The use of a new and alternative way of exchanging items and services on the Internet has been around since 1998. Cryptocurrency, or fondly called digital currency, was established to provide an easier and faster means of transaction online without the use of physical money. Since its discovery, many people have invested in this market. Over the years, it has evolved into something more promising and full of potential in the industry.
Bitcoin: The Most Sought-After Cryptocurrency
Bitcoin, the most popular and apparently the most successful type of cryptocurrency, was created by a Japanese computer expert, Satoshi Nakamoto. His idea of using digital money to transact online attracted lots of investors and business-driven people. It was a way to secure financial funds and circulate money in a safe and controlled manner. This feature of Bitcoin paved its way to its success.
Since its successful launch, many companies have been trying to make a name for themselves. Few of them are known as Litecoin, Ripple, Peercoin, Namecoin, Mastercoin, and Quarkcoin. Some publications also created their own cryptocurrencies, like Artechnica and the local councils of UK such as Hull. The setback here is many cryptocurrencies died because nobody is using them. Most on the non-Bitcoin currencies are collectively known as alternative bitcoins or altcoins. For a currency to be successful, one has to have cash running around the network. Cash refers to the total amount of transactions and it has to have a virtual economy to run the operations.
How Bitcoins Operate
The Bitcoin program has a computed encryption function known as hash. A miner is a person who discovers blocks which can be found in the daily transactions made online. Coins will be rewarded to a miner who is able to compute a number of blocks under a specific threshold. This cycle happens every 10 minutes. Few years ago, Bitcoin mining was operated on computers with powerful graphics cards by standard PCs. As years passed by, the level of difficulty increases, thus, you need to employ a Bitcoin ASIC, a kind of computer chip that is specifically designed to mine blocks.
The Stakes Get High
The whopping prize favours those with super high-end computers that produce faster calculations. In 2014, there are about 12 million bitcoins produced and in circulation. The total number limit of bitcoin production is 21 million, and each year the number of released bitcoin is swiftly skyrocketing.
As the Bitcoin network gets bigger and reaches wider coverage, the hash calculations become more complex and complicated. In return, miners receive fewer bitcoins, forcing them to upgrade to more powerful and speedy machines. This cycle powers and fuels the financial transactions of Bitcoin network.
Many business tycoons and market investors have been using Blockchains to fund their investments. Big names such as Toyota Motor Corporation and JPMorgan Chase & Co use bitcoin as their currency. To sum this up, these procedures make Bitcoin a highly safe and secure currency mode with untraceable, easy and practical features.