Bitcoin: The Future, or World’s Greatest Scam? | Earn Money Online in 2021
Dear friends, Here is a new article about Bitcoin, as you know it took bitcoin 12 years to become a trillion-dollar network and there’s nothing else bitcoin is worthless artificial gold.
Motivations Behind Bitcoin: I must say bitcoin is the best money currently available because it’s decentralized it cannot be stopped. The main motivation is for the price to go up they don’t use it they don’t transact in it they just huddle it. They’re hoping they get rich and what’s your response to that people not using bitcoin the most don’t understand it some of you label it a scam and others praise it extensively saying it’s going to be one of the biggest things in the future or that it’s going to make us question what exactly money and currency really is. There are only so many social media profiles with laser eyes in them that you can bear before you start to ask what exactly is going on here and the more I tried to answer that question the more intrigued I was by bitcoin and the ongoing saga it’s become.
Take for example the fact that it’s creator an individual or a group of individuals under the pseudonym Satoshi, Nakamoto remains anonymous and unidentified to this day and is said to own one million bitcoins, which at the time of making this article makes Nakamoto worth over 62 billion dollars theoretically should the price of a single bitcoin rise to 177 000. Nakamoto would be the richest person in the world were they to sell their coins. But Nakamoto is only one part of what makes this ongoing saga so fascinating truth is it’s a wild world out there and I think it’s time that you and I finally take a step into the realm of crypto and begin to make sense of it all.
Bitcoin is a story, it’s a story about the very thing that influences our actions today. The piece of paper that we call money or the numbers you see on a screen in your bank account but if you rewind time far enough you’ll find that our ancestors purchased goods using a method we wouldn’t recognize today. Payment first began with barter a system that involved trading goods for other goods, a few fish for a loaf of bread, a dozen eggs for a bunch of lettuce, and so on. But this system had a problem it relied n us wanting what the other person had it relied on a coincidence of wants so our ancestors realized that we needed a medium of exchange to represent the value of the items they wanted to buy such as cattle shells.
Eventually coins made of precious metals then thousands of years later countries started using paper money that was backed by gold in other words the dollar would be backed by a certain amount of gold and you could theoretically exchange those dollars for physical gold that a country held in its reserves this system was known as the gold standard.
in 1971 however, the US officially left the gold standard along with many other countries, this meant that the dollar was no longer backed up by gold, the dollar was simply backed up on the basis that the government decreed that it had value and we all agreed that it does doing this allowed governments and central banks to have more control over our money supply making it easier to use monetary policy to respond to times of financial crisis. This type of money the money that we use today which is no longer backed up by gold but rather our faith in government is known as fiat money.
Now there exist both arguments for and against fiat money but the important thing to realize here is that this system relies on trust in government but what if you don’t have that trust who do you turn to then-emerging in the late 1980s. The cipher punks were part of a movement that was against centralized authorities like governments being able to spy on people or have access to their information they advocated for what is known as cryptography ways in which we’re able to secure communication in the presence of third parties typically through the use of encryption with their libertarian views. The cipher punks saw a clear contradiction between their values and the current financial system when they looked at banks or central banks they saw centralized institutions with the power to print as much money as they wanted on their terms.
We the people trust our banking institutions to be a safe place to put our money that they won’t mismanage it and ultimately collapse cipher punks is going bankrupt and financial markets from Asia to Europe are doing their utmost to prevent from turning from dark to black brought down by bad mortgage investments Lehman which has 25 000 employees will be liquidated. The American people can remain confident in the soundness and the resilience of our financial system major financial institutions have teetered on the edge of collapse and some have failed. We are in the midst of a serious financial crisis in 2007 and 2008 a global financial crisis was unfolding a crisis that had its roots in risky lending from banks so much so that it led to the collapse of one of the United States biggest banks at the time. It was perhaps no coincidence then that under the shadow of the 2008 financial crisis.
A white paper titled bitcoin a peer-to-peer electronic cash system began to circulate on a cryptography mailing list a paper that was written by someone under the pseudonym of Satoshi Nakamoto. This nine-page manifesto was a blueprint for what Nakamoto described as a purely peer-to-peer version of electronic cash which would allow payments to be sent directly from one party to another without going through a financial institution. Nakamoto took the technological innovations of former cipher punks and put them together into what we now call blockchain technology. To put it simply Nakamoto laid out a framework using mathematics computer science and cryptography to create a currency that could be used for transactions without needing to trust a central authority trust was the problem.
What exactly a bitcoin is:-Bitcoin was set out to solve now let’s pause for a moment here is where things can get a little confusing whilst we’ve covered the motivations behind bitcoin. Now we must figure out what exactly is it and how is it decentralized? Understanding blockchain technology is the key to understanding the fanaticism around bitcoin that we see today. Bitcoin is not a physical coin it is in fact entirely virtual a digital currency think of bitcoin as simply transactions on a ledger.
Blockchain: For example let’s say Ben pays two bitcoins to Jane and Jane pays two bitcoins to Carl these transactions are recorded on a ledger and so on and so forth. For every transaction that comes after banks work in a similar way recording the transactions made through a bank account each and every day using their own system verifying that the transactions made are in fact valid. In other words, a bank can make sure that somebody with only a hundred dollars in their account cannot spend any more than that bitcoin, however, is intended to be decentralized. So how could it possibly verify that the transactions made on its ledger are legitimate that Ben even has two bitcoins to send to Jane in the first place this is where we introduced the concept of a peer-to-peer or distributed ledger system that Nakamoto outlined in his white paper instead of a central authority owning the ledger that records all bitcoin transactions. The ledger is instead distributed amongst all the other computers or nodes in the bitcoin network a network that anyone with a computer can join simply by downloading the bitcoin software.
Now each time a transaction is made on the ledger every computer on the network will attempt to verify whether this transaction is legitimate by solving complex algorithms when a consensus is reached on the network and the transaction is valid it will be permanently stored on the ledger. If a single node on the network attempts to validate an incorrect transaction all the other nodes on the network will reject it and after a certain amount of transactions are made on the ledger a new ledger is created that contains a type of code otherwise called a hash that links back to the previous ledger this is why we call it a blockchain.
Mining: Each of these ledgers or blocks contain a certain amount of transactions that are then linked to the previous block in the chain and no public identities are used when transacting on the bitcoin blockchain instead, individuals have both a public and a private key which appear as a string of random numbers and letters a private key is used to create a digital signature. And a public key is used to verify the signature without revealing the private key. This process of validating transactions on the block is known as mining. Miners receive a reward of a few bitcoins for every block they successfully mine incentivizing them to continue adding to the blockchain if someone attempts to hack or invalidate a previous block on the blockchain they would end up invalidating every single block that comes after it which would be easy to detect and reject by the network.
The bitcoin blockchain allows you to see every single transaction that has ever been made since the very first block without being able to alter or change the records in other words it’s a decentralized form of the currency that doesn’t rely on trust between parties for transactions to occur you can still find the very first block on the bitcoin blockchain today mined by the mysterious Satoshi Nakamoto in 2009 showing that Nakamoto was given a total of 50 bitcoins as a reward for mining the first block. This block is commonly referred to as the genesis block. Nakamoto had also set the supply limit for bitcoins as 21 million within the software code itself as of today. There are only two million bitcoins left to mine now admittedly all of this can seem very confusing at the start and it’s very difficult to explain all of this in a single article like we’re trying to do now.
But one question still remains how did bitcoin reach the price it’s at today could digital currency with albeit brilliant technology truly be worth more than 60 thousand dollars price is a matter of demand. So how did the demand ever reach this point in the first place in early 2009 after releasing their infamous white paper Nakamoto mined the genesis block setting into motion a series of events that would change its future forever. The early adopters of bitcoin included those from the cypherpunk movement and others who mined bitcoin just as a hobby until 2010 bitcoin was worth practically nothing yet that would soon change that year. During the month of may a man named Lazlo Honyats created a post on a bitcoin discussion forum offering to pay 10 000 bitcoins for two large pizzas two days later Laszlo reported that he had successfully traded his bitcoin for 25 dollars worth of pizza.
This was the very first recorded transaction in which bitcoin was used to purchase a tangible item and just like that the digital currency took its first big step in becoming recognized as having value the 22nd of may was officially dubbed bitcoin pizza day. By the end of 2010 bitcoin had gone from being worth nothing to 39 cents and the very first bitcoin exchange mount gox was set up making it easier for people to trade their bitcoins with regular currencies in 2011 bitcoin reached a price of one dollar.
Suddenly we began seeing the emergence of other cryptocurrencies using the very same blockchain technology that bitcoin uses these alternative cryptocurrencies otherwise known as altcoins aim to solve their own problems by making changes to the original bitcoin whilst bitcoin’s intentions are to be a digital currency. A cryptocurrency like ethereum is attempting to do something entirely different using blockchain technology both of which require their own research and looking into there are currently thousands of altcoins out there and some of which are Ponzi or pump and dump schemes that serve no use purpose bitcoin did however struggle in its early years from a poor reputation and multiple scandals. Its use of a private and a public key system allowed for a level of anonymity which made it perfect for criminals and illegal use purposes.
Silk Road was a notorious website on the dark web which engaged in the buying and selling of illegal substances with which bitcoins were used for transactions the website itself was a sophisticated endeavor that proved tough to crack it used the online currency bitcoins and operated in the so-called deep web because of this the association of bitcoin with black markets like silk road put a stain on its reputation that can still be felt today.
Another significant scandal during these years was the collapse of mount gox bitcoin’s first and biggest exchange which at one point handled up to 70 percent of all bitcoin transactions heard of an online currency exchange is known as mount gox. This website had been one of the largest online exchanges for the digital cryptocurrency known as bitcoins the site went offline amid allegations of major theft and carpals acknowledged today.
You know by December of that year 2018 bitcoin had fallen to just over 3200 and yet despite the crash bitcoin’s worth remained in the thousands and now only three years after the 2018 crash bitcoin is worth over 60 000 at the time of writing. What separates a retail investor from an institutional investor for one it’s money, a lot of money, It’s for that reason then that the recent institutional interest in bitcoin is what is fueling the current insanity that we see today. This morning from Paypal the company’s Venmo app will now allow its 70 million customers to buy hold and sell cryptocurrency now the rollout begins today and it’s going to be available to all customers in the next few weeks. Elon Musk does it again with a shock announcement and an immediate market response.
Tesla has put one and a half billion dollars into bitcoin and musk will accept bitcoin as payment and as the US federal reserve continues printing money in order to boost the economy under the current circumstances the fear of rising inflation grows stronger and stronger. You see the narrative around bitcoin has changed whereas in its initial white paper bitcoin was intended to be a currency more and more investors are looking at bitcoin as a store of value instead. And yet there are those who say that bitcoin is not worth its current price or those that think its price is being manipulated to a great extent the price of bitcoin is totally manipulated by a bunch of people in a bunch of ways.
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