Four years ago a new word appeared in the Oxford Dictionary: bitcoin. It was a tacit acknowledgement that cryptocurrency had become an integral part of life.
Electronic coins have spread around the world, but attitudes toward them remain controversial to this day. Enthusiastic statements by experts about the prospects turn into extremely cautious answers from official bodies. Anonymous payments without intermediaries and external oversight – really, what can the authorities like here?
– What is cryptocurrency? –
Cryptocurrency is electronic money issued by a blockchain algorithm. This is a giant chain consisting of special blocks, pieces of code. Network participants can store this chain on their computers. The blockchain keeps track of all actions – transactions, generation of new blocks – and automatically saves the information. It is not possible to roll back an action taken or fake a record.
Cryptocurrencies are just one of the many uses of blockchain technology. And bitcoin is the most common of the cryptocurrencies.
In fact, there are a great many cryptocurrencies: for example, ethereum, litecoin, dash, peercoin. There is even dogecoin, named after the viral Internet meme with a dog. Currencies differ in “mining” algorithms, speed, security and privacy.
Which one to choose? The answer depends on why you want to work with cryptocurrency. If you are a freelancer, proven bitcoin is a good choice for fast and secure payments with a foreign customer. It is also the best tool for medium- and long-term investments.
– Bitcoin as an object of investment –
The first official bitcoin-dollar exchange rate was published on the exchange on October 5, 2009. At that time (hold on tight) 1309 BTC were given for one dollar. A year and a half later, on February 9, 2011, the bitcoin-dollar exchange rate was 1:1.
As of this writing, 1 bitcoin is trading between 815 and 830 USD. By comparison, less than a year ago, on February 7, 2016, 1 bitcoin was worth 387.71 USD. Experts agree that demand will not decrease, therefore, the price will remain the same or increase. The Bitcoin community is confident that by the end of 2017, the value of 1BTC will exceed $1500.
However, many emphasize the volatility of the currency, which makes any forecasts meaningless. In addition, the further fate of cryptocurrencies (in particular, bitcoin, as the most popular “representative”) is influenced by legality. If this currency is outlawed worldwide, its value will skyrocket.