McKay Dell'ergo - Staff Writer
Bitcoin is a type of cryptocurrency. Cryptocurrency is a medium of exchange that is created and stored electronically. Algorithms and other encryption techniques are used to create monetary units and to verify the transfer of funds. Bitcoin is not like government money with a set value, it isn’t shiny like gold to make jewelry, so what gives Bitcoin value?
Bitcoin is valuable because of three reasons: it can be used as currency, equity, and a social network. The currency part of Bitcoin is easy to understand. You can purchase items with Bitcoins. Next, Bitcoin has equity which means the value of shares in a company, so as Bitcoin became popular the price of its shares went up too. This raised the value of each Bitcoin itself as well. Lastly, being a social network also increased the value of Bitcoin; the more people using it the more the value increases. So take Facebook for example, when it first came into the spotlight it was not the only social media website out, and it wasn’t the best either, but as more people used it it grew above all the other social media’s simply because more people were using it. Why would you use Bitcoin over regular government currency?
There are 3 main pros to using Bitcoin. First, Bitcoin has no 3rd party organization to process payments, unlike paypal or a credit card. With the exception of buying bitcoins they are yours, you own that money and can spend it however you want. Second, when using Bitcoin you can’t lose any information to hackers. Unlike online shopping where you enter sensitive credit card information into a website that may or may not be secure. Using Bitcoin for transactions don’t require any sensitive information making it a safer way to purchase items. Third, you can make your own money. Through a process called mining, you earn Bitcoins that you can spend or sell for cash. Mining is just letting Bitcoin software run on your computer, this is why nobody owns Bitcoin is because when you “Mine” you are running a portion of Bitcoin as a whole on your computer.
One question that no one can answer about Bitcoin is who created it. What we do know is Satoshi Nakamoto created Bitcoin, but who is Satoshi Nakamoto? Some speculate that Nakamoto is a 64 year old Japanese-American living in California, or an Australian man named Craig Wright. Others think Google created it or a government agency. All we know is on January 3, 2009 Satoshi Nakamoto (the alias online) announced the first release of Bitcoin saying that Bitcoin is “a new electronic cash system” “...It’s completely decentralized with no server or central authority.” How can you get Bitcoins? You can get Bitcoins in two ways, buying them with a credit or debit card, or mining. You can buy Bitcoins much easier now that they have grown in popularity. Websites like Coinbase, Coinmama, and Bitpanda allow you to purchase Bitcoins from the open market with debit or credit cards. Or if your computer has enough computing power you can mine for Bitcoins and make money while you sleep… literally. Using Bitcoin and other cryptocurrencies for purchases in the last few years has grown in popularity, and it is a good time to get into Bitcoin and other forms of cryptocurrencies.