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Bitcoin 101

Emma Shaughnessy '20, Sports Editor

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Currency is crucial to human life. It allows people to pay for the necessary items they need to survive such as food and a roof over their heads, but it is also great for splurging every once and a while on a fancy dinner or a family vacation. Ever since the earliest civilizations, currency was a physical method of payment, but now, cryptocurrency is growing increasingly popular thanks to Bitcoin.

Bitcoin is a digital, worldwide payment system, as well as the only currency system that operates without a central bank or single administrator. The company was created in 2009 by someone with the alias Satoshi Nakamoto. Whether that title is a person’s name or a group of people remains unclear.

In order to get started with Bitcoin, one must either purchase Bitcoin with actual money, or receive it as payment. The cost of one Bitcoin is equivalent to about $10,000 USD, so people generally buy fractions of Bitcoins. Another method of gaining Bitcoins is mining. In order to mine Bitcoins, miners must run software on their computers to locate a key to unlock a padlock. When their computers successfully find the key, which on average takes over 1 billion tries, the miners are given $25 worth of Bitcoin.

Bitcoin is similar to gold in many ways. For instance, gold needs to be mined out of the ground, and Bitcoin can be mined digitally. Also, there is a limited supply of both products. In fact, there are only 21 million Bitcoins that can be mined in total, with about 12 million currently circulating. Once miners unlock every Bitcoin, the supply will be tapped out, unless Bitcoin changes its protocol to allow for a larger supply.

As cryptocurrency increases in popularity, many companies are starting to accept it a method of payment. Some of these businesses include Expedia Microsoft, Overstock, Lionsgate, and select Subway locations in Buenos Aires, Argentina.

Although there are still many unknown factors about Bitcoin, some people continue to use it in place of actual money. It is unclear for how much longer Bitcoin will exist, as there are only 9 million Bitcoin left to mine and its value is constantly changing. However, the payment system is continuing to expand as more companies are accepting it for purchases, so it is safe to say Bitcoin could just be the beginning of a cryptocurrency era.  

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Bitcoin 101