Bitcoin and Cryptocurrency
Economics is boring this is a lie. We've been told all our lives but accept it or not our life depends on it war poverty revolution they all hinge on economics which itself rests on one key concept the money the ultimate catalyst for the worst and the best of human endeavors like it or not money defines our social status it also compromises our morals sometimes some people spend their lives chasing these rectangular pieces of paper some are willing to fight even kill for it but are we headed towards the end of money as we know it will we have to burn our rupees dollars and euros transform every single penny we have into digital binaries or should I say to cryptocurrency is it the new goal, the future of money or is it gambling a recipe for financial disaster if these are questions you've been asking yourselves. I have a story to share hello and Welcome to gravitas plus I'mwhat the internet did for information digital currency is doing for money it is revolutionizing transactions and eliminating banking, not a week goes by when cryptocurrencies do not dominate the news there are record-breaking price surges every other the day your colleagues won't stop talking about it your friends want you to invest what do you weigh the pros and cons understand where you're putting your money and that's where the problem lies most of us do not understand money and it's handling it's a life skill we were not taught in school beyond basic computing.
Let's start with understanding two basic concepts Bitcoin and Cryptocurrency what do they mean here are some quick definitions.
It is the name of the best-known cryptocurrency like the euro is the name of one type of currency bitcoin is digital and decentralized it exists electronically it's a computer code only.
It is a medium of exchange for bitcoin just as notes and coins are for rupees and dollars crypto means data encryption it basically ensures the security of transactions now you may have heard about your messages being encrypted it means they're secure it's the same for crypto it's encrypted data but unlike debit and credit cards cryptocurrency has no physical counterpart.
We don't understand about money combined with everything we don't understand about technology now don't lose your head if you do not get it because most people don't and surveys have shown this only one out of ten people understand how cryptocurrencies work and one in three cryptocurrency investors themselves know little to nothing about it take bitcoin, for instance, no one even knows who created it has been in circulation since 2009 but the identity of its creator or creators remains a mystery to this day over the years many people have claimed to be or have been called Nakamoto but there's still, no clarity whether it's one person or a group of people no one knows that I have nothing to do with bitcoin nothing to do with developing I was just an engineer doing something else what Nakamoto did though was solving a potential flaw in digital banking double-spending now what's that let me explain through an example if a person buys a sandwich worth ten dollars.
For instance, they cannot spend that same ten dollar bill anywhere else but when the same amount is paid digitally some people can manipulate systems and spend the same ten dollars more than once, and that in simple words is double-spending to stop this from happening you have banks and credit card companies acting as middlemen. So they vouch for the transactions that you make and they prove that you've already paid for something at the same time, they take their own cut of the transactions you make enter bitcoin it solves both these fiddly problems like I said it is decentralized meaning there is no third party controlling it instead, it is regulated by its own community of users and all of them record all of their transactions at the same time any attempts to fool the bitcoin the community will ideally get noticed and the payment will get rejected, no single user or government or bank or credit card company can force a fee on your payment or control its flow plus bitcoin is said to be secure from the effects of currency debasement and inflation does sound perfect doesn't it well it isn't bitcoin is not without problems the transactions are irreversible once you've paid you've paid you will not get a penny back plus it's extremely volatile the value keeps fluctuating.
On the 14th of April, it was worth 63 000 us dollars one bitcoin.
On the 23rd of April, it sank below 50 000.
Why does this happen you see like everything else the price of bitcoin is driven by demand and supply when the demand increases the prices go up when people see the price going up they feel like cashing in so they try to sell their own bitcoin and this leads to more people wanting to sell but sometimes there are not enough buyers so they lower their price and on it goes like a roller coaster ride so fluctuation is problem number one the second problem has to do with security. The digital wallets containing bitcoin are stored in phones and computers and we all know how vulnerable these are two theft and hackers in 2016 a Los Angeles hospital ended up spending 17 000 us dollars on illegal transactions after hackers took control of its computers for more than a week so if you have a good amount of money invested in bitcoin. Create passwords that are difficult to guess also stop visiting those weird and suspicious websites the same rules apply to every other cryptocurrency.
This brings us to the question how many are there 4 000 plus there are more than 4 000 cryptocurrencies in the world why do so many of them exist because why not the key software to create crypto is open source which means anyone and everyone can create them so there's Litecoin, Namecoin, Peercoin, grid coin, ripple prime coin, order mazer coin, stellar, and this dogecoin a cryptocurrency that started as a meme it has now become mainstream in 2013 two software engineers used the image of a dog and made this cryptocurrency as a joke their aim was to make fun of how people would invest in anything and guess what people did just that on the 20th of April dogecoin's market capitalization surged to more than 50 billion dollars it ended up being worth more than ford and Marriott all thanks to dogecoin supporters
who used hashtags and social media posts to fuel its price.
Thank you guys for being with me till the end of the blog. See you in the next blog stay blessed.
JazakALLAH!
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