Online Trading, Truths Of Bitcoin

Insight on Bitcoin becoming popular online currency

Bitcoin is a term that now commonly appears most everywhere, but despite its rising fame, most people do not seem to have a grounded understanding of what it is. 

Bitcoin, launched in 2009, by an anonymous group or person notoriously known as Satoshi Nakamoto, became a top digital currency that slowly took over the economy. Though it was not as well known at its start, Bitcoin has evolved into an infamous worldwide form of cryptocurrency. 

Bitcoin is an alternative form of currency that is constantly fluctuating. At first, Bitcoin might be able to draw one’s attention because of its modern use of technology.

“It has a futuristic value, a futuristic feel of a digital currency, which I think is appealing to a lot of investors, and I think there’s a lot of money to be made in crypto trading,” Bitcoin enthusiast Thomas Leahy said.

A leading factor as to why one might purchase a Bitcoin is because they think that inflation will diminish the value of the U.S. dollar.

“Mainly people who want it, have lost faith in U.S. currency and other currencies type of government, because of concerns of mounting inflation that’s coming, or at least their opinions of inflations.” AP economics teacher, Jerry Howland, said.

Howland also urgently mentioned that he did not want to assume that inflation was coming, but some people think there could be a chance and do not want to risk it. 

Bitcoin is unique because unlike other forms of currency, its creators put a set amount of Bitcoins into its programming.

“The core principle behind Bitcoin is that there are 21 million pieces of Bitcoin,” senior Benjamin Guffey said.

Due to its set quantity, it reassures its users that there is no room for inflation. 

People can mine for Bitcoins by solving complex algorithms with high-powered computer systems that run all day. The first person to solve the algorithm is rewarded a Bitcoin. Countries such as Iceland, are a good place for mining Bitcoins, because they are relatively cool, which can help keep the computer systems from overheating. 

“It requires a processing power to solve it and it is just a race to see who can solve it first, and then as soon as you solve it, you move onto the next one,” Howland said. 

Bitcoin is well known for its lack of government intervention. This might sound suspicious to some, but may also be appealing to others.

“It’s a form of currency that isn’t necessarily backed by any government or any actual thing,” Guffey said.

Though the government is quite aware of its existence, they don’t acknowledge Bitcoin as an impending threat. 

“The only reason it is holding its value right now is that it’s security and that there hasn’t been any government crackdown on it for the most part,” Howland said. 

Since Bitcoin is an independently run form of currency, it can come with it’s a list of pros and cons. Since it is a secure form of currency, there is also a dark side to it. 

“Most of the money is actually held by drug dealers, drug lords, sex trafficking and dark web stuff usually, and the reason why, is that it can’t be traced,” Guffey said.

This keeps some from using Bitcoin because they do not want to be associated with an active, illegal user and the activities they are using it for. 

While there are not many common places accepting Bitcoin, more and more places are, such as Home Depot, Starbucks and Whole Foods. However, Bitcoin’s are not to be spent on trivial objects from the grocery store or movie theater because it is not the same weighted price of the dollar. 

“Since one Bitcoin is worth several thousands of dollars it’s not really practical to buy things,” Leahy said.

It is more practical to buy larger and more expensive items such as cars or houses. All one has to do if they are willing to spend their Bitcoin is find a vendor who accepts this type of currency. 

“They have apps and other things that will show you who will accept them as payment, and as long as there are merchants who will, you can spend it that way,” Howland said. 

A customer can use their e-wallet to send the Bitcoin to the store they are purchasing from and various payment systems can handle it.

Since there is a predetermined amount of Bitcoin, one day a person will mine the last one. 

“We are coming up on mining the last Bitcoin, I believe we are about 90% through the digital supply of Bitcoin, but it takes just as long to find the 10% as it did to find the 90% thus the value is maintained,” Leahy said. 

While some think that it would be impossible for Bitcoin to overthrow the U.S. currency, others are uncertain whether or not Bitcoin will become the future form of online currency. The only way it could be would be if it was completely accepted anywhere a person could spend money. 

“When coming to investment the golden rule is, if you don’t understand it you should not invest in it and that is the golden rule about any type of investment,” said Howland.