There are various opinions about bitcoin and all cryptocurrencies. There are some who say using cryptocurrencies is the way of the future and if you want to be a part of future trading you have to accept it. As many experts will tell you it is very dangerous and should be avoided at all costs. In order to form any opinion, it is important to do your homework and thoroughly understand how the bitcoin system works.
In November 2008, a theoretical idea was published which introduced the cryptocurrency idea in the form of a whitepaper titled “Bitcoin: A Peer-to-Peer Electronic Cash System” under the pseudonym Satoshi Nakamoto. This paper suggests a decentralized form of currency, complete anonymity and limited supply.
Bitcoins work similarly to a bank in that when you have money in the bank they don’t actually keep the specific cash you give them and give it back when you take the cash out of the machine. Checks represent money but not the actual currency they represent. The biggest difference is the regulation. Instead of a bank, there is a network and each user has an encrypted address.
Within six months of the release of this paper, the theory was realized by the person or persons using his name Nakamoto and Bitcoin launched. Early adopters are people who believe in finding a way around bank fees and government regulations and want an open source type economy.
Soon enough, many startups followed suit with their own versions. It takes time for this type of currency to be used to buy anything. The first time Bitcoin was used for purchases was in 2010. Two Bitcoin users exchanged pizzas for the currency.
Then in 2010, some big businesses started accepting this form of payment. It was a huge advance for cryptocurrencies and it was really the start of the acceptance of bitcoin as a proper currency. WordPress, Microsoft, and Expedia were among the first major companies willing to see this as a usable currency. In February 2011 the value of bitcoin hit one dollar and the media was forced to take notice.
Bitcoin users experienced a tremendous surge in value in 2013. It reached $200. Despite the crashes and fluctuations, Bitcoin then has a value of over $1000. Several universities have added Bitcoin to their finance and economics curricula and have even started accepting it as payment for tuition. That value couldn’t be sustained and then in 2015, it dropped in value so significantly that bitcoin became the worst performing currency of the year.
It seems that digital cryptocurrencies are gaining economic strength and power. Its appeal is expanding, its use is growing and investment opportunities are getting stronger. Considering that the entire Forex market is based on theoretical currencies, it’s not too far-fetched to believe that currencies existing only in theoretical form will be the way of the future.
Bitcoins are secured by encryption, and exist because there is a network of users processing and verifying transactions. The network is growing at an alarming rate and gaining tremendous strength in the international market
