Bitcoin is different than any currency you’ve used before, so it's very important to understand some key points. Unlike government issued money that can be inflated at will, the supply of Bitcoin is mathematically limited to Twenty One Million bitcoins and that can never be changed.
Bitcoin was invented in 2009 by a person (or group) who called himself Satoshi Nakamoto. His stated goal was to create "a new electronic cash system" that was "completely decentralized with no server or central authority." After cultivating the concept and technology, in 2011, Nakamoto turned over the source code and domains to others in the Bitcoin community, and subsequently vanished. (Check out the New Yorker's great profile of Nakamoto from 2011.)
What is Bitcoin? (Brief History)
Like paper money and gold before it, bitcoin is a currency that allows parties to exchange value. Unlike its predecessors, bitcoin is digital and decentralized. For the first time in history, people can exchange value without intermediaries which translates to greater control of funds and lower fees.
Bitcoin is an electronic form of currency and a payment system invented by Satoshi Nakamoto. His stated goal was to create "a new electronic cash system" that was "completely decentralized with no server or central authority." Nakamoto unveiled the idea on 31 October 2008 to a cryptography mailing list, and released it as open-source software in 2009. After cultivating the concept and technology, in 2011, Nakamoto turned over the source code and domains to others in the Bitcoin community, and subsequently vanished. Despite many articles and investigation to unmask the person(s), there is still no conclusive evidence of who they are.
Bitcoin is both a computer protocol and a digital asset or unit of account. Its mysterious beginnings were intended by the author as a strategy to ensure that the security and use of the technology did not depend on the credibility of the creator. The protocol was made open source for everyone to read and build upon. Initially, Bitcoin was adopted by tech enthusiasts and libertarians. The first known Bitcoin purchase for really goods took place on 21st May 2010. A pizza was purchased by a volunteer in England to be delivered to Laszlo Hanyecz, a programmer living in Florida. Laszlo sent the volunteer 10,000 BTC in exchange for $25 worth of pizza. In May 2010, there were approximately 230 transactions taking place on the network on any given day. Over the past three years, there has been substantial growth in the number of transactions.
The volatility of the price of Bitcoin has attracted much media attention. At the beginning of 2013 the price was approximately $13. The Financial Times, the Wall St Journal amongst other news sources release stories documenting changes in the price and point to their potential sources. Most recently, there has been a large surge in demand in China with the Chinese Yuan overtaking the dollar as the currency most traded for Bitcoin.Bitcoins is a very promising new concept in the currency and payment system both in Africa and the world.
The value of Bitcoin has been growing since it was formed in 2009. Accumulating Bitcoins through the Bitcoin wealth investment network can change all our lives and bring more of the world’s population out of poverty than anything we have seen in decades
Why the World Should Embrace Bitcoin
A financial transaction is an agreement, communication, or movement carried out between a buyer and a seller to exchange an asset for payment.
· In ancient times, paper and coin were not the only form of money. Cowrie shells, Rai stones, rings, tobacco, knives and even human slaves have been used as forms of currency around the world. Along with globalisation and the internet boom, lots of financial innovation followed over the years to improve the ease and efficiency of transactions, such as gold, government-backed paper currencies (Fiat money), ATMs, phone banking, internet banking, credits cards, and online money transfer services like Paypal.
All of these have brought convenience to people’s lives. However, there were sceptics in every financial innovation throughout history, all surrounding four main issues: Trust and security
· Reliability – can it be counterfeited?
· The divisibility of the asset (ease of transaction)
· Store of value
In January 2009, the bitcoin – deemed to be one of the greatest financial innovation in the 21st century – was released. Many of its characteristics allowed it to be the solution to the four main issues mentioned, but it didn’t gain popularity immediately. Understandably, most people don’t get it. It is technical, and a lot of people cannot conceptualise what a ‘digital’ currency even is. Below is a simplified summary of its advantages:
1. It is decentralised, meaning that the bitcoin network isn’t controlled by one central authority, so no one has control over it, unlike fiat money controlled by central banks.
2. It allows peer-to-peer transfer, removing the need for third parties like banks to approve transactions.
3. It cannot be forged with its proof of work system, and it has the reach of the internet.
4. It is scarce in a sense that it is limited to 21 million bitcoins ever created by miners, and it can be divided to one hundred millionth of a bitcoin easily.
Its properties allow it to be one of the best financial transactions of all time. It provides speed, lower cost, trust, security, fewer errors and the elimination of central points. There are unlimited opportunities in the bitcoin protocol. For example, it can be applied to the Global Aid sector to deliver funds in the cheapest and most efficient manner to those who have suffered in the face of natural disasters. The funds can be tracked with the transparency of the blockchain technology – which prevents the funds from being misspent and deters corruptive attempts from the local agencies.