Now, let’s talk about the elephant in the room.
A few years ago, I was one of those who does not care about Bitcoin. I was resistant and conservative, or maybe, I was just scared because of lack of knowledge.
Then, I attended a Wealth Seminar in Singapore last December 2019, and crypto currency was one of the primary focus there. The world of Bitcoin and Cryptocurrency were suddenly opened to me. I was in awe. Then, I continue studying it more after that. From all my learning, I asked myself this question: Why have I not looked at this much more earlier? If only I have looked into this much earlier, I said to myself, I could have gotten in in much cheaper price.
But, anyway, as they say, better late than never.
So, here it goes. Let me now, introduce to you – Bitcoin and Cryptocurrency.
Let us start in the beginning.
What is Currency?
Currency means “money currently in use.”
Philippine Peso, US dollars, European euros, Russian rubles, and the Japanese yen are all government created money known as “fiat currency”. “Fiat” just means an official order or authorization.
For approximately 4,000 years and across the globe, people used shells known as “cowries” as currency. They were beautiful, unique, and yet could not be manufactured.
Later (almost 2,000 years ago), in and around Egypt, wheat was used as a currency. Wheat, being a common and important part of our diet, was valuable, portable and exchangeable.
Today, governments authorize their bills as legit, and because we have faith in our governments and banks, we use their money. Ultimately, the paper bills are just paper – backed by confidence or people’s belief that they are of value.
What about Cryptocurrencies?
Crypto- is short for “cryptography”, a computer technology used for securing and hiding information, among other things.
Cryptocurrency is defined as electronic money made with technology to:
- Control how it was made;
- Protect transactions;
- Hide the identities of its users;
The technology around cryptocurrencies effectively give them the same traits as regular, cold hard cash.
Cryptocurrencies are not made out of thin air. Instead, people have their computers work many hours and expend massive amounts of electricity to “mine” the digital money. They solve mathematical equations. More on that later.
What is Bitcoin?
Bitcoin is a digital currency that was created in 2009 by an individual using the alias Satoshi Nakamoto. No one knows who Satoshi is, the developer could be a person, or a group of people.
Much like any other currency, Bitcoin derives its value from its ability to be exchanged for goods and services.
As the number of Bitcoin users rises, demand for it grows exponentially. This is why Bitcoin is currently – the world’s largest cryptocurrency by market cap and has inspired a number of other projects in the blockchain space.
What is Block chain?
Blockchain is like a digital record book that guarantees accuracy in every transaction. Any and all changes made to the blockchain must be verified by everyone who has access to it.
As such, blockchain can be applied in any industry where information must be documented securely. In the case of Bitcoin, the blockchain is a decentralized public ledger where all Bitcoin transactions are recorded. There are no physical bitcoins, only balances kept on the blockchain that are verified by high-powered computers.
The integrity and chronological order of the blockchain are reinforced with cryptography , hence the term cryptocurrency .
A bitcoin transaction is a transfer of value between bitcoin wallets that is recorded in the blockchain. Each wallet possesses a private key, which is used to sign transactions and verify that the transaction came from the owner of the wallet.
Bitcoin mining is performed by powerful computers that are able to solve complex computational math problems. These problems are so complex that they are impossible to solve by hand and can even tax some very powerful computers. By mining Bitcoin, more of it is produced and the payment network is made more trustworthy and secure. The primary reason why people mine for bitcoin is the possibility of being rewarded with valuable bitcoin tokens . This reward is an incentive that motivates people to assist in the main purpose of mining: to support, legitimize and monitor the Bitcoin network and its blockchain.
A huge benefit that Bitcoin offers its users is that Bitcoin transactions are peer-to-peer. This means that when a transaction happens, the Bitcoin is sent directly from the sender to the receiver with no facilitating middle man. Without the need for a third-party financial institution (ex. A bank), Bitcoin users have the ability to transact with anyone in the world at any time without having their privacy breached, and at lower costs.
Nosebleed? I understand.
Let this simple video help you understand Bitcoin, Crypto currencies and Block chain.
https://www.youtube.com/watch?v=kubGCSj5y3k
From the making of the video last 2016, the value of Bitcoin that time was $ 400-700 per bitcoin or roughly about Php 25,000 per Bitcoin, now, if you want to ask, as of today June 2020, 1 Bitcoin is $9,026 per Bitcoin or 1 Bitcoin = Php448,111.
Now, you understand why I said, I should have known this much earlier.
That’s it for now, watch out to the next part of this series and see how you can create your very first pot of gold through Bitcoin.
Learning with you,
Read More:
- What are the FAQs About Bitcoin (Bitcoin Part 2)
- Where to buy Bitcoin in the Philippines (Bitcoin Part 3)
- If Traditional School Doesn’t Teach Money, How Do We Fill in the Gap?
- Dos and Don’ts on How To Avoid Credit Card Fraud
- What Can We Do to Survive The New Normal?
Sources:
https://money.cnn.com/infographic/technology/what-is-bitcoin/index.html
https://www.investopedia.com/terms/b/bitcoin.asp
https://bitcoin.org/en/how-it-works
https://www.investopedia.com/tech/how-does-bitcoin-mining-work/#what-is-bitcoin-mining
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