An Introduction to Bitcoin
Published by Trine Pederson
Bitcoin has become a frequently discussed topic among investors, entrepreneurs and traders. For a simplified explanation: Bitcoin is a digital currency not controlled by a central authority like a central bank or government. It’s created by “miners” using computers to process transactions and collect bitcoin in exchange. Among supporters of Bitcoin, its highlighted as a secure transaction method that rely on technology recording cryptocurrency transactions on the internet.
The beginning of Bitcoin
Early trace of Bitcoin was found in 2008, when the pseudonym Satoshi Nanamoto published a report on the concept of digital currency that he called Bitcoin. Following this, more people started to work on the concept.
Some of the early challenges of the concept was the potential double usage of same digital dollar. Such challenges raised early demands of clearinghouse to control and ensure transactions; if someone spends a digital dollar it will not be possible to spend it again and prevents risk of fraud.
Until today, the real identify of Mr. Nanamoto remains unknown as sufficient evidence doesn’t exist.
How Bitcoin are “mined” and used
The specific Bitcoin software is used to validate the transaction by cracking cryptographic puzzles, and the first to solve the transaction puzzles would be awarded 50 new Bitcoins.
The new Bitcoin can hereafter be stored in variety forms of “wallets” on the computer. Some of today’s largest businesses to accept the digital currency includes: Overstock and well-known Expedia.
Transactions and concerns by famous investors
In 2010, first transaction has reported of using 10,000 Bitcoin to buy pizza. In August 2017, 10,000 Bitcoin are worth nearly $43 million.
In 2013, the twins Cameron and Tyler Winklevoss (who sued Mark Zuckerberg for Facebook being based on their fundamental idea) invested $11 million into Bitcoin hoping for a win overtime.
In 2014, Bitcoin experienced significant raised concerns about its security. A reported loss of about $460 million was stolen after the alleged hacking of Bitcoin exchange Mt. Gox.
In 2014, Warren Buffett said in an interview with CNBS “Stay away from it. It’s a mirage, basically”.
In 2016, Richard Branson said at Virgin Disruptors event in London “Well, I think it’s working”, but acknowledge the currency’s volatility.
In 2017, the currency of Bitcoin has risen more than 200%. In same year, it reached it yet highest peak of $3,000, while shortly after dropped by $500.
In 2017, Fidelity Investments standout among other financial institutions as officially supporting Bitcoin and other cryptocurrencies.