bitcoin, currency, technology

Hey, there I hope you are doing okay wherever it is that you are reading this from. Thanks for being here. 

Though I’m late to the party today I will try and educate some of you on cryptocurrencies. I am neither a trader nor broker and the information provided here is purely for educational purposes. You can, however, do you research on the topic for a better understanding if you wish to delve into the world of cryptocurrencies  

I admit that you’ll find some words here a little bit hard to understand but please bear with me. Also make the internet your friend, if anything sounds confusing please google it and free yourself from confusion.

By the time you read this, the price of #Bitcoin will have drastically changed 😉. (Wednesday, November 4th 2020 the time I’m working on this post) 

What are Cryptocurrencies?

Before we look into what Bitcoin is let’s first discuss what cryptocurrencies are as Bitcoin falls under this category. Crypto” refers to the various encryption algorithms and cryptographic techniques that safeguard these entries, such as elliptical curve encryption, public-private key pairs, and hashing functions (excuse the jargon). 

A cryptocurrency is a digital or virtual currency secured by cryptography, making it nearly impossible to counterfeit or double-spend. Many cryptocurrencies are decentralized (unlike centralized fiat currency) networks based on blockchain technology —a distributed ledger enforced by a disparate network of computers. A defining feature of cryptocurrencies is that they are generally not issued by any central authority, rendering them theoretically immune to government interference or manipulation.

What is Bitcoin?

Bitcoin is a digital currency created in January 2009 following the housing market crash. It follows the ideas set out in a whitepaper by the mysterious and pseudonymous Satoshi Nakamoto. The identity of the person or persons who created the technology is still a mystery. Bitcoin offers the promise of lower transaction fees than traditional online payment mechanisms and is operated by a decentralized authority, unlike government-issued currencies. 

Some of the competing cryptocurrencies brought by Bitcoin’s success, known as “altcoins,” (alternative coins) include Litecoin, Peercoin, and Namecoin, as well as Ethereum, Cardano, and EOS. Today, the aggregate value of all the cryptocurrencies in existence is around $214 billion—Bitcoin currently represents more than 68% of the total value.

 

Advantages and Disadvantages of Cryptocurrency

Advantages

1. Cryptocurrencies make it easier to transfer funds directly between two parties from anywhere in the world, without the need for a trusted third party like a bank or credit card company. These transfers are instead secured by the use of public keys and private keys and different forms of incentive systems, like Proof of Work or Proof of Stake

2. In modern cryptocurrency systems, a user’s wallet,” or account address, has a public key, while the private key is known only to the owner and is used to sign transactions. Fund transfers are completed with minimal processing fees, allowing users to avoid the steep fees charged by banks and financial institutions for wire transfers.

Disadvantages 

1. The semi-anonymous nature of cryptocurrency transactions makes them well-suited for a host of illegal activities, such as money laundering and tax evasion. However, cryptocurrency advocates often highly value their anonymity, citing benefits of privacy like protection for whistleblowers or activists living under repressive governments. Some cryptocurrencies are more private than others. 

Bitcoin, for instance, is a relatively poor choice for conducting illegal business online, since the forensic analysis of the Bitcoin blockchain has helped authorities to arrest and prosecute criminals. More privacy-oriented coins do exist, however, such as Dash, Monero, or ZCash, which are far more difficult to trace.

Criticism of Cryptocurrency 

Since market prices for cryptocurrencies are based on supply and demand, the rate at which a cryptocurrency is exchanged for another currency can fluctuate widely, since the design of many cryptocurrencies ensures a high degree of scarcity. 

Bitcoin has experienced some rapid surges and collapses in value, climbing as high as $19,000 per Bitcoin in Dec. of 2017 before dropping to around $7,000 in the following months. Due to the Coronavirus (COVID-19) the price fell to almost $3,000. Cryptocurrencies are thus considered by some economists to be a short-lived fad or speculative bubble. 

But is it? 

There is concern that cryptocurrencies like Bitcoin are not rooted in any material goods. Research has identified that the cost of producing a Bitcoin, which requires an increasingly large amount of energy, is directly related to its market price.

Cryptocurrency blockchains are highly secure, but other aspects of a cryptocurrency ecosystem, including exchanges and wallets, are not immune to the threat of hacking. In Bitcoin’s 10-year history, several online exchanges have been the subject of hacking and theft, sometimes with millions of dollars’ worth of “coins” stolen.  

Nonetheless, many observers see potential advantages in cryptocurrencies, like the possibility of preserving value against inflation and facilitating exchange while being easier to transport and divide than precious metals and existing outside the influence of central banks and governments. Bitcoin and other cryptocurrencies are the future of money.

This year has seen a massive rise in its price 1 Bitcoin equals $29,390.99 (3,237,330.00 Kenyan Shilling). January 2020 1 bitcoin was selling at $9,501.38 (January 31, 2020). As you can see something good is happening. However, it should be noted that some cryptocurrencies are illegal in certain countries. Also if you’d like to invest in this sector it would be wise to do a lot of research or find someone well versed in the crypto industry to guide you. In addition to that, I am neither a trader nor broker and the information provided here is purely for educational purposes.

The internet allows us to instantly and globally send texts, images, documents, videos etc. why not money, money which we know only exists as digits in a banks database. A lot of people want to criticize bitcoin for being used to do bad/illegal things but when you look at it the most popular currency for doing bad things is the US dollar.

That’s all. Keep safe.


Below is some valuable information on Bitcoin and other cryptocurrencies.

 

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