Bitcoin confuses the heck out of us. If you still do not fully get Bitcoin, you are far from alone. Nowadays, bitcoin has become the most popular topic in the world of economy, business, and everything else. With the price marching pass the $10,000 milestone for a single bitcoin, it seems like everyone wants to join the train.
The problem is, most people do not understand what is Bitcoin, and how does it work. Bitcoin is a virtual cash that is generated (mined) by computers, lives on the internet, and can be used to purchase real and digital stuff online. It came in 2009, but it didn’t really became popular up until 2013. Nowadays, Bitcoin is more valuable than some companies like McDonalds, Goldman Sachs, IBM, Nike, and Disney. Take a moment just to read that again. Bitcoin is more valuable than companies like Nike (the biggest company in sports), Disney, and IBM. With that in mind, here are some facts that will help you understand the Bitcoin phenomenon.
If you find it confusing that no one single entity controls the currency, you are not alone. Most people are confused at first. But that is the general concept of the currency. In most cases, a bank controls the currency and money. You can physically hold it. Bitcoin defies all of the general concepts. Bitcoin is controlled by everyone who uses bitcoin as the software used for the currency logs and validates who log and validates activities of the bitcoins across the globe.
Look at the dollar bill, and you see a piece of paper with a number on it. You will also see pictures stating that the bill is worth $1. The dollar bill (or any other currency like the euro, the British pound) has value only because it say it does.
Bitcoin works in the same way. The digital piece of code is only worth money because people say it is worth and want to trade the bitcoin for real goods/services. The more popular the bitcoin gets, the more value it is going to be placed on each individual bitcoin.
This is probably the most unique thing about the Bitcoin. It is completely transparent. Bitcoin shows all the transactions and amounts. You can see everything on the block chain. This complete openness instills a lot of trust and security among the community.
This is one of the things that make bitcoin popular. The currency is basically online money, online cash, money you can send anywhere in the world. If you do that through regular bank channels, you have to pay bank transfer fees, currency conversion fees, and more. And what is worse, your friend on the other side of the world will have to wait few days before the money is available. With bitcoin, there is little to no transaction fees, and the money is available almost instantly.
In the same way you log into your bank account and you check your balance, you can log into your bitcoin wallet and check your balance. The bitcoin wallet is like a physical wallet, but more secure. If you lose your bitcoin wallet, it is lost forever. However, it is impossible for people to take money from it. And if you know a bitcoin address, you can see how many bitcoins you have.
- The first bitcoin transaction was made on 12 January, 2009
- In the currency’s early years, the owner allegedly mined more than one million of bitcoins
- In 2140, the last remaining bitcoin will be mined
- James Howell is one of the tragic stories of bitcoin. He had more than 7500 bitcoins stored on his hard drive when he accidentally threw it away. The value of those coins is more than $70 million nowadays
- Vancouver is the first city in the world to boast a bitcoin cash machine
- A year after its launch, in 2010, the value of the bitcoin was 4 cents
- Lamborghini was the first car company to accept bitcoins in exchange for cars. It did so in 2013
- Mel B became the first musical artist to accept bitcoin as payment for her music
- In 20130, more than 200 businesses held a Bitcoin Black Friday sale