Bitcoin is a
so-called cryptocurrency created back in 2009 by an anonymous man that goes by
the name of Satoshi Nakamoto. The currency is created through a process called
“mining” where powerful computers compete to generate “hashes”. Any bitcoin
miner that successfully creates a hash gets a reward of 25 bitcoins, however
there can only ever be 21 million bitcoins in existence. This means the
currency is somewhat safe, but there’s more to it than that.
Can you survive on bitcoin? Well, many people have tried it.
One notable person is Jose Pagliery, a CNN correspondent who tried to survive a
day on bitcoin, and documented his experiences in a YouTube video. He had many
issues throughout the day, including paying for his lunch, getting to work, and
even acquiring bitcoins in the first place. He found that making usually easy
transactions was difficult, however he did manage it in the end, even if it did
involve taking a limo to work. This tells us that at this point, it is still an
emerging technology, and that the general populous has not caught on to what a
success bitcoin could be. But it could also be a warning, that if you decide to
rely on bitcoin altogether, it could show you the real consequences of using them.
More and more places, especially online shopping outlets have decided to adopt
bitcoin as a method of payment, but big online retailers such as Amazon are
refusing to accept it, meaning that it might struggle to catch on, and society
as a whole may never use it as an alternative to normal currency.
There are countless stories of people who became million,
even billionaires thanks to bitcoin. For example, if you were to have bought
one bitcoin back in 2012, it would have cost around £4.50, and if you were to
sell your one bitcoin now, you would earn around £11,000. That’s almost a 24,000%
increase in profits, so it’s easy to see why many people have become
millionaires. However, many of these self-made bitcoin millionaires are
advising people against buying bitcoin, as their value already skyrocketed. Grant
Sabatier, one of these bitcoin millionaires advises against investing in
bitcoin because the price can fluctuate massively, and it isn’t worth losing
all your money by accident. The cryptocurrency can fluctuate massive amounts in
very short spaces of time, sometimes the trading of bitcoins can be very
lucrative, and at other times can be disastrous.
There are as many failures with bitcoin as there are success
stories, one example of a failure is the story is James Howells, an IT worker
living in Wales, who mined 7,500 bitcoins on his laptop in 2009, the value of
those today would be a staggering $127 million. However, he stopped mining a
few years later, and decided to take apart his laptop and sell the parts
separately. He did keep the hard drive, just in case the value of bitcoin went
up, as it did, however he accidentally threw it away and is in landfill.
Newport City Council, his local authority, would not conduct a search for it as
it had been in the landfill for four years, and would be a costly process. This
is an example of how unlucky the consequences of computing can be.
More and more transactions in bitcoin requires more mining to
be done, and miners are forever installing powerful computers to solve ever
harder maths problems, a way in which the supply of bitcoin is limited. However,
these power-hungry computers are using up more and more electricity, and
according to digiconomist.net, a single bitcoin transaction uses up as much
energy as nine houses in the US use in a day. And with around 350,000 bitcoin
transactions a day, this amounts to the energy usage of 3.15 million American
households, or 0.17% of the world’s electricity usage. This creates a genuine
issue surrounding the sustainability of bitcoin, as it uses up so much
computing power, and as there are an increasing number of transactions, this is
an issue that needs serious thought, especially considering climate change is
still an issue, is it worth using bitcoin?
The future of bitcoin is unpredictable, yet there is almost
certainly going to be some sort of crash in the market, and we are likely to
see many people lose all their money because of this technological phenomenon.
People have been borrowing money just to make money from bitcoin, yet for many
people it is simply too late for them to invest, and they could see all their
savings wiped out. For the everyday user of bitcoin, who are the minority,
bitcoin ATMs have been appearing in sizeable cities around the globe, which
allows them to take money from their native currency and transfer it to
bitcoin, and put it in their “bitcoin wallet”. Throughout the next few years,
it is likely that we will see more of these machines in cities and towns.
The legality of bitcoin has been discussed ever since its
creation, and even more so now the popularity of the cryptocurrency has boomed.
Many international governments remain sceptical of bitcoin, however in many
countries it is perfectly legal, including the EU, the USA and Canada, and even
China. However, users of bitcoin in Bangladesh may be jailed, due to the country’s
strict laws against money laundering. There are also cultural issues surrounding
bitcoin – as technologies such as this become widespread, and new ways to pay
such as contactless and mobile payments are becoming prevalent, is there any
need for cash? Even market traders can accept bitcoin, since it costs all but
nothing to start accepting payments.
Bitcoin was first developed as an alternative to normal
money, with no central government, no banks, and no single person in charge of
it all. The openness of bitcoin has allowed it to flourish, but has also made
it susceptible to hackers, and many governments around the world have expressed
their disapproval of bitcoin. To most people, bitcoin is a non-issue, as it
most likely won’t affect them, and they will probably continue to use normal
currencies. Many physical retailers will never accept them, due to the
awkwardness of accepting payment, using a QR code on the payee’s mobile device,
and many online retailers will likely never accept them due to security issues,
and shoppers don’t want to risk the value of the bitcoins they have going up or
down, using a real currency carries much less risk. Since bitcoin hasn’t caught
on with most people, I don’t think it is worth buying bitcoin and using it to
pay for everyday items, but in the next few decades, I can see it being a
useful alternative to normal currency, thanks to its open source nature, and
the fact that it is increasingly becoming easier to get hold of.