Bitcoin, often known as cryptocurrency, is a type of money that is completely virtual. Like an online version of cash, it can be used to buy product and services. However, many shops have yet to accept Bitcoins and some countries have banned it altogether.
Who created Bitcoin?
Bitcoin was developed by Satoshi Nakamoto, although many presumed the name to be a pseudonym. Nakamoto also authored the Bitcoin white paper, and created and deployed Bitcoin’s original reference implementation. As part of the implementation, he also devised the first blockchain database. Nakamoto was active in the development of Bitcoin up until December 2010. Till now, no one really know the true identity of Nakamoto and various people have claimed, or have been claimed to be Nakamoto.
How does it work?
Each Bitcoin is technically a computer file that is stored in a digital wallet app on smartphones or computers. Hence, people can send Bitcoins to your digital wallet or vice versa. Every transaction is recorded in a public list called the blockchain. With the blockchain, it is possible to trace the history of Bitcoins to stop people from spending coins they do not own, making copies or to undo transactions.
How to people obtain Bitcoin?
- Buying it with real money
- Sell things and let people pay with Bitcoins
- Created using a computer
How are Bitcoins created?
Bitcoins are created using powerful computers. The process is called mining. Nonetheless, it could be years before you can get a single Bitcoin even if you start mining now. That is because the computers are made to work out difficult sums. However, the sums are becoming more and more difficult to stop too many Bitcoins from being generated. In the end, you could end up spending more money on electricity for your computer than the Bitcoin would be worth.
How do you store Bitcoins?
Bitcoin has gained international acceptance and it continues to grow in popularity. Unlike stocks, cryptocurrencies from crypto exchange can be withdraw and stored in an outside wallet. If you’re looking to store Bitcoin or other cryptocurrencies, it is best to find the best option available. After scouring the web and looking at reviews, these are some of the best Bitcoin wallets available.
If you are a beginner trying your hands on cryptocurrencies, Exodus might be the best option to start because it is free and has good customer support and optional support for cold storage. It is available as a desktop wallet and mobile wallet, with a very simple user interface and an exchange built-in. One of its most popular features is the ability to swap between a growing number of cryptocurrencies. Exodus allows for swaps between over 150 different cryptocurrencies. While it is great for beginners, more advance users might find some features lacking.
Electrum has been around since 2011 and it is one of the original Bitcoin wallets. Little has changed since then. Electrum excels at its primary functions, but it is more suited for advance users due to its complex options. It is open source, allows its users to set custom transaction fees, and has the option to choose between legacy Bitcoin and Segwit. Electrum allows its users to choose the level of security they wish to use.
Mycelium is only available in mobile app, so users who prefer to store their cryptocurrencies in the wallet might prefer this. It is an open-sourced Bitcoin wallet. Mycelium currently only supports Bitcoin, ETH, and ERC-20 tokens. In a way, it is similar to the Electrum wallet. The differences between them are Mycelium is mobile-only, has a more refreshed user interface than Electrum, and has built-in exchange. Similar to Electrum, Mycelium is one of the earlier wallets and users can set custom transaction fees so you can choose how long you’re willing to wait for a transaction to be completed. Some interesting features are also available on Mycelium, such as hardware wallet support, allowing users to hold their Bitcoin in an offline storage device while still using Mycelium’s user interface to see their holdings.
Trezor Model T
Trezor is chosen here because of its security strength. It comes with the strongest security features and track record of any reviewed hardware wallet. Trezor is synonymous with crypto cold wallet storage. Its Model T is the second generation of hardware wallets they have created. It gives user the ability to access third-party exchanges directly in its website interface. But the downside of this hardware is that it is priced at US $195, which hardly justifies the price. The Model T comes with a touch screen, which can be easier for a beginner than the buttons available in their previous model. It also comes with a MicroSD card slot, allowing users to use MicroSD cards to encrypt the PIN to further protect the device from attacks. Besides the MicroSD card slot, the Model T comes with a USB Type-C cable so that you can connect it to your smartphones or desktop computers. Currently, the Trezor Model T supports more than 1,800 different cryptocurrencies.
Ledger Nano S
Lastly, we have the Ledger Nano S, an affordable entry point into cold storage hardware wallets. The device is the first-generation hardware wallet introduced by Ledger, one of the first hardware wallets ever made. It is compatible with over 1800 cryptocurrencies. Unlike the Trezor Model T, it does not come with a USB Type-C cable, so users with a more advance smartphones may find trouble connecting to their device. However, the Nano S only has enough storage to make wallets for a limited number of cryptocurrencies at a time. If you were to delete an app to add another type of cryptocurrency, their online guide says it will not affect your assets. Although you have deleted the wallet and the crypto within it, it can still be seen in Ledger Live, but the wallet will not be seen on the device itself. If you like to send or receive to the particular wallet you have deleted, you might need to delete another wallet to make room. Priced at US $59, the Ledger Nano S is a fantastic wallet for those looking to store their cryptocurrency safely at a reasonable price. It is easy to use, making it ideal for beginners looking for safe and simple storage for a handful of cryptocurrencies.
Why do people want Bitcoins?
The main reason why Bitcoins are a hot commodity right now is because of the fact that it is not controlled by the government or the banks. On top of that, you are able to spend the currency anonymously. Nobody would know your account number unless you told them, albeit all transactions are recorded. In January 2021, the value of Bitcoin surged significantly after Elon Musk said he was a big supporter of Bitcoin. His support for online currencies in recent years caused a shift in their value due to his wealth and influence.
Is it safe?
As every transaction is recorded publicly, it makes it difficult to copy Bitcoins, make fake ones or spend other people’s Bitcoins. Nevertheless, it is possible to lose your Bitcoin wallet or ‘accidentally’ delete your Bitcoins and lose them forever. Such incident happened to an IT engineer, James Howells who accidentally threw away the hard drive of an old computer containing 7,500 Bitcoins back in 2013. Until today, he has not given up on his quest to retrieve his lost coins. There have also been thefts from websites that let you store your Bitcoins remotely.
Others have expressed concerns regarding the fluctuating value of Bitcoins over the years since it was created in 2009. Some people do not agree with investing real money into Bitcoins. This concern was voiced by the head of The Bank of England, Andrew Bailey, in October 2020. He said that he was “very nervous” about people using Bitcoin for payments pointing out that investors should realise its price is extremely volatile.
Some of the most expensive things ever bought with Bitcoins
• In May 2010, Laszlo Hanyecz paid 10,000 Bitcoins for two delivered Papa John’s pizza. 10,000 Bitcoins was around $41 at that time. Nine months after the purchase, Bitcoin was on par with the US dollar, making the pizzas worth $10,000. Five years later the two pizzas were valued at $2.4 million. Today, the pizza order is the equivalent of over $93 million.
• VinWiki CTO Peter Saddington purchased a $200,000 2015 Lamborghini Huracan for 45 Bitcoins back in 2017. Back then, 45 Bitcoin is worth around $420,000.
• Bitcoin investor Michael Komaransky sold his Miami mansion for 445 Bitcoin, equivalent to $6 million at the time of sale back in 2018.
• A painting depicting a personification of Bitcoin in the place of Jesus, surrounded by various allegorical figures from the crypto subculture, named Bitcoin Supper was sold for 4.65 Bitcoin ($2,900 at the time) after a bidding war, making it the most expensive Bitcoin painting ever sold.
Bitcoin and Elon Musk
If you are avid reader of Elon Musk and cryptocurrencies, you will likely notice the pattern where the prices of cryptocurrencies move according to what the billionaire said or tweets. Being the loudest voice in the cryptocurrency world, the Tesla founder often use Twitter to post about various digital assets, causing wild swings in their prices. Prices of several large cryptocurrencies went on a wild ride in recent months in response to his statements and actions at Tesla. Dogecoin plummeted in May after Musk appeared on Saturday Night Live and called it a “hustle.” That same month, Musk said Tesla would stop accepting Bitcoin as payment because of the huge amount of energy used to mine it, causing the price to fall.
However, earlier this year, the digital coin saw an exponential spike in value after Musk changed his twitter profile to “#Bitcoin.” Subsequently, in February, Tesla bought $1.5 billion worth of Bitcoin. Following the purchase, Bitcoins’ prices surged to a new high.