Bitcoin: How do you know about this digital currency?

Bitcoin: How do you know about this digital currency?

There is no doubt that Bitcoin is not only one of the HOT keywords to search on Google recent year but also one of the HOT topics in daily conversation with our friends. One day, my friend recommends me to buy Bitcoin; honestly, I feel funny to invest in a digital currency that I have no idea where It comes from and how its value is. Therefore, I do not research about this topic until last year when the Bitcoin value reaches $17000. This topic becomes the HOT news that I want to spend the time to research more about this “magical currency”. Let’s take an overview of Bitcoin

What is Bitcoin?
Bitcoin – A Peer-to-Peer Electronic Cash System’ is a consensus network that enables a new payment system and a completely digital money. Bitcoin is the first implementation of a concept called “crypto-currency”, which was first described in 1998 by Wei Dai on the cypherpunks mailing list, suggesting the idea of a new form of money that uses cryptography to control its creation and transactions, rather than a central authority. It is the first decentralized peer-to-peer payment network that is powered by its users with no central authority or middlemen. From a user perspective, Bitcoin is pretty much like cash for the Internet.

Who is the creator of Bitcoin? Who is the real Satoshi Nakamoto?
The identity of Satoshi Nakamoto, the computer programmer who created the virtual currency bitcoin, is one of the most controversial stories in technology. In 2008, Nakamoto launched bitcoin with a white paper; in 2011, he disappeared just as the project was hitting its stride, his frequent forum posts and e-mails tapering off to silence. (In his last known correspondence, he told a bitcoin developer that he had “moved on to other things.”) The mystery will take us from the Land of the Rising Sun all the way across the world to a small Californian town named Temple City and then back across the Pacific Ocean to an Australian doctor.

However, when the world’s media thought they had found their Satoshi Nakamoto in 2014 – he was a computer engineer living in Temple City in Los Angeles County, the Japanese-American man, named Dorian Satoshi Nakamoto denied he is Satoshi Nakamoto. Another best known Nakamoto-suspect is Australian computer scientist and businessman Craig Wright.

Nevertheless, The Economist states that “such demonstrations can be stage-managed” and reported Wright refused to make the proof public and to provide other assurances. Until now, “There is currently no publicly available cryptographic proof that anyone, in particular, is Bitcoin’s creator.”

How to mine Bitcoin? How to get Bitcoins?
Bitcoins act like cash, but they are mined like gold. So how does someone get into the current bitcoin rush?
If properly done and willing to take the investment risk, you could wind up with a few bitcoins of your own—which currently have an average weekly price of $945 on the largest bitcoin exchange. When the algorithm was created under the pseudonym Satoshi Nakamoto—which in Japanese is as common a name as Steve Smith—the individual(s) set a finite limit on the number of bitcoins that will ever exist: 21 million.

Currently, more than 12 million are in circulation. That means that a little less than 9 million bitcoins are waiting to be discovered. That’s the way the system was set up—easy to mine in the beginning, and harder as we approach that 21 millionth bitcoin. At the current rate of creation, the final bitcoin will be mined in the year 2140.

There are three primary ways to obtain bitcoins: buying on an exchange, accepting them for goods and services, and mining new ones. “Mining” is lingo for the discovery of new bitcoins—just like finding gold. In reality, it’s simply the verification of bitcoin transactions. Bitcoin mining can be done by a computer novice—requiring basic software and specialized hardware.

Is Bitcoin legal?
Bitcoin has not been made illegal by legislation in most jurisdictions. However, some jurisdictions (such as Argentina and Russia) severely restrict or ban foreign currencies. Other jurisdictions (such as Thailand) may limit the licensing of certain entities such as Bitcoin exchanges.

Regulators from various jurisdictions are taking steps to provide individuals and businesses with rules on how to integrate this new technology with the formal, regulated financial system. For example, the Financial Crimes Enforcement Network (FinCEN), a bureau in the United States Treasury Department, issued non-binding guidance on how it characterizes certain activities involving virtual currencies.

Do you think bitcoins are approaching being unethical monetary?

It is worth pointing out that bitcoin is a digital currency that there is no regulation. Unlike U.S dollar or other official currency are issued by the central authority that the value of current is protected from government regulation, there is no central authority to control the transactions of bitcoin. Therefore. it allows freeing movement of the value of the online market. Moreover, the price of bitcoin is not stable that its value increased about $6000 early in 2017 to nearly $18000 end of 2017. The more the value bitcoin increases, the more the bubble happens in advance that leads to some financial crisis like 2008 financial crisis.

What counts is that it becomes the new payment system recent years. It will adversely affect not only on the sustainable growth of economic market but also on the people who invest in this digital currency. Additionally, since no central bank protects the bitcoins, it is easy for the hacker to steal people’s bitcoin. Additionally, Bitcoin does not seem to be an official payment on most of the business because it is new and no one guarantees for the value.

In fact, bitcoins do not have any real value as silver or gold that its value replies on demand and supply economics. Therefore, some experts mention that bitcoins are linked to Ponzi Scheme that an investment is a fraud when it pays investors with money collected from new investors. As a result, when no new investors, bitcoins will be collapsed. There are some countries they ban to use this digital currency such as Russia. If one day Bitcoin becomes the illegal currency, you will lose your money

Since there is no one control the Bitcoin, it is easy for people to use Bitcoin for illegal activities. It is worth pointing out that the less regulation Bitcoin get the easier people take an advantage to make private and irreversible payments. Depend on how the people use Bitcoin for an illegal purpose, it will make the bitcoins unethical.

I highly recommend you to read this book: Digital Gold by Nathaniel Popper – New York Time Book Review Editor’s Choice if you want to research more about this digital currency or plan to invest in Bitcoin. This book will give you the landmark digital money and financial technology that has spawned a global social movement.

Author

Amy Nguyen

Amy Nguyen

I feel happy to share my experiences with you about Travel - Food - Life around the world. I hope to inspire you to Live-Love- Laugh :)

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