Getting our third Niki done before Summer comes to a close next week. Honestly can’t wait to be done and over with only because packing everything within a course of six weeks drives everyone crazy. I’m not saying it can’t be done. Well obvious it’s been done before but I’m sure even Elliot is feeling exhausted haha. Anyways back to our Niki, we’re going to be getting one done on Bitcoins which we as a team found to be an interesting topic.
I, personally as someone who believes in investing and earning passive incomes from investments liked to do one on bitcoins because I’ve heard about the hype of it for awhile now but don’t quite understand what it’s all about still, therefore getting this done could help me in understanding and perhaps start trading with bitcoins.
As a group we decided to do a Bitcoins for dummies guide and I am basically asked to give an introduction to what it is about and understanding it a little better.
Bitcoin was invented as a peer-to-peer system for online payments that does not require a trusted central authority. Since its inception in 2008, Bitcoin has grown into a currency, an investment vehicle, and a community. In this guide I hope to explain what Bitcoin is and how it works as well as describe how you can use it to improve your life.
Bitcoins are created out of thin-air through an open-source computer mining system similar to a lottery, yielding a commodity like gold.
Taken from an excerpt on a website they explained that :
“Lottery” meaning that your computer is basically trying to decipher a 64-byte number before anyone else on the mining network does. Each time your computer gets the 64-byte string correct before anyone else, a new block is created and 25 BTC (currently) is awarded to the miner or pool (group of miners). But this isn’t a normal lottery. This lottery is millions of times more difficult than a normal lottery, thus why miners spend a lot capital on new hardware for mining. Therefore, the faster your system can mine the higher probability you will be rewarded.
“Gold” meaning only 21,000,000 Bitcoins will ever be created just as only X amount of gold will ever be discovered on Earth. Thus, this form of payment tends to see an opposite affect of that which you are used to. Bitcoins become worth more as time goes on (finite supply) vs. traditional currencies today which lose more value as time goes on (infinite supply; central banks can print money at their discretion, and they do).
So for all you smart kids out there, would it make more sense to invest in a currency that is finite like Bitcoin, or infinite like the US dollar?
I believe that by after comparing bitcoin to gold, it became so much clearer to me. People are investing in Bitcoins because it is like gold, or more accurately, the gold of the Internet. As long as people trust that this currency has value, people will continue to invest in Bitcoin. Bitcoin is open-source software, so it has no central control with corrupt bankers and politicians, just really smart people working for free to keeping it running!
Given all the problems we see in world economies, we are rapidly beginning to lose faith in conventional legal tender. Governments have demonstrated that they can seize your bank-accessible assets if needed. With Bitcoin, this is not possible as no one can have access to your funds. Your Bitcoin wallet is essentially your very own bank. It’s similar to the idea of people stuffing cash into their mattresses, except this is a lot more profitable and accessible. People will perhaps one day refer to this era as the gold rush of the 21st century.