Bitcoin: the leading cryptocurrency
by: Ximena Peinado
The world got to know about a new way of monetary exchange in 2017 when a certain coin that was worth in January a thousand dollars, grew to an astonishing 200 per cent in december of that same year. This is what we like to call the Bitcoin ‘Boom’.
Bitcoin is an electronic cryptocurrency that was created in 2009 by Satoshi Nakamoto. Although its first formal transaction was made at the beginning of the year between the founder and an interested client, it was until 2010 when the first official exchange within a third party was made in Florida. The first thing that was bought with this coin? Pizzas.
Nonetheless, its exponential growth began in 2013, when it began the first quarter of the year with a worth of 13.50 dollars and by November it was already valued at a $1,075 dollars, due to its increasing usage in China. Today, each Bitcoin has a price of $10, 414 dollars.
This virtual coin, as many as its competitors, is independent and decentralized, which means that it is not controlled and/or influenced by any company, Estate, bank, or financial institution. This is an intangible coin that was made with the sole purpose of using it on the internet.
One of the most attractive characteristics of this type of currency is that, since it is encrypted, the owner can track the record of the coin’s historical transactions. This technology is called ‘block chain’ and it is the one in charge to register the date and the owner of each transaction made.
These transactions are in groups called ‘blocks’ that are verified periodically by miners. But these miners are not the ones we usually think of. The Bitcoin miners are people who receive an incentive in exchange to revise and verify each of the transactions. They do so by solving and working with complicated equations on the computer. With each block that is verified, 12.5 Bitcoins are added to the network.
You have probably heard that Bitcoin has a limit of 21 million coins, and this is why mining causes confusion. The thing is, that right now there are only around 18 million coins in circulation. This number changes approximately every ten minutes, due to that same mining. This means that in the next years it won’t be possible for people to mine anymore, since it will reach its limit. According to the multiple bank institution, BBVA, it is expected that Bitcoin will get to this point in 2041.
To make use of this currency, it is necessary for the user to download a virtual wallet on his/her computer or cell phone to send or receive electronic money, such as Mycelium, Bread or Bitcoin Wallet. All transactions are streamed to the network and generally take around 10-20 minutes to get confirmed and verified through the mining process. One of the disadvantages of this cryptocurrency compared to others such as Ripple XRP or Ethereum, is that its transactions per second are lower. Bitcoin can only do 7 transactions per second while its competitors handle transactions of up to 1,500 or 2,800 (Ripple and EOS) per second.
Its price is governed by the law of supply and demand, which makes it much more attractive for international trade. However, this same characteristic causes this currency to fluctuate in price drastically from day to day: for better, or for worse. For example, on February 8, 2019, it was worth $ 3,652, while four months later, in July, it was worth $ 11,248.
Bitcoin may not have its own platform or it may be the cryptocurrency with the fastest transactions, however the fact that it is the best known means that it is consequently the one with the largest number of users willing to accept that type of transaction.
Keep learning with PR1ME Capital
We already talked about Ether ( Ethereum) that gives us the possibility to leave instructions on how you want a certain amount to move periodically instantly.
In addition to telling you about the RIPPLE XRP cryptocurrency , known as the banks’ cryptocurrency , which unlike others, is centralized, objectionable and has its own RPCA algorithm (Ripple protocol consensus algorithm).
We learned that Litecoin provides faster transaction confirmation times without the need for a software modification.
Not forgetting Dogecoin , the friendly, socially responsible cryptocurrency that has the largest community in the field. Named after the world’s most expensive meme (‘Doge’) featuring a Shiba Inu dog – now the new coin mascot.
What will we talk about next week? Don’t miss the next content from PR1ME Capital .