Bitcoin is based on the idea that money can be any object or any type of record that is accepted as payment for goods or services or repayment of debts in a country or socio-economic group. Bitcoin uses cryptography (or mathematical equations) to control the creation of and transfer money. It does not rely on central banking authorities or governments. Anybody can make payments via any device, whether it’s a laptop, smart phone or tablet.
Intermediary
All of this is possible without the need to have a financial institution act as an intermediary, or record agent. Bitcoin was created in 2009 by Satoshi Nakamoto, a student at MIT. It is a digital currency that was made open-source software. It is unclear whether Satoshi is a real person or a group of people using a pseudonym. Bitcoins are created by a process called mining. This involves the use of specialized computer hardware to solve complex mathematic equations. In return, they are rewarded with a block bitcoin.
The current block reward is 25 bitcoins. This takes approximately 10 minutes. The 2017 block reward will be reduced by half to 12.5 bitcoins. This amount will be increased approximately every four years. There will be approximately 21 million bitcoins by 2140. This week has seen a lot of activity, with many business owners getting on board with Bitcoin.
Bitcoin
It is appearing everywhere, from small businesses in New Orleans to the Sacramento Kings of NBA accepting Bitcoin for ticket sales, team paraphernalia, and casinos in Las Vegas. Chris Dixon, a Venture Capitalist, believes that Bitcoin could reach $100,000 if it becomes the main means of ecommerce ( Wired). According to a CEO of a major online retailer, “Other retailers won’t want to miss out on the Bitcoin market growing by 30% per month.”
The same retailer saw a 5% rise in sales the day it began accepting Bitcoin. Zynga Games, the largest online gaming company, was responsible for Farmville and Castleville. They also started accepting Bitcoin for in-game financial transactions. After the five Big Banks refused to accept money from marijuana growers and dispensaries, Colorado’s legal marijuana industry turned to Bitcoin ( ZeroHedge). The IRS recently launched a campaign to allow taxes to be paid in Bitcoin.
Bitcoin ATMs
These have been popping up in many cities, including Ottawa, Vancouver, and a Bratislava Slovakia shopping center. The New York City Bitcoin ATM has been placed on hold until a public hearing under New York State Department of Financial Services can take place. Bitcoin traded at $950 on Mt. The 50-day moving average has been supporting the Gox exchange for the last two weeks, indicating that Bitcoin is still firmly bullish.
Many analysts believed that the regulatory news from China, India, Russia would cause Bitcoin’s bubble to burst. Michael Robinson, a market analyst with more than 30 years experience, believes that most analysts are wrong. He believes that Bitcoin is a very healthy market and should continue to grow in value, based on the strong correction seen in December.