What is Bitcoin?
If you haven’t heard of Bitcoin, cryptocurrencies or block chain by now you’re probably part of a dying breed. Day by day it seems like media coverage of bitcoin only continues to grow.
The attention of the entire country, and even the world seems to be fixated on Bitcoin. But what exactly is it?
To answer that question lets first start with the underlying technology, block chain. Block chain is a new technology that revolutionizes the way we deal with stored information and data. Traditionally data is stored and transmitted via a server and agent model wherein there is one large database that many users connect to.
Block chain on the other hand stores that same information but across a network of devices, all of which are equally credible in credibility. As such it allows for a decentralized database that is accessible and editable by everyone while virtually eliminating the possibility of any one party maliciously corrupting or manipulating historical data.
That in and of itself may not sound amazing to those aren’t privy to the implications of this technology but it is indeed a big deal.
Using block chain, coders can create a digital currency that is kept secure through the use of cryptography which is where the term “cryptocurrency” comes from. These cryptocurrencies are mined using computers to solve complex mathematical problems which when solved will award a coin.
Of the thousands of cryptocurrencies that now exist in the world, Bitcoin was the first and is by far the most popular.
It is the one making news headlines touting the fact that it’s market cap and valuation are constantly reaching record highs. Bill Gates and Warren Buffets’ combined wealth would not be enough to buy all of the Bitcoin that exist in the world today. What started at just under $1,000 at the beginning of the year is now worth well over $17,000 as of the writing of this post.
But why has this new digital currency become so valuable so quickly?
Many are viewing it as an alternative to gold where it can now be a new asset class to be used as a store of value. Furthermore, a world where cryptocurrencies become the common means of commerce offers several benefits to the system we currently use today.
For example, everyone would have easy access to a bank account. As it currently stands today, many people are denied access to credit, bank accounts or really any financial products for that matter simply because, for whatever reason, their profiles have been deemed “un-bankable”.
With cryptocurrencies, anyone who has a smart phone can now use it as their bank. It’s taking this normally centralized control and power of finances away from institutions and spreading it back to the common people. This type of disruption is what has gotten people so excited. Even more so, the further implications of block chain are that in the future we may even be able to use a completely decentralized internet.
Now that’s all fine and dandy, but it’s all just speculation at this point. Many of the proposed use cases for these cryptocurrencies, minus a few exception, have yet to come to fruition.