People have chosen Bitcoin without hesitation if they had the chance to pick something which has gotten worldwide attention in 2017. Bitcoin was popular with lots of people during 2017 and it caught people`s attention. Bitcoin hadn’t been recognized as an amazing or curious virtual currency until 2016. However, in one year, people have shown surprising interest in Bitcoin, so the price has increased more than ten times. Let`s check in detail; What is Bitcoin and why are people interested in it?
1. What is Bitcoin?
Bitcoin is one kind of virtual currency and this definition is the way this currency operates. The word, Bitcoin, is a compound word combined from ‘bit’ which is a digital unit and ‘coin’. In plain language, it is not real money like ‘acorn’ in Cyworld and ‘Naver cash’ in Naver, but it is the money that can buy goods or pay for service fees. However, we can`t see or grab it like the money we use universally now. It`s just cryptic codes which wander online. Bitcoin is the first encoded currency based on ‘Blockchain’ technology which has taken the lead this century. Encoded currency is used as the term, virtual currency. It is the currency based on cryptology like Bitcoin and that makes it the safest deal possible. You can get Bitcoins if you solve the algorithm which is created every 10 minutes. The algorithm is composed of 64 ciphers. Among these, if you solve the first 19 spaces you can get bitcoin. To solve one of these problems, one PC has to solve the problem continuously for 5 years. Whenever you solve one algorithm, you can obtain 12.5 bitcoins.
2. Background of Bitcoin’s introduction
Before today`s coins and bills were used, people used seashells and rice as currency. Fabrics like silk were also used to make money as a standard item when exchanging other goods. Currency has been changing like this. Then, the vague notion that the invisible codes we couldn`t see or touch could be used for money became reality after the release of bitcoin. Bitcoin emerged after the financial crisis in late 2007. Bitcoin is a reaction in opposition to immoral financial forces and the central banks of countries that print money freely and immorally. In response to the reckless issuance of money, the number of bitcoin coins is expected to be 16.5 million as of 2018, and only 21 million are to be created by 2140.
3. Characteristics of Bitcoin
Nowadays, virtual currency is very common. Every internet service makes their own virtual currency. As mentioned above, Cyworld makes ‘acorn’ and Naver makes ‘Naver cash’. Also, Facebook makes ‘Facebook credit’ and Kakao makes ‘choco’ for their own virtual currency. Besides these, each internet service makes virtual currency after their service name. However, among all these things, the reason that Bitcoin received special attention is that it has a unique working method.
Bitcoin has no owner. It is not ‘cash’ operated by a particular individual or company. The operating system is a P2P (peer to peer) system and is dispersed in user’s computers. Bitcoin publishers are everyone who makes it or deals with it and exchanges it for cash. We can`t say this person is an owner among the Bitcoin users.
Bitcoin is different from individual countries like Korea, Japan and the U.S.A because the maximum amount of currency is settled. Each country`s central bank and the Mint makes new money depending on the situation of inside and outside of their country such as prices, exchange rates and interest rates. If you want to earn Bitcoins, you have to become a miner who solves the math problem and digs up money. You can buy Bitcoin in the Bitcoin stock market if you don`t want to do this complicated work.
4. Advantages of Bitcoin
Bitcoin is useful when you send or receive it. Although any person in a remote area can receive Bitcoin without any obstacles. Also, you can send Bitcoin anywhere without bank or middleman. In other words, the flow of currency is free. Also, it is hard to be counterfeited. In addition, all users share their transactional information. All things are possible because it is born from the block chain technique. Blockchain is also called, ‘public trading account book’ or ‘distributed ledger’. It is technology for defending against hacking when dealing with virtual currency. In other words, it defends double payment through P2P networks. Bitcoin isn`t acknowledged as a formal currency yet. Therefore, if Bitcoin is acknowledged as a formal currency, Bitcoin could get more benefits. For example, it could rise as a new item in the currency market. Bitcoin`s commission or costs are noticeably lower than other currency. Because it is just a currency that we can`t see, the basic way is not different with how we send the money through the bank. However, Bitcoin is evaluated as a more comfortable and innovative tool.
5. Weakness of Bitcoin
Bitcoin seems perfect and seems to have no problems, but it clearly has flaws. At first, the price of Bitcoin isn`t fixed. Up to now, Bitcoin`s price and value are increasing because of people`s huge interest. However, if Bitcoin users withdraw their interest in Bitcoin, it`s value rapidly decreases. In other words, the price of Bitcoin depends on market participant`s fickleness. Unlike existing currency, it is directly connected to the evaluation by people so that the price stability is poor due to the large price changes of the bitcoin. In addition, the bitcoin itself can be secured through a block chain, but the account of the exchange registered for investment can be hacked. For this situation, Bitcoin that you trade in the market can`t be safe anymore. Finally, anonymity of Bitcoin can result in a flaw. Some people might think it is a good way because individuals can protect their personal information. However, crimes are increasing through abusing the anonymity of Bitcoin. For example, in Finland, some people made a contract killing due to this flaw. In addition, in Korea, more than 100 cases of drug dealings and pornographic sites are operated by Bitcoin. Moreover, because Bitcoin is traded anonymously, it is difficult to retake if you lose it or your account is hacked.
6. Why people are crazy about Bitcoin< Copyright © The Gachon Herald All rights reserved >
Bitcoin has received a lot of interest ever since it was made. The reason is that it has been recognized as a tool to open the future currency market through strengths not found in existing currency. Recently, people have become so interested that the demand and the value for it have increased dramatically. It makes people start a speculation frenzy. The decisive reason why people are so enthusiastic about Bitcoin is that it has emerged as a tool that can easily be used to make large amounts of money. So why is it easy to make money?
The secret is that it`s price can increase without limit. Moreover, not only Korea but also countries around the world are beginning to recognize it as a new future investment method. Since then, Bitcoin has become hugely popular and the price has increased as high as it can. Another reason why the price of Bitcoin is increasing is that people`s demand for Bitcoin increase geometrically, even if the maximum amounts of Bitcoin is limited. Also, after the Japanese government revised their formal payment system law and accepted encoded currency as a payment system, Japanese funds inflowed with Bitcoin. Also, China whose money is not behind the world and have mined the most Bitcoin, and invest their money to Bitcoin constantly. As huge amounts of money from China and Japan continuously inflow, the number of people who want Bitcoin is increasing globally.
You can commonly find Bitcoin users around you. However, most of them use it even though they don`t know it correctly. They just use Bitcoin for earning ‘money’ mostly. If such a situation lasts, nobody knows the future of Bitcoin or what result it will bring about. It can be taken as a formal currency and bring new change in the currency market but it can suddenly disappear in the currency market because of people`s excessive speculation or indifference. Regardless of Bitcoin`s future, there is one definite point. Here and now, it`s high value and positive prospect is not the Bitcoin itself. We do not know exactly what will constitute Bitcoin if it is combined into virtual money, which backs up its popularity. According to this article, I wish many people to know Bitcoin in detail. Therefore, if you deal with it indirectly someday, I hope this article is of some help.