Bitcoin mania: How it became the king of cryptocurrencies
A real boom of internet technologies happened quickly mostly due to global computerization and the ever growing and evolving internet that became cheaper and cheaper with each year. A particularly interesting change in the philosophy of web evolution was adopting the approach of a user-friendly ideology that manifested itself in a plethora of new technologies that catered to users. This led to a blooming explosion of internet commerce and made everyone think harder to speed up payments and moving finances in general. While debit/credit cards and online payment systems were sufficient in many ways, the world needed something more. The world needed an alternative that would allow everyone to be freer.
A certain change occurred much later. The history of bitcoin starts on October 31, 2008. A legendary now figure introduces the world to a completely new concept of a decentralized currency that would have absolutely no authorities to bow to. A currency that governs itself and relies on massive amounts of data to protect its users from scams and errors. The man’s name is Satoshi Nakamoto. He is a pioneer of the domain and creates the very first so-called non-fiat money.
The network did not just pop up from nowhere. Modern online casinos, Forex brokers, and many other businesses that rely solely on internet financial operations wanted something like bitcoin. There was a nearly palpable demand in the market and technology responded. The new tech is based on decades of research and innovations without which the very evolution of the internet would have been impossible. For example, the year 1997 was the year of HashCash. This algorithm helped to find the proof of work and became a cornerstone of the technology behind the block-chain invention.
Within next several years, we witnessed how other techs appeared on the market each moving us one step closer to the first cryptocurrency. The world where people who enjoy gambling in online casinos and binary options without problems was coming closer. In 1998, the world was introduced to a revolutionary mechanism of inflation control. Just a year later, the ISO commission decided to approve the usage of digital certificates.
We still don’t know much about the inventor of bitcoin who is rumored to be one of the richest people on planet Earth with roughly $4 billion worth of cybercoins. There are different investigations and theories about the true identity of the supposedly Japanese developer whose biography and personal information are complete mystery to the whole world.
Why bitcoin? Why now?
So what is BTC? Speaking in simplistic terms, this is a virtual currency that has absolutely no physical nominal and protected by encryption. The principle of the system is elegant and simple. There is a completely independent data massive that contains information about every single transaction that ever happened within the system as well as data about generated coins. By using P2P connections, the network does not need a centralized governing body. At the same time, we know exactly how many BTCs will be produced and thus do not really care about inflation. The final amount of BTC will be 21 million which is more than 21*1014 Satoshi – the smallest usable bit of this new virtual money.
Cryptographic money like BTC are ideal for people who desire to stay anonymous during economic activities and do not like the idea of exposing themselves to the world. This is why so many people prefer this method of payment when playing in online casinos for example. The thing is that you don’t need anything but a transaction number which consist of 34 Latin letters and numbers. The address can be sent via QR-codes, barcode or as an image.
Who are miners?
The only way to create new BTCs is to mine them. This process requires a lot of computing power. People who call themselves miners must keep track of all deals within the network and ensure that all operations are solidified “in stone” forever making them unique. The process of writing a new block on top of an existing one is the reason why people call it “blockchain”. Every time a miner creates a new block, he is rewarded with 25BTCs.
Not every user can spend all time getting new BTCs. This is why first online “crypto” markets appeared later in 2010. These places are for exchanging money and buying brand new virtual “coins” with traditional fiat money. Due to an ever-growing demand in the market, the price constantly cripples upwards and skyrocketed to $5700 per BTC as of October 2017. Top online markets trade currencies 24/7.
Mining is a very crucial part of the system hierarchy but there are other cornerstone participants like exchange kiosks around the world and companies that integrate BTCs. Initially not as liquid as other types of money, new virtual coins quickly earned their rightful place in online commerce. Today, you can buy with this BTCs on multiple websites including Amazon and Overstock. You can also spend your virtual cash to buy stuff in XBOX stores.
The main takeaway
BTCs slowly become an important part of our lives just like huge flat TVs and multicore chips. However, the international community must decide how to approach the existence of cryptocurrencies that do not obey traditional financial institutions. Hopefully, BTCs are here to stay.