Bitcoin and how it works and how stable its future is, some of you might want to buy some to try out this brand-new cryptocurrency for yourself. The easiest way to do that is through a bitcoin exchange.
We think Bitcoin does have a great future. So if and when a crashing price comes along or there is a hard fork in the blockchain, it would be profitable to jump onto the Bitcoin train as fast as possible. So, that's just what our opinion. Do you guys want to invest in Bitcoin?, let us know in the comments below. And as always, thanks for reading.