Let’s try to explain Bitcoin. Did you know that there is an uprising form of currency that has been transforming the way we spend money on the internet?
Bitcoin has taken the world by storm and many are forecasting that it soon can become the most preferred currency for online transactions.
This article was originally published on Digital Mom Blog in 2014 after doing a deep dive into the topic after attending CES. Fast forward to 2022, my how times have changed!
What is Bitcoin?
We are diving in and explaining this new world of digital currency. As the world changes, so does our money. Is this the new revolution of currency? Let’s dive in and find out.
Bitcoin, though still in the experimental stages, is an open-source decentralized currency that is mainly used peer to peer. Soon Bitcoin will take the place of paper cash as it offers a variety of wider benefits.
But why choose to use Bitcoin? There are a variety of features that Bitcoin offers, some of which we will explore today.
Here are a few of the differences between Bitcoin and our normal currency; draw your own analysis.
The thing that basically sets Bitcoin apart from our traditional currency is the fact that it is completely decentralized. It is 100% virtually handled. The actual coins in this world are virtual cryptographic pieces.
They may be stored in digital wallets that can only be accessed with passwords. All transactions would be processed via the internet through Bitcoin miners (a distribution network) by a distributed network of servers.
No Intrinsic Value
All traditional currencies carry a certain level of intrinsic value behind them. One Bitcoin is equivalent to approximately $100 US.
While trying to explain this in the simplest way possible, the main benefit of this digital currency is that only a selected few of the new Bitcoins made will be minted annually though it is foreseen to generate as many coins as possible.
Their goal is to have over 21 million Bitcoins circulating worldwide to 21 million.
Confused? Check out this video that explains what is Bitcoin.
Mining for Bitcoin
If your mind if blown by the fact that Bitcoin mining is like a modern day gold search but using a computer – you are not alone.
Here’s a little download on what exactly Bitcoin mining is.
Bitcoin mining is the process by which new bitcoins are entered into circulation. It is also the way the network confirms new transactions and is a critical component of the blockchain ledger’s maintenance and development.
“Mining” is performed using sophisticated hardware that solves an extremely complex computational math problem. The first computer to find the solution to the problem receives the next block of bitcoins and the process begins again.https://www.investopedia.com/tech/how-does-bitcoin-mining-work/
While at CES, there were several companies selling Bitcoin miners (computers that mine Bitcoin). This whole thing fascinates me and hoping the husband will take this kind of mining rather than Minecraft in 2014. 🙂
Here is another great article explaining the process of mining for Bitcoin. In 2022, this isn’t the only crypto people are mining for.
New Bitcoins are created by users running the Bitcoin client on their computers. The client “mines” Bitcoins by running a program that solves a difficult mathematical problem in a file called a “block” received by all users on the Bitcoin network.
The difficulty of the problem is adjusted so that, no matter how many people are mining Bitcoins, the problem is solved, on average, six times an hour. When a user solves the problem in a block, that user receives a certain number of Bitcoins.
The elaborate procedure for mining Bitcoins ensures that their supply is restricted and grows at a steadily decreasing rate.
About every four years, the number of Bitcoins in a block, which began at 50, is halved, and the number of maximum allowable Bitcoins is slightly less than 21 million. As of 2021 there were more than 18.6 million Bitcoins, and it is estimated that the maximum number will be reached around 2140.Brittanica
This was originally written in 2014. If I knew now in 2022 what would happen with this digital currency, well – chances are I’d be retired right now. Listen and learn people. This is Bitcoin mining in action.
Check out this Bitcoin ATM at CES 2014.
Buying Bitcoin 2014 vs 2022
While the digital bitcoin currency fluctuates drastically, here is a little fodder in regards to if we had invested in Bitcoin in 2014 vs investing today.
At the end of 2014, one Bitcoin was about $318. Fast forward to 2022, while drastically reduced from an all-time high. Today’s bitcoin value is approximately $19,720.10. That’s right, for one bitcoin.
All Time High Bitcoin Value
Wondering what the all-time high for Bitcoin was? In November 2021, Bitcoin surged to over $68,000, after starting the year at just under $30,000. The current 2022 value of Bitcoin is 72.22% below the all time high of $68,789.63.
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The Bitcoin value continues to be volatile. While peaking in 2021, it continues to daily be a high-low ride in the markets.
Here are frequently asked questions about Bitcoin.
How much is 16 Bitcoin worth?
At today’s value (October 14, 2022) The worth of 16 bitcoin is approximately $314,064.00.
Who created Bitcoin?
The true creator of Bitcoin has never officially been released. You may often here that Satoshi Nakamota is the creator of Bitcoin.
The name Satoshi Nakamotois a pseudonym for the person or people who helped develop the first bitcoin software and introduced the concept of cryptocurrency to the world in a 2008 paper.
How do you lose Bitcoin?
Keep track of your Bitcoin data, just as you would your bank data. Bitcoin can be lost in a number of ways. Sadly, some people pass without sharing access to their Bitcoin. This accounts for a large amount of out-of-circulation coins.
Another issue is lost keys. Crypto keys are like your bank account pin with no forget password functionality.
How many Bitcoin can be produced?
Only 21 million Bitcoin can ever be produced. It’s built into the coin’s code. Currently, 18.8 million have been mined.
Bitcoin mining works in that every four years, the amount that can be mined is halved. With this equation, 90% of the total possible coins have been in circulation leaving 2.2 million bitcoins left to be claimed.
Who owns the most Bitcoin?
By design, the blockchain that Bitcoin is developed on is meant to transparent but not linked to particular individuals. That said, it is suspected that Satoshi Nakamoto, the creator of Bitcoin owns the most, estimated at one million coins.
It is known as far as private companies, the leading owner of Bitcoin is Block one. It is estimated that Block One own’s 140,000 Bitcoin.
How can I track Bitcoin’s valuation?
Just as you track stocks, Bitcoin’s valuation can be found with BTC.
How much Bitcoin can I mine in a day?
Thinking you want to go into Bitcoin mining? Make sure you understand the costs before you start digging for that BTC gold.
It takes ten minutes to mine a new Bitcoin block. That means 144 blocks can be mined each day. The Bitcoin reward for one block is currently 6.25 Bitcoins – therefore, around 900 will be mined a day.
However, don’t get carried away about how much you could personally mine. Remember each block is being competed for by thousands of other miners. And not just individuals, powerful collaborations, or “mining pools”, where computing power is combined and the subsequent rewards shared. (source: howlanderandco.com)
What We’ve Learned About Bitcoin Since 2014
Welcome to 2022. While when we originally wrote this article in 2014, the only real digital currency being discussed was Bitcoin. Fast forward to today where we have numerous digital currency options.
Here are a few things that we have learned about the cryptocurrency since it’s introduction to the world.
- While Bitcoin still remains a popular investment, the popularity as a mainstream replacement for the US dollar is not there.
- Invest early.
- Bitcoin is legal tender is El Salvador. Each citizen who opened a digital wallet received $30.
- The last Bitcoin will be mined in 2140.
- There are almost 100,000 Bitcoin millionaires and 12 cryptocurrency billionaires.
- It is estimated that there are 900 new Bitcoins created each day.
Tell me I’m not the only one who jumped on the Dogecoin, sold too quick before it had it’s hay day!
The moral of the story when it comes to cryptocurrency, Bitcoin and money… you win some and you lose some. You just never know what is going to hit, but also what could bankrupt you. Invest wisely.