Some fifteen years ago, one would never have thought about the feasibility of the idea of a "digital currency". How digital could a currency go? We had cheques, cash and credit cards. How could you spend money that's not actual money or in the value of any currency? The replacement of Fiat currency by electronic money or currency.
What if I told you that this digital currency operates a banking system where transactions are publicly recorded for all to see? Would you still be interested in this currency? I mean, how cool is it?
Bitcoin was the first cryptocurrency invented or the first successful cryptocurrency. There have been previous attempts at creating an electronic currency. In the 1990s, digicash was invented, but there was poor reception for this cryptocurrency, and it soon crashed. There are about 10,000 different cryptocurrencies in the crypto world today, with an accumulated value of about ten thousand dollars. Bitcoin is the most well-known and widespread cryptocurrency. It is also known as the king coin. Bitcoin was invented by a group of people called Satoshi Nakamoto. The identity of this group remains hidden.
The currency began circulation on January 3, 2009, when the first bitcoin block, “genesis block”, was minedHowever, it wasn't until 2014 that cryptocurrency began to capture the interest of the significant public.
The inception of Bitcoin was met with a lot of hostility by certain individuals, corporations and countries as many couldn't believe the feasibility of a digital currency or, in other words, one-world money. They also postulated the theory that this cryptocurrency would promote money-laundering moves.
The first set of people holding bitcoin has a different story to tell about it. The early miners were the first beneficiaries of this digital currency.
How Do You Make Money From Bitcoin
Bitcoins are obtained as a reward through a process known as mining.
Mining is a process that requires solving puzzles. Successful solving of these puzzles is rewarded with bitcoin.
Alternatively, you can purchase bitcoin with a fiat equivalent from reputable trading platforms and leave it to increase in value. This difference in value will be evident in the fiat currency used to purchase bitcoin as bitcoin appreciates.
In 2017 there was a bitcoin bubble that caused bitcoin value to increase, leading to the purchase of crypto shares and the establishment of mining firms. However, the currency rebounded, with 2020 being the best year for bitcoin so far.
Bitcoin Reception
In the early years of its introduction, bitcoin received a mixed reception from people worldwide. Because of its volatility, the value of bitcoin changes often. Additionally, it is not issued by banks or governments.
Due to various misconceptions and myths, many remain skeptical about mining or investing in bitcoin.
Certain people with special recognition, such as celebrities, sportsmen, can influence the value of bitcoin due to their status.
Elon Musk
We can probably say Elon Musk contributed to the rising bitcoin value to its all-time high of over sixty-eight thousand dollars on November 10 2021. Musk had previously jeered cryptocurrency and crypto miners and traders on Twitter until January 2021, when he included "bitcoin" in his Twitter bio. This singular act alone led to a 25% spike in bitcoin price. This was no surprise because he had over forty-six million followers. Before this, in 2019, he called bitcoin's design a "brilliant" one.
Because of his status, Musk has somewhat influenced the value of cryptocurrency over time. He is known to have bought bitcoin, dogecoin and ethereum.
Musk, the billionaire businessman, announced the purchase of 1.5 billion dollars worth of Bitcoin by his company Tesla. His company, Tesla, also owns almost 43000 bitcoins.
He also announced that it is now possible to purchase a Tesla with bitcoin. Musk attributed to the "Elon effect" when he announced that Tesla would no longer accept bitcoin as payment, causing the price to drop.
Jack Dorsey
Twitter's boss and ex CEO Dorsey is an incredible advocate and a diehard investor of Bitcoin. He called bitcoin the future world currency when it crashed in 2018.
Not only does Dorsey have a personal bitcoin investment, but his company Square also has its Square Cash App supporting bitcoin functionality.
He is such a bitcoin forward investor that he owns his bitcoin node translating to him being able to mine and verify transactions on the blockchain.
Bill Gates
Microsoft boss and billionaire Bill Gates was among the top celebrities who expressed reservations about bitcoin in its first years. However, by 2014 he signified his interest in digital currency because of the comfort of large transactions compared with a fiat currency. In his words, "Bitcoin is better than currency in that you don't have to be physically in the same place and, of course, for large transactions, currency can get pretty inconvenient."
Snoop Dogg
One of the celebrities that made us open to the cryptocurrency bitcoin is Snoop Dogg.
In 2012, Snoop Dogg was ahead of the BTC game when he sold his album, then at 0.3BTC in 2013, an equivalent of over ten thousand dollars in its current value. However, we however cannot exactly say how many albums he sold from this.
Richard Branson
The founder of the multi-billion dollar Virgin group conglomerate might not have actively declared his stance on BTC. However, actions strongly indicate that he acknowledges the benefits of this cryptocurrency. Branson has declared his interest and support for bitcoin many times by tweeting about the cryptocurrency on his Twitter page. Although there have been reports that scammers have used his name to conduct cryptocurrency scams.
Floyd Mayweather
The ring champion and professional boxer is a celebrity who owns bitcoin and publicly declares this. He attended a bitcoin conference in Miami and while declaring his support for bitcoin, he said there might just be another cryptocurrency in the future that’s nearly as great as bitcoin. This was taken by the audience as a controversial view regarding bitcoin. Mayweather is notable for promoting ICO of various cryptos.
Lots of bitcoin enthusiasts and positivists have used social media to pioneer the support of cryptocurrency by sharing market insights and perspectives to a global audience. They predict or forecast trends using algorithms. They used social media platforms like Twitter Reddit to educate and orient people to invest in bitcoin. They also teach them how to manage their bitcoin. These sets of people are called cryptocurrency influencers or crypto influencers.
Notable crypto influencers are;
Sam Bankman-Fried
Sam Bankman-Fried is the CEO and founder of FTX, a cryptocurrency exchange platform that enables users to buy and sell cryptocurrency. Also known as his initials SBF, the twenty-nine-year-old billionaire wizkid has amassed over $22.5 Billion from cryptocurrency.
With over half a million followers on Twitter, his posts are geared at educating, enlightening and informing his followers about cryptocurrency generally.
He is the wealthiest known cryptocurrency billionaire. He donated five million dollars to President Joe Biden's campaign in 2020.
Chanpeng Zhao
Besides being the wealthiest bitcoin entrepreneur, Chanpeng Zhao is the CEO and founder of cryptocurrency platform Binance. The 44-year-old is estimated to have a network of over ninety-six billion dollars.
As he is famously called in the crypto world, CZ takes to his Twitter page @cz_binance to promote his platform and share insight with his five million followers.
His company Binance on a slow day completes about forty billion dollars worth of transactions. Sometime in 2021, the company completed a whooping sum of about 170 million dollars in transactions.
Bitcoin as a Legal Tender
World economies have different opinions about this cryptocurrency. Some see it as an avenue to a beneficial rise in economic activities.
Although it is not backed up by any bank or government, some countries have now adopted bitcoin as a legal tender.
In a poll conducted by international online research and data analytics firm YouGov, twenty-seven per cent of US residents want bitcoin declared a Legal Tender.
Bitcoin Trading Platforms
Apps and programs are designed as platforms, banks and brokers to facilitate bitcoin trading.
Trading platforms are also used for converting bitcoin to fiat currency.
Binance
Binance is the world's biggest cryptocurrency exchange platform, with a market capitalization of over $1.3 billion in April 2021. Users are provided with a crypto wallet to store their bitcoin and other cryptocurrencies on registration. It was founded in 2017 by Chanpeng Zhao.
However, its operations were banned in 2019 in the US on regulatory grounds.
Its activities are also strictly regulated in the United Kingdom by requiring that all firms dealing with cryptocurrency be registered. In addition, Thailand and Japan have also banned the operations of Binance in their country.
FTX
Founded in 2019, FTX is a legitimate cryptocurrency exchange and trading platform. Its headquarters are based in The Bahamas. The platform has over one million daily users and an average trading volume of ten billion dollars in 2021.
This platform charges zero for deposits and is free for withdrawals except for US dollars.
Residents in the United States are not permitted to trade on this platform.
Cryptorocket
Cryptorocket was founded in 2018. One significant advantage of cryptorocket is that it is not jurisdictionally regulated.
One of the platform's pros is the absence of deposit or withdrawal fees and no minimum deposit. In addition, it is notable for its fast order execution.
Terminologies In Bitcoin.
Like every concept or field, there are terminologies involved in the mining, investment and transaction of bitcoin.
Blockchain
Blockchain is a systematic way of recording information such that changing, hacking or cheating the system is made difficult or impossible. Blockchain was invented primarily for bitcoin, although it is used to transact other cryptocurrencies.
Peer-to-peer technology/system
Just as the name implies, peer-to-peer involves the exchange of data, information and assets between two parties without the engagement of a central or third party.
This system enables users to buy, sell, send and receive bitcoin on the cryptocurrency network.
Mining
This is the process by which bitcoin is released into circulation. It involves solving difficult puzzles. After successfully solving these puzzles, a new block is discovered and added to the blockchain.
Bitcoin can be mined with hardware or software. A bitcoin is divisible up to eight decimal places.¹/100000000 or 0.0000000. This smallest unit is referred to as a satoshi.
Twenty-one million bitcoin in total is able to be mined.
Wallet
A wallet is a secure digital space to keep bitcoin. Bitcoin mining and exchange platforms have wallets for users. Unlike an everyday wallet that can be accessed for cash, a private key is required to access a bitcoin wallet. Sending, receiving and converting bitcoin is facilitated by a wallet.
The Future of Bitcoin
Many view the emergence of Bitcoin and other cryptocurrencies as a financial movement driven by the opportunity for radical innovations and entrepreneurship in financial solutions created through the spread of Internet-based technology.
Bitcoin rose from less than one dollar in 2011 to more than sixty-eight thousand dollars in 2021. Bitcoin offers loads of advantages to owners and investors. Bitcoin is also credited with the emergence of other cryptocurrencies and digital currency systems.
To understand the primary drivers behind the use of the most prominent cryptocurrency, we explore the necessary infrastructure for Bitcoin's blockchain.
Increasing our understanding of the socio-economic and institutional factors associated with adopting the infrastructure behind virtual currencies might offer us important insights into understanding the growth of bitcoin to date.
Many view bitcoin as a disruptive channel designed to interfere with the traditional finance system. Despite all these, the advantages of bitcoin cannot be underemphasized.
1. It is a valuable transaction tool for countries with low and or poor banking services.
The majority of populations in third world countries do not have access to essential banking services to ease the personal and corporate financial crisis. Bitcoin's volatility and ease-of-use override the instability, dangerous lending practices, and interest rates accompanying fiat currency.
2. Low Transaction Costs
Because transaction with bitcoin is virtual, the transactional costs associated with cryptocurrency is minimal. Banks charge customers for every transaction they carry out. Bitcoin transactions exclude commission and bank charges.
3. Transparency of Transactions
Every bitcoin and blockchain transaction is monitored by a digital ledger where every transaction can be tracked. Therefore, these transactions cannot be manipulated, and it guarantees their authenticity. The transparency of transactions makes it impossible to commit fraud and reduces the risk of corruption as it is digitized and made for all available to see.
4. International Trade
Bitcoin and cryptocurrencies, in general, have fostered international trade. Entrepreneurs can now sell goods and provide services without fearing currency exchange rates. Many business owners do not need to worry about exchanging fiat currencies at a loss because a digital currency enables them to receive payments in the easiest and most stressful ways.
It is unknown what the fate of bitcoin is or if the concept of cryptocurrency in the long-term is sustainable. However, we know that millions keep investing in the bitcoin world economies have their eyes on bitcoin. Countries like El-Salvador however have adopted it as a legal tender.
The world is constantly and continuously changing, and we might have to forgo card transactions and go fully digital. By then, paying for a cup of coffee and a croissant would not involve cash or the swipe of a card but be valued in bitcoin. Bitcoin is also a decentralized currency, freely being traded across space and time.
As of November 2021, over 18.875 million bitcoins have been mined of 21 million bitcoins that can be mined.
It is estimated that the last bitcoin will be mined somewhere around 2140. So, you still have time to jump on the bitcoin train.
FAQs
Bitcoin or bitcoin?
Bitcoin with a capital "B" is used to refer to the network or system of the cryptocurrency, while bitcoin with the small "b" is used to refer to the cryptocurrency as a unit of value.
What is the difference between cryptocurrency and bitcoin?
Cryptocurrency refers to digital/virtual/electronic currency, while bitcoin is a type of cryptocurrency.
How safe is it to invest in bitcoin?
Every investment is a risk as one cannot conclusively determine the investment's direction. However, judging by the path which bitcoin has threaded by tens of thousands percentage increase since it was introduced in 2009, we can say it's a relatively safe move to invest in bitcoin.
What is the best cryptocurrency to invest in?
What cryptocurrency is the best to invest in varies across investors, platforms, and individuals. Different crypto influencers advocate for various crypto of their choice. For example, Elon Musk vouches for dogecoin and ethereum and significantly influences the value a couple of times.
Experts study market trends to forecast which cryptocurrency to invest in.
Sources
