So much of what we are hearing at this point in the news that reports on it is the absolutely amazing price of over $3,800 USD that a single Bitcoin is worth today. This is crazy if you have been following bitcoin for as long as I have been.
I have seen this cryptocurrency go to the moon and back down to earth and now in those terms it has accelerated all the way to pluto. So what’s the deal how long will it last? That’s anybody’s best guess. The truth is that nobody knows, it could keep going or it could crash back down to earth tomorrow. This is the nature of the beast and beast is what Bitcoin has become.
The easiest way to start using and trading Bitcoin is to download the official wallet and you will want to start by encrypting your wallet, make sure you choose a secure passphrase and be careful where you store the passphrase, because you don’t want to lose track of this or have anybody else steal it from you. When you first install the Bitcoin-qt application, it will take a good while to “sync” to the network. Keep in mind that this “syncing” is you download the whole digital ledger onto your computer, this is how it works. You will have a digital list of every single transaction that has ever occurred, neat hey?
Now you will have a Bitcoin wallet address and you can purchase Bitcoin from just about any currency and then send it to your wallet address. You can then buy products, make payments and receive them as well. That said, if you want to trade bitcoin, this is the best deal I have found.
Did Satoshi Nakamoto created Bitcoin? Who is this person, nobody knows and nobody has taken credit, however there are rumors that whoever this person is, that they created this awesome feat. Hackers all around the world have tried to break the code and even the brightest hackers and coders have not been able to find a means to do it, some would say that every hole imaginable has been patched almost at like a superhuman manner.
There are rumors out there that satoshi nakamoto is an alias for some type of artificial intelligence that is responsible for creating Bitcoin. The truth is we don’t know for sure but the fact that nobody is able to hack Bitcoin and that it is coded so beautifully, that is every hole in it’s security is plugged seemingly before it can be exploited, hints at some sort of intelligent design or some type of AI that has not been pointed to yet. We really don’t know but some of the best minds in technology are unable to hack Bitcoin and it leads some to say this could be a possibility.
Bitcoin is so much more than just a currency, it’s really a new way of living and one that knows no bounds with respect to the ginormous banks that have for so long dominated what we refer to as the monetary system. Bitcoin is not anything like a dollar and this is what makes its power so huge.
We are no longer bound by their rules, we have an opportunity for real change, for the ability to prosper without control, to make the decisions without someone approving them. This is the blockchains job. We can think of Bitcoin as a giant ledger whereas monetary responsibility is transferred to the owner and the peers that operate the network. Cool right?
This is not your traditional currency and that is what makes it so delicious. We are living in the age of where we are going to witness the transfer of wealth like nobody has seen before. It’s crazy and I love it.
Nobody is going to watch your cookie jar like the banks have been in control of for so long those days are literally numbered with the advent of this technology. Remember napster? This is the napster of currency where it’s peer-to-peer formula and the trust those that use it gives it its value.
So if you are ready to jump into this world there are options for you. You can do so many different things and it’s not just Bitcoin, there are literally tons of options for you, you could trade Litecoin instead which has also been on the upslope with value against the US dollar.
What gives Bitcoin it’s value? Everyone who uses it, and trusts in it, not much of a difference with it and paper money issued by the United States treasury for example. What gives paper currency it’s value? Paper currency used to be based on and backed by gold, however this is no longer the case. There is also the derived scarcity of Bitcoin as it has a cap and will never exceed 21 000 000 Bitcoins. This of course could be subject to change, but as far as the right now it will never exceed the 21 million coins and that could create a scarcity of this unique digital currency in the far future.
Because the of the nature of SHA-256 encryption on which Bitcoin is based, it is inconceivable as of now to have the ability to break this encryption, but the advent of quantum computer of possibility of such computational behemoths may be able to break this encryption in the not-so-distant future, this could present a problem, however it may make Bitcoin “fork” and utilize a more secure encryption, or even image the possibilities of using the power of quantum mechanics for making possible unbreakable encryption in the future. This will likely be the topic for another post so this is all I will discuss it for now.
There are issues with Bitcoin and there are many ways that Bitcoin being only as secure as the computer and user that is using it. Some exchanges utilize “cold storage” wallets where they store the Bitcoin, making it unreachable to potential hackers and if you lose your password for your wallet, you actually may be up the digital creek without a paddle so to speak. So you must be very careful and it is advised that if you have a Bitcoin instance running, that you backup your data often and make sure you never lose the password you have encrypted your wallet with.
People have lost a lot of digital currency by their hard drives failing or losing the passwords. The has also been much scamming going on with Bitcoin and you have to be careful what online exchanges you are using, because if they are hacked and the Bitcoins stolen, most will not honor stolen Bitcoin, which means that you are out of luck. Mt. Gox is an example of one hacked platform where countless users lost money. Cryptsy is another platform that screwed me out of some currencies, and there’s no way for me to recover, so make sure that you use a reputable exchange or you may be sorry.
Bitcoin is much more than a currency and another not so well known fact is that even messages can be hardcoded into transactions and through chains of messages you could even put files. Wikileaks even has used Bitcoin to attach all of the cablegate leaks into the blockchain which is super interesting. In fact, some of the first transactions that were done in Bitcoin were the hardcoded cablegate Wikileaks documents, which raises questions as to who may have played a role in the development of Bitcoin.
Was Julian Assange the creator of this digital currency? Nobody knows for certain, but this points to how Bitcoin could ultimately be a great tool to stop censorship in its tracks, which is a great thing. Once hardcoded into the Bitcoin Ledger, it will always be there unless the encryption is somehow broken, super cool, right?