Everything You Need To Know About The Rise Of Bitcoin

The cryptocurrency known as bitcoin is really hot right now. Every day there are headlines about its value and whether it’s worth getting in on the action (or getting out). Some people have made tons of money using the cryptocurrency. So what exactly is bitcoin, how did it start, and is the bubble going to burst?

It Came On The Scene In 2009

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Bitcoin was the first decentralized cryptocurrency. A cryptocurrency is a system of money used online to make transactions. Bitcoin is secured and created through cryptography, or coding. The bitcoin system runs by using a blockchain, which is a ledger that notes the bitcoin balance of every single one of its holders. To make a Bitcoin transaction, an individual lets the system know it would like to transfer a specific amount from the ledger to another bitcoin owner. Transactions are grouped into a block. Once the transaction is confirmed to be legitimate, the ledger is amended and reveals the newest transactions.

Bitcoin Owners’ True Identities Are Kept Under Wraps Through Pseudonymity

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It is easy for a bitcoin owner to be anonymous to a certain degree — thus the currency is very appealing. When making a transaction online, you have no idea what the bitcoin owner’s name is or where they are located. They could be in South Africa, Spain, or Greenland. Bitcoin owners are identified by several characters, otherwise known as a digital address. This address is their pseudonym. People who use bitcoin can transfer balances to other bitcoin owners without revealing their real identity. This information is protected through a system known as a public key cryptography. If a bitcoin owner uses different addresses for each transaction, it can be nearly impossible to link their transactions to a single user.

Who Invented Bitcoin?

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The true identity of the individual who designed, created, and implemented bitcoin is unknown. This person developed the first blockchain database and was instrumental in its creation in 2009. This unknown person is referred to by the name Satoshi Nakamoto (but he’s probably not Japanese). Here’s what people think they know about Nakamoto. He reportedly lives in Japan and was born in 1973. It’s believed he is a cryptography and/or computer science expert who resides in either the United States or Europe. He writes English perfectly and his bitcoin software is not labeled in Japanese (thus he may not be from the Asian country).

The Bitcoin Creator Is Really, Really Rich

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Bitcoin reached a high of $19,771 on Dec. 18, 2017, and that acceleration in value made the creator of the cryptocurrency the 44th richest person in the world, according to Forbes. However, the identity of the creator is still a mystery even though it’s been eight years since bitcoin’s launch. There has been a lot of speculation over the years about who invented the cryptocurrency. Known by his pseudonym Satoshi Nakamoto, some believe cryptography student Michael Clear is the inventor. Others have pointed to Finnish game developer Vili Lehdonvirta. Still more speculate a trio identified by Fast Company are responsible for bitcoin.

This Guy Was A Bitcoin Imposter

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Some believed a businessman named Craig Steven Wright may have been the Bitcoin creator after his home in Sydney, Australia, was raided in 2015 by police due to an anomaly with his taxes. The publications Wired and Gizmodo uncovered several emails, blog posts, and leaked transcripts that suggested he was Nakamoto. At first, Wright kept mum on the subject. Then he claimed he was the creator of the cryptocurrency. However, he was unable to prove it. For example, he couldn’t cryptographically sign the first block of data that was generated while growing the cryptocurrency. If he was the actual bitcoin creator, he would have been able to perform this action.

Bitcoin Is The Major Currency On The “Dark Web”

Bitcoin Is The Major Currency On The “Dark Web”

The “dark web” is a hidden internet that requires special software, one of which is called Tor (The Onion Router). Tor was developed by the U.S. Navy and lets people search and browse the internet anonymously. Its services and websites can be accessed similarly to the regular web. Bitcoin has been a popular currency on the dark web ever since the marketplace known as the Silk Road launched in 2011. (The Silk Road enabled people to buy and sell illegal drugs). The dark web is also used for other illegal transactions, such as buying and selling firearms or getting items such as fake passports. There are no limits to what you can buy and sell. Use your imagination.

Bitcoin Made It Easier To Buy & Sell Illegal Goods

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The reason the dark web is so popular is because people are able to make transactions anonymously without the fear of getting caught. This is particularly important if the transactions are illegal. Researchers Kyle Soska and Nicolas Christin from Carnegie Mellon published a paper in 2015 in which they calculated that the Dark Web is responsible for $100 million in drug sales each year. Nearly every single one of these transactions was done using bitcoin. It’s difficult to track bitcoin transactions on the dark web due to services such as the “Bitcoin Laundry.” This service completely hides the transactions.

Fewer Criminals Are Currently Using Bitcoin For Illegal Transactions

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The Silk Road was shut down in 2013. Criminals who in the past used bitcoin for illegal transactions are now turning to other digital currencies that are harder to track. Intelligence agencies are able to track bitcoin funds to addresses that are provided by hackers. This allows them to apprehend criminals when they attempt to cash out through institutions such as banks. Thus, illegal transactions in bitcoin dropped from about 50 percent of total volume on the dark web in 2016 to about 20 percent in 2017. However, it’s important to note that overall bitcoin transactions have increased across the world.

You Can Purchase Music With Bitcoin

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In 2014, Mel B, who used to be a member of the Spice Girls, became the first musician to allow fans to purchase her Christmas single using bitcoin. She explained in a press release: “I love how new technology makes our lives easier, and to me that’s exciting. Bitcoin unites my fans around the world using one currency. They can just pay using bitcoins!” That same year, rapper 50 Cent offered his album “Animal Ambition” in exchange for bitcoin. He was one of the first rappers to allow it. People would use the payment processor BitPay to buy the album on his Shopify store.

One Japanese Company Plans On Paying Part Of Its Employees Salaries In Bitcoin

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GMO Internet, a Japanese company, will pay employees a portion of their salaries (if they so choose) in bitcoin, starting in February 2018. The company has more than 4,000 employees, who will each be eligible to receive $890 a month in the cryptocurrency. Company spokesman Harumi Ishii said GMO is looking into different ways to use bitcoin. By giving some of their employees bitcoin as part of their salary, it will enable them to see how it can be used in the real world. He noted: “We hope to improve our own literacy of virtual currency by actually using it.”

The Price Of Bitcoin Skyrocketed In 2017

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Bitcoin and other cryptocurrencies such as ethereum have skyrocketed in value over the last year. The price of bitcoin alone has increased by over 700 percent. Those who started investing early on have reaped the benefits and made tons of money. But many crypto investors don’t like to disclose their involvement in this type of investment because cryptocurrencies are still linked to illegal activities. These individuals don’t want to be associated with something that many still view as objectionable. As a result, there are a lot more people who have made money through bitcoin than the general public is aware of.

This Teen Got Rich Off Of Bitcoin Using Money From His Bar Mitzvah

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In 2012, Eddy Zillan received $5,000 from his parents for his bar mitzvah. The money was to be used for investment. Instead of stocks, Zillan opted to buy cryptocurrencies, including bitcoin. He contributed an additional $7,000 from working at a summer job. His $12,000 investment turned into $500,000 in five years. Zillan is just 18 years old. His aim is to be a dentist, and he’ll be going to college next year. But he has a backup plan. He created a company that offers information on cryptocurrencies. His father, 46, told Yahoo Finance: “Hopefully he’ll be a multimillionaire by the time he’s my age.”

These Twins Are Bitcoin Billionaires

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You may have heard of Cameron and Tyler Winklevoss. They are most known for suing Facebook’s Mark Zuckerberg, claiming he stole their idea for the social media website. After winning $65 million in a lawsuit against Facebook, they invested $11 million in Bitcoin in 2013. Their strategy paid off in a big way. They took ownership of a large chunk of the bitcoin portfolio, and they became billionaires after the currency started selling for over $11,000 in early December 2017. When they first bought into the currency, one coin traded for about $120. That’s a 10,000-percent difference.

This Guy Bought A Lamborghini Huracan Using Bitcoin

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In 2011, Peter Saddington of Atlanta bought some bitcoin at $3 a coin. His investment has jumped a whopping 250,000 percent. The 35-year-old has a bachelor’s degree in computer science and three master’s degrees. He runs a cryptocurrency social network called TheBitcoin.pub. He recently used his bitcoin investments to purchase a 2015 Lamborghini Huracán, which is worth about $238,000. Saddington was able to make the purchase using bitcoin. He was only charged $7.50 in transaction fees. He told Yahoo Finance: “Buying the Lambo with bitcoin is proof it can be used for real transactions, buying really cool stuff. It’s not only used by criminals.”

Celebrities Are Bringing Cryptocurrencies To The Masses

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With bitcoin generating so much interest, it’s no surprise that celebrities are looking for ways to make a profit. Some of them are using their celebrity status to generate interest in cryptocurrency as well as make some dough. Wu-Tang Clan’s Ghostface Killah, real name Dennis Coles, has co-founded a cryptocurrency firm named Cream Capital. The group is trying to raise $30 million to develop a blockchain-based ATM network. This technology will be used to help people use popular cryptocurrencies, such as bitcoin and ethereum. The company says Coles “serves as a vessel to increase brand awareness surrounding Cream Capital and cryptocurrencies.”

People Are Doing Crazy Things To Buy Bitcoin

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Bitcoin has created a bit of a fervor among all sorts of people. There are those who don’t have a lot of money on hand and resort to borrowing cash in order to invest in the cryptocurrency. This can be a dangerous game. Joseph Borg, president of the North American Securities Administrators Association, told CNBC: “We’ve seen mortgages being taken out to buy bitcoin. … People do credit cards, equity lines.” He added, “This is not something a guy who’s making $100,000 a year, who’s got a mortgage and two kids in college ought to be invested in.”

Is Bitcoin A Bubble Waiting To Burst?

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It’s unclear what the immediate future of bitcoin is. The value of the cryptocurrency continued to rise through December 2017, and that has caught the attention of many newbies who want to invest in the world’s first cryptocurrency. As a result, some believe this interest signals the end of bitcoin. But others believe that it is actually undervalued. People are predicting both good and bad things about the cryptocurrency. According to a Wall Street Journal survey, 96 percent of economists think bitcoin is experiencing a speculative bubble. It’s just a matter of time for the bubble to burst.

British Singer Lily Allen Snubbed Bitcoin & Missed Out On A Lot Of Money

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Several years ago, British singer Lily Allen was offered quite a bit of bitcoin as payment for streaming a live gig. At the time, the cryptocurrency may not have been worth very much. The pop star opted not to make the exchange, and she later regretted it in a big way. She tweeted in 2014: “About 5 years ago someone asked me to stream a gig live on second life for hundreds of thousands of bitcoins, “as if” I said. #idiot #idiot.” If, for example, she was offered 250,000 in bitcoins, it would be worth $3.2 billion today.

Is Bitcoin A “Gold-Like” Asset?

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It’s true that you have to take some chances in order to make the big bucks. Tyler Winklevoss and his brother were two of those people. Tyler told CNNMoney in 2015: “If Bitcoin is a better gold or seen as a type of gold-like asset, then it could be in the trillions on a market cap. We do feel those are very real possibilities.” The twins have reportedly held on to every single one of their bitcoins. They opted not to sell any of them. There are very few people who own the cryptocurrency portfolios that are worth more than $1 billion like they are.

Cameron Winklevoss Predicts 10-20 Times Appreciation In Bitcoin

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Cameron Winklevoss believes the value of Bitcoin will continue to increase in the long term. During an interview with CNBC he noted: “We’ve always felt that Bitcoin, given its properties, is gold 2.0 — it disrupts gold. Gold is scarce, Bitcoin is actually fixed. Bitcoin is way more portable and way more divisible. At a $300 bln market cap, it’s certainly seen a lot of price appreciation, but gold is at $6 tln and if Bitcoin disrupting gold is true and it plays out … then you can see 10 to 20 times appreciation because there is a significant delta still.”