Have you ever heard of Bitcoins? If not, then I urge you to read the following in an exaggerated commercial voice as I walk you through it. Are you tired of keeping change in your pockets just to end up losing them? Are you tired of pickpockets and stolen wallets? Have you ever envied the people in Sims? Well, let me introduce you to your quick fix: bitcoins, the worldwide and notable to many, digital currency.
In 2009, an unknown programmer who goes by the alias Satoshi Nakamoto, invented a system that promised lower transactional fees than traditional online payment mechanisms, controlled not by a central authority—such as a government or a bank—but by a decentralized authority made up entirely of a group independent individuals and companies called ‘miners’ that help enforce the reliability of the network. What’s interesting about mining is the process of it. To put it in the most simplified way, you solve a difficult computed puzzle to discover a block, which is later on added to something called a ‘blockchain’ and as a reward you get bitcoins. In 2009, the reward for a single block was 50 bitcoins. Nonetheless, every four years that number lowers. Not only that, but the more bitcoins are created, the harder the puzzles get and the more computer power is required to even mine them. For examples, just in 2009 the mining difficulty was slightly above 1.15, now it’s over 4.24 billion.
So how much is one bitcoin worth? Well, its price is solely dependent on how big the network is. Considering the bigger the network is, the harder the mining process becomes, and we all know that things that come the hard way always cost a lot more. As of April 2017, one bitcoin is worth $1,223.
Bitcoins, like any other currency, is a form of payment. You sell something or provide a service in exchange for some of them. Many people think that it’s the future, they believe and invest in it with all they’ve got. It’s gotten so popular that there are casinos out there where you can gamble with bitcoins instead of whatever money you have.
Now, is there a risk in investing in them? Absolutely. After all, bitcoins are the government’s currency’s nemesis. And like all things hated by the government, the black market has taken a liking towards it—money laundering, illegal activities, tax evasion, etc.—as a result the government could easily ban, restrict or regulate it (and some already have). Not to mention the security risk, I mean, have you ever heard of anything digital that didn’t get screwed over with malware, glitches and hackers? And if that happens, with bitcoins’ distaste towards centralized authority, there’s nothing backing it up with insurance.
All in all, no one has the simplest idea who Satoshi really is, other than the obvious; just a rich genius who came up with a system that went viral. For all we know, he could be the real-life Tony Stark. But regardless of who the creator really is, what do you think of this currency? Is it the future or the end of it?