The rise and rise of Bitcoin

Bitcoin
Japan ()

Who would have thought at the start of 2017 that Bitcoin would increase 20-fold? Since it became the first decentralised digital currency released as open source software in 2009, Bitcoin has become the cryptocurrency of the Internet. 

Is paper money really on the verge of disappearing as people become their own banks? And will we ever know the identity of the real Mr Bitcoin, the mysterious Satoshi Nakamoto? Nobody knows if he or she is a Japanese crypto hacker or an agent of Russia or China.

The peer-to-peer system has been the talking point of many, with confusion and uncertainty about how it can be integrated as an essential part of the financial system. Some people genuinely think it is the future, yet others are terrified it will destroy our economy. But if Bitcoin works – and we can cut out the middlemen – it could change the way our economy works, forever. 

Unlike traditional currencies such as Euros, bitcoins are issued and managed without any central authority, taking away any government, company, or bank in charge of it. This makes it more resistant to wild inflation and corrupt banks. 

Their official video explains the advantages of Bitcoin over other currencies:

The digital currency could provide a secure and much needed way of more easily spending and moving money, especially in developing countries where spending and moving money isn’t difficult or totally secure.

So how does it work? This video from The Guardian breaks it down:

Quite possibly the most integral part of the Bitcoin functionality is the blockchain which acts as a ledger for all Bitcoin transactions, operated by  miners’ who organise and secure transactions into the blockchain. Think of it as a traditional bought ledger that keeps a record of every currency transaction.

It’s shockingly uncontroversial and it allows total strangers to hold and exchange digital money in a completely transparent way – without having to trust each other or any central authority and without compromising privacy. It works in minutes and is estimated to save banks £20 million per year by 2020. To understand this, it is important to distinguish between money and cash.

“A blockchain is essentially just a record, or ledger, of digital events – one that’s ‘distributed’ or shared between many different parties. It can only be updated by consensus of a majority of the participants in the system,” says Mike Gault, the Founder and CEO of software security company Guardtime. “And, once entered, information can never be erased. The bitcoin blockchain contains a certain and verifiable record of every single bitcoin transaction ever made.”

Please note: We have mapped this to Japan, as we have no idea where to map it to. Satoshi Nakamoto is a pseudonym used by the unknown person or people who designed bitcoin.

Submitted by

Michelle Hardiman (18 December 2017)

Project leader

Satoshi Nakamoto, alleged originator of the Bitcoin concept

Creative Commons License

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