The Rise of Bitcoin and Other Cryptocurrencies:
Bitcoin is a Cryptocurrency created in 2009 by an individual or group under the pseudonym Satoshi Nakamoto. Transactions are completely decentralized and made without middlemen, meaning there is no central bank or government interference. In other words, transactions are made directly peer-to-peer from one person’s Bitcoin Wallet to another. Each individual bitcoin wallet holds a secret piece of data known as a private key or seed. So when a transaction is sent, it is digitally signed and secured using this secret piece of data. All transactions are then stored in the Block Chain, which is an encrypted online ledger of all bitcoin transactions.
The core features of bitcoin are faster transactions speeds, lower transaction costs, and of course, decentralization. Bitcoin users themselves dictate and validate transactions without the use of a central authority. While all this sounds like bitcoin may take over as the leading currency in the near future, it doesn’t come without flaws. While decentralization sounds great in theory, bitcoin certainly isn’t immune to hackers and other nefarious activities. Without bank or government control, there’s no safety net for lost or stolen bitcoins. Transactions can also be made anonymously, which creates an environment for criminal activities such as money laundering and tax evasion. So while cryptocurrencies like bitcoin, litecoin, and ethereum all facilitate exchange extremely well, the decentralized nature of them have both their benefits and drawbacks. It will be interesting to see how high the value of bitcoin can go and if it has staying power as a legitimate currency. Only time will tell.
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