Baffled by Bitcoin? Here are Some Things You Need to Know
Virtual currencies have gone from being an obscure concept favored by technology geeks and digital anarchists to a headline item in most of the world’s financial and pop culture media. It’s impossible to ignore Bitcoin nowadays, with everybody from Apple cofounder Steve Wozniak to poker pro Daniel Negreanu having an opinion about it or investing in it. As we move forward into an increasingly digitized world, it’s critical to stay in the know about this ubiquitous cryptocurrency. So, if you’re baffled by Bitcoin keep reading to find out more.
So, what is Bitcoin?
The word “Bitcoin” has now come to represent different things to different people. For some, it’s literally a virtual “coin” that represents a monetary value, for others, it’s the industry, and for others still, it represents all the cryptocurrencies in existence (including altcoins like Ethereum and Bitcoin). However, Bitcoin is an amalgamation of technology created by the mysterious Satoshi Nakamoto in 2009 to create a “decentralized, peer-to-peer payment network.” Simply put, it’s a way for people to send and receive transactions without the need for a middleman such as a bank or even a digital payment platform like PayPal.
Bitcoin runs on the blockchain, an open virtual ledger that records every related event or transaction. That includes the creation or “mining” of Bitcoin as well as exchanges of Bitcoin for goods and services and vice versa. Transactions record as “blocks” in the ledger, which then get approved by the peer community of Bitcoin users. It’s truly revolutionary technology because there is no central authority or financial institution involved, meaning that there are no transaction fees. And since there is no altering or falsifying approved transactions on the blockchain, this technology also has the potential to be a powerful tool in business, healthcare and government administration.
Where is Bitcoin accepted?
Considering the technology has only been in widespread use since 2009, various industries and scenarios have accepted Bitcoin as a method of payment. Some industries and scenarios include:
- The Art Industry – The art world has embraced cryptocurrencies in more ways than one. It started with Bitcoin-for-art galleries, such as the Dadiani Fine Art gallery in London in which clients can use Bitcoin and other accepted altcoins to purchase existing artworks. As quite a contemporary concept, virtual currencies provide plenty of artistic inspiration to those working within the industry. Berlin-based artist and engineer Julian Oliver has recently created a blockchain-influenced installation that addresses climate change. Meanwhile, Bitcoin itself provided the inspiration for Sarah Meyohas’ 2015 work, BitchCoin. It’s now possible to even purchase artworks that store Bitcoin, and, using marketplaces like Maecenas, art lovers can use cryptocurrency to buy shares in famous paintings.
- Online Gaming – Unsurprisingly, given their decentralized nature, Bitcoin and altcoins have made waves in the online gaming industries. There are now a surprising number of “Bitcoin casinos” — online gaming platforms that accept Bitcoin as a payment method — as well as new start-ups powered by blockchain technology. Some new online casino platforms are even launching in conjunction with a brand-new cryptocurrency “coin.”
- Retailers – It’s not all high-end art and online casinos when it comes to spending cryptocurrencies, as more and more retailers (online and brick-and-mortar) accept it as a payment method. Major online retailers that are Bitcoin-friendly include the likes of Microsoft, Shopify, Expedia and Overstock.com, and soon, you’ll be able to use Bitcoin in person to buy your daily latte at Starbucks. Tools like the CoinMap (recently rebooted as CoinMap 2.0) are an excellent way to discover local retailers that accept Bitcoin.
Can anyone buy Bitcoin?
Theoretically, yes, but there’s a price of around $3,800 to pay for a single “Bitcoin”! Therefore, anybody can buy or sell cryptocurrencies using Bitcoin wallets and cryptocurrency exchanges, which are accessible on web platforms and as mobile apps. The process of buying digital currencies is very straightforward, and you can use existing fiat currencies to buy them, too. There are separate wallets and exchanges. However, platforms like Coinbase make it a lot easier to buy, store and exchange Bitcoin from a single account.
Once you have an active account with a crypto exchange, you can choose to purchase additional currencies like Litecoin or exchange your existing crypto for a different one. According to industry statistics, there are currently over 2,500 individual cryptocurrencies (including Bitcoin) in existence, which is phenomenal growth considering that 10 years ago, there was only one. The basics of cryptocurrency investment would take a whole other post to explain, but if Bitcoin was a little out of your price range, and you wanted to explore this fascinating industry, you can be sure to find many alternative and affordable “coins” on the global exchange.