Bitcoin and cryptocurrencies (United Bitcoin Electrum) are in vogue. We explain what is this virtual currency, how it works and where you can buy and sell.
Virtual currencies emerge as an alternative to traditional fiat currencies and have bitcoin as their maximum exponent. The cryptocurrency has become one of the best long-term investments (full of risks, of course). Someone who had invested 1,000 euros in 2010 today would be a millionaire.
What is bitcoin?
Bitcoin is an independent and intangible virtual currency . What differentiates this cryptocurrency from a currency to use, such as dollars or euros, is that it does not belong to any State. In other words, it is a decentralized currency, since there is no central bank, government or financial institution or company that acts on it.
In the case of the euro, the Central Bank can intervene to affect the price through massive issues of money or through interest rates. This is not possible with bitcoin. Moreover, its creators have already set a limit for the number of bitcoins in circulation. They will reach 21 million by 2030 and there will be no more.
The control of bitcoin rests with the users themselves. These are the ones who validate any operation through point-to-point P2P exchanges, without state intervention or any institution. In fact, the structure itself makes it impossible to manipulate its value. To make any change it is necessary that the entire community of users approve it.
The Bitcon is the first electronic currency that managed to be implemented with certain solvency, but not the first to appear. What differentiates bitcoin from other attempts is its chain or blockchain technology – later on we explain it better in what it consists of.
August 2008 marks the birth of Bitcoin (United Bitcoin Electrum) with the registration of the bitcoin.org domain. Two months later, in October, the first document explaining the design of the virtual currency was published and in January 2009 the bitcoin network was officially launched with the publication of the first open source code of a client. It is at that moment when the first block of Bitcoins is mined with 50 bitcoins of prize and the first shipment of this coin is made – later we explain what bitcoins mining consists of-.
In October 2009 , the first transaction in dollars was made with a price of 1,309.03 BTC (Bitcoin) for one dollar.
The first changes of Bitcoins for dollars are already made in 2010 at a price of 1 BTC per 0.003 dollars. Also in 2010 is created Mt Gox, one of the biggest bitcoin broker that later would be famous for starring in the biggest scam with this virtual currency.
In May 2010, the first purchase in bitcoins took place . Specifically, 10,000 BTC was paid for two pizzas. We can say that it is the most expensive pizzas in history. At the current price, we are talking about 30 million dollars for two pizzas.
In 2011 , other cryptocurrencies begin to emerge and Bitcoin’s growth continues until 2013, when it receives a new boost and its price reaches $ 3,000.
It is not until 2015 when bitcoin is being legislated as a method of payment – let’s remember that this is its main function-. That year the EU exempts from VAT the operations with this virtual currency, while the technology advances that allows to mine and get bitcoins faster. In addition, it raises it to the payment method range.
But the real boom of Bitcoin does not come until 2017. It is at the beginning of the year when it exceeds $ 2,000 and even $ 3,000 for BTC. The reason according to the experts is that the BTC would no longer have value as a means of payment and would begin to have it as a financial asset, something similar to what happens when investing in gold .
Throughout 2017 the value of bitcoin has reached over 20,000 euros, marking a milestone.
Added to this is the fact that the 16 million units of bitcoin mined have already been exceeded, which brings us closer to the maximum threshold of 21 million bitcoins that will be created.
In fact, its production and value is based on the law of supply and demand. Another interesting detail is that Bitcoin has a fixed limit of 21 million coins, which will be reached in 2030.