The Creation And Acquisition Of Bitcoins Essay

The Creation And Acquisition Of Bitcoins Essay

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As technology continues to develop at a rapid pace, many aspects of our lives are being transferred to the digital world. The internet has changed the lives of many, giving them a new way to communicate, learn, shop, and more recently, make online transactions without physical cash, checks or credit cards. In 2009, the world of digital currency was altered forever when Satoshi Nakamoto introduced bitcoin, a crypto-currency. It has shown an immense growth in popularity within just six years, offering consumers less fees, more safety, and no physical currency to keep track of.
Many people have been trying hard to get their hands on bitcoins while their prices are still rising. The creation and acquisition of bitcoins is a complex and unique one. The most common way to garner bitcoins is by a process called “mining”, in which users solve complex mathematical proofs to complete bitcoin transactions. When someone uses bitcoin to pay for something, the miners are the ones to process these transactions, and the bitcoins are seen as a form of payment for their service. Mining can be done by just about anyone, but calls for very expensive investment in particular software and computers that solve these proofs. If you don’t have the technology for mining, there are also bitcoin exchanges where you can use your own money to purchase bitcoins, or you could acquire them in a transaction when you sell goods for bitcoins (“Frequently Asked Questions.”).
Bitcoin is very different from any other form of e-money. Many online shoppers have heard of PayPal, which is the most popular form of e-money. Unlike PayPal, which is linked to credit cards or bank accounts, bitcoin is its own unique form of currency. Bitcoin is also decentralized, meaning the...

... middle of paper ...

... anonymity makes it difficult to regulate (Pagliery).
Personally, I have very mixed feelings about the future of bitcoin. I do believe that technology is taking over and more people are moving online, causing online businesses to flourish. However, with the volatility of bitcoin, I don’t think it will sustain its popularity. When the Chinese government stated that they were going to outlaw bitcoins, their price dropped by one third within two hours (M.S.). The price of bitcoin is unbelievably volatile, and one crash can send the entire system crashing down at any moment. In addition to its unreliability, with apps such as Apple Pay, Google Wallet and LevelUp arising, bitcoin has garnered itself some competition which happens to be less risky. I believe bitcoin may be used as an investment in the future, but I don’t think it will become a big threat to the economy.

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