Bitcoin is one of the most exciting innovations of the last few decades and genuinely brings us one step closer to living in the ‘science fiction’ world that we have been promised for so long.
For the uninitiated, Bitcoin is a type of ‘decentralized’ currency, meaning that it isn’t owned by a government or nation. In fact, Bitcoin is not beholden to anything physical. Whereas dollars, the Euro and GBP are ultimately reliant on the value of gold; Bitcoin exists all by itself in a vacuum.
Almost every science fiction story involves characters buying things with ‘credits’ of some kind – and with Bitcoin that reality is upon us! You can even find pubs that will let you pay for a pint with Bitcoin, while sites like Binary Uno let you trade on the stock market using it. The bottom line? It’s here to stay!
How It Works
Bitcoin is super exciting and comes with a ton of incredible advantages. Despite this though, most people you meet on the street are only vaguely aware of it and what it is.
People find Bitcoin daunting because they’re not sure what the term means or how it can work. What is Bitcoin and how can you get value out of thin-air?
The best way to think about Bitcoin is as a ledger that is shared by a lot of different users. Each time you buy something or get paid using Bitcoin, the transaction is recorded onto that ledger. The only problem is that the ledger is encrypted by an incredibly difficult-to-crack code. To make the transaction, the code needs to be ‘solved’ using software that can work out the equations.
Computers then compete in order to solve those equations and thereby confirm the transaction. And the computer that solves the algorithm earns more bitcoins as a result. This is called ‘bitcoin mining’ and it means that you can leave your computer running and slowly gain income from it – without doing anything.
Why You Need to Get Involved
This should be enough reason right away to get involved. Bitcoin offers a genuine opportunity to print money. There are systems in place to ensure that Bitcoin never loses its value and there’s a limit to how much can be mined. But if you have the right system in place, you can generate income out of thin air and then use it to invest and make real money with.
In the future, Bitcoin represents even more exciting possibilities. For example, Bitcoin could allow for the emergence of ‘algobusinesses’. These would be algorithms that invest, trade and mine bitcoins in order to generate huge amounts of cash all on their own. You can’t write an algorithm that accesses your bank account, but there’s nothing to stop you from writing a program that spends Bitcoin.
There are also some real implications regarding the future of democracy. With a truly decentralized currency, we could eventually move to a decentralized economy. At this point, we might be able to entirely rethink the structure of our governments and the way that money is distributed.
This is an incredibly exciting opportunity and there’s every reason to get involved.