Dayton Kingery: Bitcoin for Beginners
Bitcoin — the virtual currency (the most commonly-known type of cryptocurrency) — has gained substantial popularity over the last few years. There are many reasons for this, one being its security. Early investor and Bitcoin promoter Roger Ver explained:
“Bitcoin is amazingly transformative because it’s the first time in the entire history of the world in which anybody can now send or receive any amount of money, with anyone else, anywhere on the planet, without having to ask permission from any bank or government.”
The way Bitcoin stays safe and private is through cryptography — a process of converting standard text into indecipherable text and back again. This essentially means that the method used for Bitcoin renders it illegible for everyone except those for whom it was created.
Another reason for its popularity is its worth. In the early days of this currency, it was incredibly cheap but now one unit goes for close to $40,000 and is valued on the stock market at almost $750 billion. It’s perhaps not surprising that today around 14 percent of Americans own some type of cryptocurrency.
Bitcoin is also popular as it is incredibly transferable. Due to its accessibility, it doesn’t take long to send to another Bitcoin user; can be used to make purchases (increasingly more companies and service providers are accepting it as a form of payment) and it has simultaneously widened the scope for international money transfer. An added benefit is that there are no exorbitant transferable fees which can often be the case with international money movement.
For those who bought Bitcoin back in early 2009, kudos to them. When Bitcoin creator Satoshi Nakamoto introduced it, the first 50 BTC went into circulation for $0.00. Even in 2011 each one was a mere dollar! As of December 1, 2021, that figure has now reached a staggering $56,805!
While Bitcoin has clear and significant benefits, the high prices are somewhat cumbersome.