You’ve most likely come across a spam message promising to pay you 10 Bitcoins a day if you manage to do a “a very easy job for a few minutes” and the conversion rates probably drove you into checking out the link and forwading the message to another. But what are Bitcoins really? How different are they from ordinary currency and why or why not should you choose to either use or not use them?
1 Bitcoin is currently valued at 2661 USD and 265,324.40 Ksh. The Bitcoin is the first of what has come to be known as “cryptocurrencies”. These are forms of digital money that use encryptions to secure transactions and control creation of new units. There are other cryptocurrencies apart from Bitcoins gor example ethereum and BlackCoin but the Bitcoin is the most popular.
Bitcoins are not owned by any country or bound for use within any primitive territory or restricted to any organization whatsoever, however, they have attracted the attention of market giants from Paypal to Dell Computers and even caused the Chinese government to close down the accounts of many Bitcoin holders causing a market crash. There are no banks to manage your Bitcoins for you or financial statements to be received at the end of the month, everything is under your control.
The Bitcoin was developed by a mysterious developer who uses the pseudonym Satoshi Nakamoto in 2008 and only became popular in 2013. Nobody knows who Satoshi is or whether it’s a group however the lowest unit of a Bitcoin is named after it’s developer. A Satoshi is a hundred millionth of a Bitcoin i.e. 0.00000001 BTC. In Bitcoin, currency can have a decimal value if it’s below the value of one Bitcoin.
So how do you get started with Bitcoins?
The easiest way is to open a Bitcoin wallet which is basically an app or an online site that can manage your Bitcoin. A Bitcoin wallet is just like a wallet where you store your Bitcoins. Most Bitcoin wallets have functionalities such as providing you with information about people who are trading their Bitcoins for cash as well as your Bitcoin address which can be something like this: IDTAXPKZ0pgghetryhn669mmxvz3GaMT which allows you to send/sell or receive/buy Bitcoins from others.
Choosing a Bitcoin Wallet might be tricky. Some Bitcoin wallets e.g. Coinbase might require a lot of your personal information while others like LocalBitcoins might simply require your email address. Some Bitcoin wallets allow you to manage your Bitcoins offline while some might require an internet connection. Whatever wallet you choose however, make sure it’s up to your specifications.
Trading Bitcoins is quite a tricky affair, most wallets offer information about people who are trading their Bitcoins and the information about the prices and some bitcoin wallets e.g. LocalBitcoins allow you to Buy or sell Bitcoins and receive money through M-Pesa however some people might feel exposed and might not want their names and mobile numbers exposed. In such scenarios, some Bitcoin wallets offer QR Code scanners that allow you to buy or sell Bitcoins just by scanning QR Codes on others phones. Ironically, the best way to maintain anonymity in the Bitcoin sector is meet up with the person your trading this. To counter this, some shops in the US and China have Vending Machines where you can buy Bitcoins from.
So How Are Bitcoins Gotten Exactly?
The whole idea around the concept of a Bitcoin is market stability. Releasing too much money in the economy often causes inflation in a country and the value of a currency drops. Releasing too little money often causes the economy to grind to a halt.
The traditional way of getting Bitcoins is a process called mining. Bitcoin Miners are like bankers who ensure that the values add up according to the laws governing the production of Bitcoins . They donate their computers processing power to store transaction records on what’s called a blockchain. Traditionally, one could hook up his or her PC in a network of computers and donate his/her computers processing power to record and store transactions on what’s called a Blockchain. The miner is then awarded by the system with Bitcoin(s). That is, money just appears from thin air.
These days however, so as to make a profit from the Bitcoin mining process, one requires supercomputers performing calculations at the rate of over 24 quintillion per second. The developer of the Bitcoin designed the Bitcoin system in such a way that Bitcoins were not meant to pass 21 million Bitcoins. It is estimated that in 2140, the entire process of Bitcoin mining will grind to a halt and the value of a single Bitcoin which has been increasing amindst certain fluctuations over the past few years will shoot to unprecedented levels. So Bitcoin mining should be harder as each day passes.
The choice is yours in the end. The Bitcoin revolution has taken the world by storm receiving quite positive reviews from the movers and shakers e.g. Bill Gates and Richard Branson. The value of a bitcoin in 2008 was almost less than 10 dollars, by 2016 the price had short to a thousand dollars and in 2017, the price is almost double the value it was in 2016. Many have likened it to the state of the internet in 1984. I’m guessing that by 2030, one Bitcoin will be worth over a quarter a million dollars. The question is, do you want to miss the revolution as it unfolds?