In this period of Internet and “paperless” transactions, the digital currency of Bitcoin is taking over mainstream currencies. Many have heard about this virtual currency but many still do not know much about it. In a nutshell, Bitcoin is a form of digital currency which means that it does not have notes or coins as we have in real-time.
But you can use it for spending and buying things, especially online services where it is just much easier and effective to use. Currently, it is dubbed as the perfect digital replacement to cash.
Early investors of this currency are multi-millionaires already today! Interested? Learn more in this list of 10 Things You Need to Know About Bitcoins!
10- What is Bitcoin?
Bitcoin is one form of digital currency, which means that it does not come in the form of notes or coins. Plus, it is maintained and traded independently without any intervention from the government or bank. It was developed in 2009 by an anonymous programmer, Satoshi Nakamoto and, currently, being monitored by an open-source community of developers.
Basically, it is created through a computer program and deposited in virtual wallets which can, later on, be converted to cash and used for spending in real-time.
9- Anonymity of the system
One advantage which most likely lures the clients to try the Bitcoin scheme is the anonymity of the system. It means that by using Bitcoin as your “money”, you can buy your things without leaving tracks in your credit card or in the bank.
Because of this, it has been dubbed as the most ideal digital alternative to cash. Although, in reality, the system is not entirely anonymous because it is still maintained by a community of developers.
8- Bitcoin Currency
If there is an advantage to the system, there is also a disadvantage – the Bitcoin currency is highly volatile. Its value may increase or decrease at any moment, so investing on it is also still very risky. For example, in June 2012, it was only exchanged for $5 but it abruptly rose to $266 in April and down to $108 in the next few months and $140 in October.
Recently, its value went to its highest peak – more than $1,000 in December. The reason for this is because the system is still prone to Internet attackers.
7- Bitcoin Popularity
Nevertheless, the Bitcoin scheme is still becoming increasingly popular. Currently, almost 107.71 million Bitcoins have been generated by its developers, accumulating a net worth of almost $207,929 million! Everyday, almost 45,000 transactions are being operated generating almost 2.5 million Bitcoins.
Because of this, there are even rumors that the government of Canada is planning on developing its own currency to be named as MintChip.
6- Free Bitcoins
If you are a beginner and the value of Bitcoin is too much for you to bear, you can start off by investing in free Bitcoins. There are three ways to earn free Bitcoins. The first and easiest way is by visiting websites that give away Bitcoins periodically. These websites are dubbed as “faucets” because you can earn Bitcoins without doing much in return.
Second is by digital generation, which means that you rent a portion of your computer’s CPU to the CoinGeneration website. In return, they will pay you with Bitcoins although very minimal. And lastly, you can always resort to “mining” Bitcoin on numerous websites without spending cash.
5- Acquiring Bitcoins
If you have money or service to spare, acquiring Bitcoins is very easy. The most popular way is by “mining” Bitcoins. How is it done? You can either exchange it with currency, mainly US Dollars or Euros, via Bitcoin providers like the Japan-based Mt.Gox or you can provide services in exchange for Bitcoin payments.
Basically, in minting Bitcoins, you will need to find a new block in the chain of the Bitcoin network through a software (which you will install) known as the Bitcoin Miner. Finding a new block requires long and difficult calculations but you will be awarded 50 Bitcoins in return.
4- The Bitcoin System
In a nutshell, the Bitcoin system allows its clients to make anonymous money transactions – including exchange and spending. Because every member will only be using a Bitcoin address, people can transact without knowing who sent it or received it.
Also, this system was created to be a peer-to-peer network, which means that it is controlled by an open-source community of developers and contributors rather than a central authority, like the government or a bank.
3- How to spend bitcoins
Now that you know the basics of acquiring it, it is time to know how to spend your digital money. When it comes to spending Bitcoins, it is relatively easy if you are techy savvy because most online services accept Bitcoins.
These include WordPress, the online dating service OkCupid, the social network Reddit, fashion websites, and non-profit organizations that accept international donations. However, many major retailers in the real world still do not accept Bitcoins as payment.
2- Bitcoin Millionaire
With the increasing popularity of Bitcoins today, it is not surprising that the early investors of the scheme are now enjoying their millions worth of investment. These people bought Bitcoins for a mere couple of bucks before and are exchanging them for thousands of dollars today.
The wealthiest Bitcoin Millionaire today has 111,111 Bitcoins at hand, which have a worth of almost $85,442,223.35! However, because of the high volatile nature of the system, this enormous wealth can also turn to zero at any moment.
1- Satoshi Nakamoto
So who is the man behind this genius system? The truth is, no one knows. The only name that comes up as the brain behind the Bitcoin system is an alias of Satoshi Nakamoto, who is either a single individual or a group of developers.
It is believed that he is from Japan, although his mail ID traces way back to Germany. When the Bitcoin was developed in 2009, Satoshi disappeared a year after. Even other developers of the system have no idea where he is!