October 26, 2021

BlogCoinz

Cryptocurrency and Technology

Coin of the Week: Bitcoin

Oh yeah! Lets talk about the OG and everyone’s favorite cryptocurrency – Bitcoin.

Bitcoin was created in 2009 by an unknown person or persons under the pseudonym Satoshi Nakamoto as a way to send money digitally with no middle man. Originally, it was designed as a peer to peer money system with the goal of security, low fees, easy attainability, and fast transactions. The price at the time? Basically nothing. By June 2010 it was worth about 8 cents a coin.

In the early days you could mine bitcoin with only your CPU. Mining is a way to created more bitcoin by solving complex algorithm that are designed to help move the network in a forward. Subsequently, miners also get a right to voice how they would like the network to move forward, similar to how open source program users can vote on major changes to a software. This has the consequence of allowing chains to split if half the miners want one thing implemented and the other half want another creating coins like Bitcoin Cash (Note Bitcoin Cash is a branch off of Bitcoin and though it shares the name it’s a separate currency with similar functionality).

Today, it is nearly impossible to mine with a CPU or even a GPU (for BTC at least) and it requires an application specific integrated circuit miner or ASIC miner. An ASIC is specifically designed to mine and to mine only and the better ones cost around 5k (though there are cheaper and more expensive options depending on your goals.) Typically how it works is pools of ASIC’s and other miners will gather their resources to solve these complex problems to unlock more bitcoin. Then they share the bounty depending on how many completed hashes they made. (A hash is the term used for each individual piece of the overall complex problem solved which hash rate is how quick your ASIC can solve them).

Lets fast forward to 2019, Bitcoin is still being mined but only by ASIC miners (for the most part). The price is no longer 8 cents but 6k. It is still a viable peer to peer system however fees have become greater and thus it is primarily used as a store of value. (Please note in most cases fees are still cheaper than using conventional methods to send money). Best of all, it spawned a revolution that is seeing innovation not seen since the .com days with coins used for privacy, contracts, or even DAPPS (decentralized applications).

At the end of the day Bitcoin has started a revolution and despite what people may want it is here to stay. Nothing is to big to fail but even if Bitcoin suddenly became useless (fat chance of that) it has spawned another tech revolution!