The idea behind bitcoin is that money does not have to be a physical currency. Rather, it should be anything that others accept as payment in return for their goods or services. Bitcoin is a cryptocurrency, meaning it uses mathematical cryptography equations to determine how many bitcoin there are and where they are sent. It is an open source currency, which means it is not controlled by a central bank or by a national government. Anyone, anywhere, can pay and get paid, using a computer or a bitcoin wallet Android app, and no financial institution needs to act as an intermediary in that.
All about Bitcoin
Bitcoin was originally created by Satoshi Nakamoto, who is believed to have been an MIT student. Some believe that the name, which is definitely an alias, refers not to a single individual, but rather to a group of people. Either way, Nakamoto developed a system in which bitcoins can be mined by solving complex mathematical equations. Obtaining the correct answer, which takes around 10 minutes, rewards people with 25 bitcoins. This year, this reward was halved to 12.5 bitcoins, and it will be halved again every four years thereafter. All being well, there should be around 21 million bitcoin in circulation by 2140. This is a hard limit, meaning that there will be no new bitcoins after that.
The Bitcoin Wallet Android App and Other Key Developments
To keep up with modern developments and demands of consumers, various changes have happened in the world of bitcoin. Those include:
- The creation of an Android wallet app, as it became clear that smartphones were taking over the world. There are now even a few iOS wallet apps.
- The acceptance of bitcoin in various regular businesses, including the NBA’s Sacramento Kings and various small businesses in New Orleans.
- Venture capitalists starting to pay attention to bitcoin due to the significant growth it experiences.
- Retailers noticing 5% sale increases and above within a day of accepting Bitcoin.
- Bitcoin being used in the marijuana dispensary in Canada.
- The IRS accepting bitcoin for tax payments.
- Bitcoin ATM machines developing in cities around the world.
Clearly, bitcoin is huge right now, but is it here to stay? One of the key issues with the currency is that it is incredibly volatile, far more so than other types of currencies. In 2014, when many of the above developments started happening, the value of bitcoin shot up to around $1,000. However, it quickly started dropping again and is now around $750. It fluctuates rapidly, however, which might suggest that bitcoin is nothing but a bubble that will burst sooner or later.
Others, however, believe that there is consistency in the way bitcoin is behaving as a currency. All currencies lose and gain value, sometimes very rapidly. Usually, that is linked to political events. The drop in the value of the pound as a result of Brexit is a key example of that. Because bitcoin is not linked too one country, different events will influence its value instead.