Bitcoin – unless you have been living under a rock, you have no doubt heard something about this cryptocurrency’s meteoric rise in value, and the spectacular crash just recently when it lost two-thirds of its value in the span of a week.
It’s a frightening turn of events for investors, but it is not the first time the cryptocurrency has dropped. The nature of cryptocurrencies means that their value is always subject to volatile fluctuations.
There is no government controlling the value of Bitcoin, and so it’s value is completely market-driven. It’s part of what makes it so attractive to investors – you could make a lot of money with Bitcoin.
Aside from its investment value, though, what can you actually do with bitcoins? It was originally developed as a way to see if true peer to peer transactions were possible. That means faster transactions and no involvement from banks or other third parties.
The range of people willing to accept them as payment is growing every day.
Want to know a fun fact? One of the first purchases made with Bitcoin in the “real world” was for pizza. That was back in 2010, and the two pizzas cost 10,000 bitcoins.
10,000 bitcoins today would be worth around $84,780,550 even with the recent massive drop in price.
Of course, the fluctuating price of the cryptocurrency is only part of the reason that it is so interesting. What makes it even more important is the underlying blockchain technology.
It has completely changed the way that we view online security by making use of a distributed ledger. The information is spread across a computer network, instead of being stored on a single file server. Contrary to what we have been taught about internet security, this actually makes the information more secure.
Is Bitcoin finished? Not by a long shot.
The next few years will prove very interesting for those monitoring the progress of world’s first true cryptocurrency.