Bitcoin enthusiasts commonly refer to a famous quote attributed to prominent international banker, Mayer Rothschild, who said: “Give me control of a nation’s money and I care not who makes its laws.” As a non-fiat currency, Bitcoin is one of the few forms of currency which does not rely on any central bank, or government. This bypassing of central banks has been one of the main appeals of Bitcoin to enthusiasts worldwide. At the same time, this factor has been one of the traditional banking industry’s major concerns about Bitcoin.
But, how does the Bitcoin system work, and how did it come about in the first place?
Bitcoin’s Mysterious Inventor
The identity of Bitcoin’s inventor is still unknown. In an anonymous chatroom, in 2008, a user named Satoshi Nakamoto uploaded a 9-page document, entitled “Bitcoin: A Peer-to-Peer Electronic Cash System.” The document proposed a new, and more convenient, method of digital payments.
To this day, this document has remained the blueprint of Bitcoin’s system. In March, 2014, Newsweek ran a piece trying to link a Japanese-American man named Dorian Prentice Satoshi Nakamoto to the founding of Bitcoin. After much media hype, holes in the story became clear, and the story was dropped.
How Are Bitcoins Made?
Bitcoins can be discovered by means of computers solving complex mathematical programs. The system is programmed that only 21 million Bitcoins can be “mined,” (i.e. come into existence). To date, 6 and a half million Bitcoins have been mined by computer engineering experts. The process of mining bitcoins is slow and steady.
Much like Gold, the value of a given Bitcoin is based on the value traders attribute to it, coupled with its scarcity.
How Much is A Bitcoin Worth?
The value of Bitcoin has been incredibly volatile since its very beginning. Originally valued by traders at less than $1, in 2013, its popularity began rising, along with its value.
As more people became interested in acquiring Bitcoins, demand overwhelmed supply. By April 2013, 1 Bitcoin was valued as high as $230 USD. The Bitcoin craze had begun.
Nonetheless, a number of hurdles stood in Bitcoins way. The first problem was regulation. Bitcoin exchanges were commonly being hacked, and thousands of Bitcoins were stolen from users. Because there were no centralized laws enforcing fair Bitcoin trade, confidence in the Bitcoin dropped.
The real turning point came in November 2013, when the US Senate held a meeting to discuss the pros and cons of virtual currencies. Within a month, the price shot up (and peaked) at $1230 per Bitcoin.
Trading Bitcoins With Binary Options
Those who bought Bitcoin at its peak are still regretting the drastic devaluation of the currency, while many are still hoping for a better way to trade Bitcoin.
With binary options trading, you can profit from Bitcoin’s fluctuation whether it goes up or down. By predicting the correct direction of Bitcoin, and choosing an expiry time, you can easily control how much you stand to gain or lose before every given trade.
So, where is Bitcoin headed next? Stay tuned to the news. The story of this virtual currency has just begun.
