Short Story: The truth About Bitcoin

With bitcoin prices surging more than 16-fold over the past year, and many more investors scrambling to get in on the action, many market watchers expected that the debut of bitcoin futures would generate the same heat. For starters, they allow investors to buy and sell on a regulated, secure exchange with transparent prices and strong track records. And just a few short weeks later, on Dec. 11, bitcoin futures trading opened for business, with investors making bets on the future price of the controversial cryptocurrency alongside conventional commodities like oil, corn and pork bellies. Bitcoin is a decentralized digital currency that you can buy, sell and exchange directly, without an intermediary like a bank. For instance, if you’re going to purchase and trade via Coinbase, link your bank account or credit card details to your Coinbase account, and then choose this option as the method to pay for bitcoins.

A person(s) going by the name Satoshi Nakamoto proposed the bitcoin concept back in 2008 in a paper distributed on a cryptography mailing list. Bitcoin, a cryptocurrency, was started in 2009 by a group of unknown persons under the name Satoshi Nakamoto. Bitcoin was first released in 2009 by anonymous coders under the pseudonym Satoshi Nakamoto. First is Bitcoin’s architecture. This is not the first time a cryptocurrency exchange has been charged by a regulator. A would-be fraudster wishes to spend some bitcoins a second time. Bitcoin’s price over time has experienced big price swings, going as low as $5,165 and as high as $28,990 in 2020 alone. That’s why so many different industries are talking about blockchain technology, with some going so far as to suggest it’s the next incarnation of the web. But why participate at all? This sounds good as you need not go through the hurdles of buying equipment, consider the cooling and storing factors. James: Not exactly. When signing up users never agreed to have their contact details given to the issuer, and most of the issuers need a bitcoin address for them to payout to. The details are a little technical, but the basic concept isn’t.

There are countless articles on the subject, ranging from how blockchain will transform the entertainment industry to how blockchain can reassure you that the fish you are about to enjoy for dinner is from a sustainable source. Poof, there goes your bitcoin. With futures, you can “short” the underlying commodity, meaning that you’ll make money if the price of bitcoin goes down over a week or month or more, depending on the length of the contract. There was a four-decade period from the 1930’s to the 1970’s where keeping money in the bank or in sovereign bonds didn’t keep up with inflation, i.e. the orange bars were net negative. Their computers would work on tough math problems to verify transactions, negating the need for a centralized bank or financial institution to perform that role. Blockchain technology relies upon a shared record of transactions across a peer-to-peer network of computers. Nakamoto proposed that whichever computer (or system of computers) provided the correct answer to verify a block of transactions would receive an award of bitcoins. If multiple computers are offering up block verification solutions, the system as a whole will go with whichever chain of blocks is the longest. In this way, new bitcoins entered circulation, and people had a reason to put their computers to work.

Once a block joins the chain, it’s locked in across the network, with all the computers connected to the network able to see the block. Every computer in the network has access to this shared record and uses special software to participate in the process. If more than one computer comes up with the correct solution to verify a block of transactions, the verified blocks are in a sort of limbo until one of those machines or systems has a solution for the next block in the series. Bitcoin’s design allows for irreversible transactions, a prescribed path of money creation over time, and a public transaction history. The more users dedicated processing power to verify transactions, the harder the problems would become. The problems’ difficulty would depend upon the amount of computational power in the system. These blocks stretch back all the way to the earliest transactions in the system in an unbroken chain.