Bitcoin is a cryptocurrency. It’s a somewhat less traditional form of money, but yes, it really is that simple. On the slightly more technical side of things, a single Bitcoin, 1 BTC, is a string of information, much like numbers and letters, that you can keep in an electronic wallet. All transactions are maintained on a ledger that is copied into every wallet, save for a few special clients that are designed to be lightweight. Meanwhile, a United States Dollar bill is approximately 75% cotton.
The history of Bitcoin
The idea for a cryptocurrency, such as Bitcoin, was proposed by Wei Dai as far back as 1998, but it wasn’t until 2009 that Bitcoin became a reality thanks to a guy named Satoshi Nakamoto. Many websites, such as Satoshi Bet, have been named after him. The idea of creating a cryptocurrency was to be able to create a currency with a real world value that could be privately traded. The underlying system is rather complicated, but it works well enough that around $20 million worth of BTC are traded per hour on average. This decentralized system works, and it speaks for itself rather well, albeit with implicit anarcho-undertones.
In the early months and years, any sort of investment into Bitcoin was senseless. It was something that would have to be created from the ground up.
You were sure to lose your money. The fear was, Bitcoins would be lost somewhere in the networked sea of the internet. Cash would be lost to bugged code, stolen by hackers, or left to grow stale in a poor and underground internet market. The user base began with small collectives of computer geeks, a relatively small market. There was no initial mass appeal, and legitimacy had to be earned. While the idea was seemingly foolish, it was completely legal, and it was fun, in an outlaw kind of way, the Wild and metaphorically too far West of the internet.
There’s been novelty to Bitcoin from the very beginning, but it was the potential and proven stability of the system that drew the investors slowly in. The creators would have been called overly optimistic if their goal was to reach its recent market cap of between 11 and 14 million USD, but since the beginning their dreams were bigger and further reaching. There is no sure height that Bitcoin will rise to or stop at. The future of Bitcoin and other cryptocurrencies lie in the hands and wallets of a growing network of people and machines.
Now that it has grown rather large, one thing people seem to occasionally question is the legality of Bitcoin. For those that are still wondering, Bitcoin is perfectly legal, but tax evasion and money laundering are not. There is a type of increased freedom that comes with having an unregulated currency that can be traded anonymously. Across the globe, this freedom has undoubtedly created new possibilities and markets, and with it, the potential to do great and sometimes questionable things. The choice is in the hands of the individual.
What does the future hold?
Bitcoin and other cryptocurrencies have only just begun. There is no telling the exact future of Bitcoin, but the end is nowhere in sight. Bitcoin is certainly heading in the direction it was intended to, while picking up momentum along the way. Any sort of significant investment is still for the bold, but regret may also come to the casual observer who only watched something grow. For now, Bitcoin is, at the least, a bemusing infant currency.