𝙒𝙝𝙖𝙩 𝙞𝙨 𝘽𝙞𝙩𝙘𝙤𝙞𝙣?

 

Bitcoin is a new currency that was created in 2009 by an unknown person using the alias Satoshi Nakamoto. Transactions are made with no middle men – meaning, no banks! Bitcoin can be used to book hotels on Expedia, shop for furniture on Overstock and buy Xbox games. But much of the hype is about getting rich by trading it. The price of bitcoin skyrocketed into the thousands in 2017.

 

Why bitcoin?

 

Bitcoins can be used to buy merchandise anonymously. In addition, international payments are easy and cheap because bitcoins are not tied to any country or subject to regulation. Small businesses may like them because there are no credit card fees. Some people just buy bitcoins as an investment, hoping that they’ll go up in value.

 

Buying bitcoins

 

Buy on an ExchangeMany marketplaces called “bitcoin exchanges” allow people to buy or sell bitcoins using different currencies. Coinbase is a leading exchange, along with Bitstamp and Bitfinex. But security can be a concern: bitcoins worth tens of millions of dollars were stolen from Bitfinex when it was hacked in 2016.

𝙏𝙧𝙖𝙣𝙨𝙛𝙚𝙧𝙨

People can send bitcoins to each other using mobile apps or their computers. It’s similar to sending cash digitally. 

𝙈𝙞𝙣𝙞𝙣𝙜

People compete to “mine” bitcoins using computers to solve complex math puzzles. This is how bitcoins are created. Currently, a winner is rewarded with 12.5 bitcoins roughly every 10 minutes. 

 

Bitcoin wallet

Bitcoins are stored in a “digital wallet,” which exists either in the cloud or on a user’s computer. The wallet is a kind of virtual bank account that allows users to send or receive bitcoins, pay for goods or save their money. Unlike bank accounts, bitcoin wallets are not insured by the FDIC.

 

𝙒𝙖𝙡𝙡𝙚𝙩 𝙞𝙣 𝙘𝙡𝙤𝙪𝙙: 𝙎𝙚𝙧𝙫𝙚𝙧𝙨 𝙝𝙖𝙫𝙚 𝙗𝙚𝙚𝙣 𝙝𝙖𝙘𝙠𝙚𝙙. 𝘾𝙤𝙢𝙥𝙖𝙣𝙞𝙚𝙨 𝙝𝙖𝙫𝙚 𝙛𝙡𝙚𝙙 𝙬𝙞𝙩𝙝 𝙘𝙡𝙞𝙚𝙣𝙩𝙨’ 𝙗𝙞𝙩𝙘𝙤𝙞𝙣𝙨.                                                                                          𝙒𝙖𝙡𝙡𝙚𝙩 𝙤𝙣 𝙘𝙤𝙢𝙥𝙪𝙩𝙚𝙧: 𝙔𝙤𝙪 𝙘𝙖𝙣 𝙖𝙘𝙘𝙞𝙙𝙚𝙣𝙩𝙖𝙡𝙡𝙮 𝙙𝙚𝙡𝙚𝙩𝙚 𝙩𝙝𝙚𝙢. 𝙑𝙞𝙧𝙪𝙨𝙚𝙨 𝙘𝙤𝙪𝙡𝙙 𝙙𝙚𝙨𝙩𝙧𝙤𝙮 𝙩𝙝𝙚𝙢.

 

The anonymity of bitcoin

 Though each bitcoin transaction is recorded in a public log, names of buyers and sellers are never revealed – only their wallet IDs. While that keeps bitcoin users’ transactions private, it also lets them buy or sell anything without easily tracing it back to them. That’s why it has become the currency of choice for people online buying drugs or other illicit activities. 

 

Bitcoin’s future in question

 No one knows what will become of bitcoin. It is mostly unregulated, but some countries like Japan, China and Australia have begun weighing regulations. Governments are concerned about taxation and their lack of control over the currency.