The internet, when it began, had its own doubters and naysayers. Back then, it was inconceivable to give value to something that was shared, open to all, intangible, and relied heavily on the participation of a massive amount of people. “The internet bubble will burst”, they would say. And a few decades later, the fastest growing multi-trillion dollar platform proved them wrong. People can’t help but notice the similarities of how the internet rose and the current revolution that is cryptocurrency.
Cryptocurrency, in its most popular form, bitcoin, has its own detractors, and even saboteurs. It was hard enough for people then to put value on an intangible entity like the internet for one, now people had put value on something is not just intangible but literally has only as much worth as people give it. But that’s just how economic currency works. The fact that now, one bitcoin is equivalent to $7000, speaks volumes on how much people value the fast rising currency.
Cryptocurrencies is an amalgam of words “cryptography” and “currency”. The latter, is a system of money used almost exclusively by particular countries. While the former, is a branch of computer science aimed to encrypting or concealing data. Cryptocurrency is a digital currency that stores transactions on a distributed system. It uses cryptography to ensure the system’s integrity and prevent people from directly affecting the data.
As mentioned earlier, bitcoin is the most popular form of cryptocurrency. It was started in 2009, with the aim of removing the banking institutions from transactions involving money. Thomas Jefferson once said, “I sincerely believe that banking establishments are more dangerous than standing armies, and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.”. It is from this drive that bitcoin was formed to counter the over-reliance on banks. Today, millions of bitcoins are in circulation. And its value keeps rising in drastic pace.
The block chain is the backbone of the bitcoin. It is a colossal distributed system that hosts all bitcoin transactions. It is robust and incorruptible. But most importantly, to hack it, a hacker will need an almost impossible amount of computing power to sift through the entirety of the block chain. This integrity is what made the bit coin especially attractive as a form of digital currency.
To own bitcoins, one must have a wallet. Not dissimilar to a regular wallet as this is where bitcoins are kept. But the comparisons end there. A bitcoin wallet has with it all the conveniences of the digital application. It can be an app on a phone or a service offered by a website. Like any other currencies, bitcoin can be obtained by accepting them as payment for goods or services. One may also buy bitcoins using more traditional currencies like the US dollar. But what’s most peculiar, is obtaining bitcoins through mining.
Mining bitcoins is a process of devoting computing power into solving extremely complex mathematical problems and obtaining bitcoins as a reward. In the process, transactions are repeatedly being validated which helps in ensuring the integrity and security of the block chain. There are only a limited number of bitcoins. Twenty one million, to be exact. And like actual mining, luck and effort plays into account in competing for bitcoins.
The world have already has already felt the effects of bitcoins. Several establishments are now accepting bitcoins as payment. And mining modules are now being sold in stores for bitcoin mining specific platforms. If it all works out in the future, when all bitcoins are mined, and the majority of the marketplace accept bitcoin as payment, we may have to be buy ice cream in Satoshis (A millionth of a bitcoin).