Bitcoin is explained here. Bitcoin has been around for quite a while. It started in 2009 and was a new type of money that a lot of countries just went with really quickly. There were lots of international businesses that wanted to be able to move money without the oversight of having to make sure they didn’t go over the $10,000.00 limit (which the banks would really watch). And yes, some of the people who wanted to do this have nefarious reasons for it. But, a lot of the people were big corporations who didn’t want to wait around for the time that it took banks to take care of their transactions.
For example, I once took a large amount of money from one account and put it into my personal account. I had to wait 10 days for the money to finally get into the system!! That was very annoying, and kind of nerve-wracking because I was making sure I was covering some bills coming up for new equipment. So, Bitcoin and crypto-currency was a way to fix this problem of “too much time between the cup and the lip”.
Bitcoin is cryptocurrency. It is entirely virtual. Transacted almost exclusively online, it exists only in digital form. The market determines value.
Watch this video. It came out recently and is a pretty good explanation.
Since its inception in 2009, Bitcoin has gone up a lot in price (value). But, not that many people knew about it because most of us use the good old dollar. This was something that was going on internationally and being used by large corporations, but not by us regular people.
If Bitcoin is basically virtual currency, how can it be real?
In fact, its value is very real. Recently, it went way down in value. That was market manipulation by banks. They didn’t buy in when it was low, so they are making it go down so they can buy in again. Watch it. (I wrote this page several years ago. The last time I looked this week, it is now up to $28,000 plus. So, it has gone back up again.)
So how exactly does Bitcoin work?
Thus as explained above, Bitcoin can be obtained either by
- selling goods and services,
- purchasing it via Bitcoin exchange or private seller, or
- ‘mining’ it.
Because the currency is not centralized, it relies on computers provided by Bitcoin miners to perform and validate its transactions. It is the Bitcoin miners who provide the computational machinery. They are then compensated in the actual currency, from transaction fees and newly minted Bitcoin currency.
So, what do I do with it, once I’ve got it?
Bitcoins are kept in individual online “wallets”. These wallets enable us to receive, store, and send bitcoins to other wallet owners. Each wallet has an address and its owner has a private key. The neat thing though is that while your wallet money is safe from hacking, every Bitcoin transaction is logged in a blockchain. A blockchain is a public record of every Bitcoin transaction. #coinbase
So What. So, it’s public. What does that mean?
It means, the blockchain cannot be hacked. There is no central server where all your information is stored, like Uber, or Wells Fargo, or Target. No, the transactions are so transparent (and if you want to learn more about that, look at the page on this site about Blockchain) that your money (virtual, but it still spends and goes up in value) is safer than in a bank. So, what’s not to like? Affordability. Convenience. And security. Compared to banks and credit cards, transaction fees are almost nonexistent. Buyers and sellers can conduct transactions instantly across international jurisdictions. And, there’s no risk of the funds being seized by a third party.
Who then, is using bitcoin now?
It’s actually hard to say because much of the Bitcoin community remains anonymous and widespread. The average user is 33 years old and lives in the United States according to one study. Even so, while there is a committed group of core users, Bitcoin’s popularity continues to grow. Especially among more volatile economies such as Venezuela, Nigeria, and even South Korea.
So how is it impacting the Global Economy?
You ask, is Bitcoin having a significant effect on the economy? Yes. It’s available in every part of the world. It is giving everyone the potential to buy and sell goods and services on a global scale. Bitcoin has become the de facto standard for international trade. There are many more crypto-currencies starting to be offered, but Bitcoin is the standard. This is due to the fact that Bitcoin was the first, and right now, the most stable.
Because this is not going away. People said the Internet was just a fluke and wouldn’t last. Same thing with cryptocurrency.
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