There are few technologies today that can spark heated debate on the Internet and confuse the vast majority of the population in the way that the virtual digital currency Bitcoin can.
While it has been a constant source of interest and confusion since it propelled itself to the forefront, Bitcoin’s utility is now greater than ever, with its value rising above $60,000.
The number of $60,000 is considered a new record reached by the digital currency, and the number of people who invested in it from the beginning and earned huge amounts of money early became millionaires.
The biggest question is why this interest, and does Bitcoin constitutes the future of the currency as we know it today, whether it is a currency that has value, where is it being used, and whether it is necessary to buy pieces of Bitcoin, as we attempt in the following report to answer these questions briefly.
What is Bitcoin?
Bitcoin (BTC) is a cryptocurrency that was developed on 9 January 2009. This currency uses a technology called “secure decentralized payments,” which is a technology that stores money so that it does not require banks or people’s names.
It was advertised via an email circular as a way to free up money in a way similar to how the Internet makes information free.
Bitcoin can be compared to other currencies such as the dollar or the euro, but with several basic differences, the most prominent of which is that this currency is a completely electronic currency that is traded only over the Internet without an actual physical presence.
It also differs from traditional currencies in that there is no central regulatory body behind it by relying on secure decentralized payments technology, but it can be used like any other currency for online purchases or indeed converted to traditional currencies.
How it works?
Bitcoin works through the so-called blockchain, where a person or people hidden behind the nom de guerre Satoshi Nakamoto 2008 put forward the concept of Bitcoin and the blockchain, then in 2009 Satoshi wrote a basic part of the code for the digital currency. Which acts as a general ledger for all monetary transactions.
The use of the blockchain within the design of the Bitcoin currency system helped make it the first digital cash currency to avoid the problem of double spending, that is, spending the same amount of cash on two different transactions.
There are limits to the number of Bitcoins that can be created in the system so that the currency maintains its value, and the maximum amount that can be created is considered to be just under 21 million Bitcoins.
There are currently about 19 million bitcoins in circulation, and each bitcoin is worth about $39,000 at the moment.
What is blockchain?
A blockchain is a distributed database that manages an ever-growing list of records called blocks, where each block contains a timestamp and a link to the previous block.
The blockchain was designed so that it can preserve the data stored within it and prevent it from being modified. That is when some information is stored in the blockchain, it is not possible to modify that information later.
The blockchain database is managed independently due to its reliance on a peer-to-peer network and timestamp servers distributed around the world.
The blockchain is also considered secure by design and is used to record events, addresses, medical records, and other records of activity management, identity management, transaction processing, and verifying their source.
It greatly affects the global economic system, including eliminating intermediaries and completing commercial transactions without an intermediary, such as banks, for example, which also affects the course of global trade.
The blockchain contains a decentralized record of all transactions that are updated by all users of the network, and users must create blocks on the network to create Bitcoin.
Each block is created cryptographically by harnessing the power of users’ computers and then added to the blockchain, allowing users to earn money by keeping the network running.
What affects the price of Bitcoin?
The price of Bitcoin has been jumping up and down since traders took notice of it in 2013. The rise and fall in the value of the currency are largely related to the relationship of regulators to it, and initial coin offerings, while the currency is considered a way for projects to raise money by selling crypto tokens similar to Bitcoin.
Many analysts believe that we are in the middle of a new Bitcoin bubble, while advocates say that the significant rise in the price of the currency that is happening now is only the beginning of seeing the rise of Bitcoin.
Who is Satoshi Nakamoto?
The owner of the mysterious code name Satoshi Nakamoto is considered to be the one who created the initial idea for Bitcoin and the blockchain, by publishing the idea through a research paper in 2008 and describing the idea as an electronic cash system that relies on financial transactions on the principle of peer-to-peer, which is a technical term that means Direct dealing between user to user or peer to peer (P2P) without the presence of an intermediary.
Those in charge of the currency say that the goal of this currency, which was put into circulation for the first time in 2009, is to change the global economy in the same way that the Web changed publishing methods.
Despite countless attempts to uncover the person or people behind the name, his identity has remained elusive.
There were many failed attempts by journalists to reveal the founder of Bitcoin, including an incident in 2014 in which Newsweek magazine highlighted a 64-year-old Japanese-American man named Dorian Nakamoto as the founder and owner of the idea of Bitcoin. That the claim was false and Nakamoto’s real work was to refute those claims.
The last candidate was Craig Wright, a former Australian academic, who claimed to be the inventor of the Bitcoin currency. Craig Wright wrote numerous posts and gave interviews to many technical websites, magazines, and newspapers between 2015 and 2016, saying that he had the idea of Bitcoin, but he later wrote a letter of apology after… His failure to provide unquestionable evidence on the matter.
How many people use Bitcoin?
According to research from the University of Cambridge, there are as many as 5.8 million users who have cryptocurrency wallets, and most of them use Bitcoin.
Germany is the only country that has officially recognized Bitcoin as a type of electronic currency. Thus, the German government can impose a tax on the profits made by companies that use this currency, while individual financial transactions remain exempt from taxes.
Some believe that official recognition of the currency gives it more legitimacy, while others believe that this may mean more regulation and linking the currency to governments, which conflicts with the characteristics of the currency as a currency not subject to any party.
What is the use of Bitcoin?
Bitcoin is used for a variety of purposes, including finance companies, cash investments, and fee-free money transfers.
Bitcoin can be spent online and at selected retail stores in the UK, including CEX stores, the Dell website, sushi restaurants, and some bars, with full lists of places online and offline that accept the currency.
It can also be withdrawn through a few dozen ATMs designated for it, and many users keep Bitcoin in the hope that its value will continuously increase and turn into a profitable investment.
Its price is often considered volatile, but it has currently provided huge gains for early investors.
Should you invest in Bitcoin?
The currency’s independent and decentralized foundations to protect against fraud and theft, as well as being free of transaction fees, have given some investors significant returns with its price rising at the beginning of 2013 from a few dollars to around $1,100 by November.
So it can be said that people who invested about $3,000 five years ago are now millionaires.
