bitcoin

What Is Bitcoin?

Bitcoin is a cryptocurrency. It is a decentralized digital currency without a central bank or single administrator that can be sent from user to user on the peer-to-peer bitcoin network without the need for intermediaries.

Bitcoin is the chief of all cryptocurrencies. It was created by an anonymous individual or group of persons in January 2009 that goes by the alias Satoshi Nakamoto.

Bitcoin is open-source; its design is public, nobody owns or controls Bitcoin and anyone can take part.

Bitcoin is a reaction to the monopoly of the centralized banking system that many of us are accustomed to using. Banks hold our money. They charge us fees for using our money. Bounce a check? You have assessed a fee. Use your ATM card to withdraw your money, you are assessed a fee. Wire money domestically or internationally, you have assessed a fee. Plus, banks use your money to make money for themselves.

Banks require personal information about you before you are granted an account. Many banks even require you to layout an initial deposit to get an account and many require that you maintain a certain balance else they will assess a fee. So, are banks really our friends, many ask?

Banks are third-parties between you, another person you want to send or receive money from, and vendors through which you purchase products and services.

Bitcoin transactions on the Bitcoin blockchain eliminate the third-party. All transactions are peer-to-peer and anonymous. I can send a person large amounts of Bitcoin or purchase items from vendors that accept Bitcoin and no name or other personal information about me and the other entity is needed. To send someone Bitcoin or to purchase goods and services with it, all I need is the Bitcoin receive or deposit address of that person or business entity.

Below is what a typical Bitcoin receive/deposit address looks like. (This is one of my Bitcoin wallet addresses). Anyone can use this address to send me Bitcoin from their Bitcoin wallet. Learn about wallets here.

bc1qkz87mhffsr8a543l4g0y4y7eptea55wzu4kx28

Bitcoin transactions are also faster and cheaper than traditional banking transactions.

Persons all over the world can participate. Even persons who never had a bank account before. All they need is Internet access, a mobile device, and a Bitcoin wallet – which are free.

The Problem

The problem, however, is that Bitcoin does not have worldwide adoption, yet. What stands in the way is that many people know little to nothing about cryptocurrency and do not trust it. They are accustomed to traditional banking.

A much bigger problem is the banks themselves. Banking is a very powerful industry and empire that has tentacles all over the world.  Banks are not going to keel over because of Bitcoin. Bitcoin presents itself as a threat to them. If the banking system is able to regulate and control Bitcoin, then that would be an entirely different matter. They try, but cannot. Why?

Because the power of Bitcoin comes from the people. People determine its value. The more people that use it, the more valuable it becomes.

In my view, it is only a matter of time where the world will transition from paper money (fiat) and plastic cards to “digital” currency. That time is far into the future.

How Much Bitcoin Is There?

In all their infinite wisdom, Bitcoin’s anonymous inventor Satoshi Nakamoto decided that only 21 million Bitcoin (BTC) would ever exist. They wanted new coins to be released gradually into the market — but at the same time, it was crucial for a generous supply of Bitcoin to start circulating sooner rather than later.

RJ

A retired Information Technology Specialist and Foreign Service Officer with a large U.S. Government Federal Agency, Technical Instructor, Blogger, WordPress Instructor, Web Designer, Internet Marketer, and Cryptocurrency Investor and Mentor.

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