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Bitcoin Surges in Value. So, what is Bitccoin?

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Economists and investors were shocked when the value of the popular cryptocurrency bitcoin surged in value by over 1000% just a month ago. According to The Atlantic, bitcoin is a cryptocurrency, which is a type of money that is only usable online. Cryptocurrencies are not regulated by a central bank or government, so transactions using the currencies cannot be tracked. As of Jan 22, one bitcoin is worth $10,350. In 2012, that value was only $12.

 

According to CNN Money, bitcoin was created by an unknown person with the alias of Satoshi Nakamoto in 2009. The currency can only be used online and can buy things ranging from office furniture to video games. Anyone can use bitcoin, but it is most popular among small businesses because there are no additional fees for using the cryptocurrency. Many regular people collect Bitcoin as well, hoping that the value of the currency goes up over time.

 

“I usually use it to invest small amounts of money to gain profit, but I also have used it in the past to buy things on Amazon,” said OHS senior Harrison Lindbloom.

 

Because Bitcoin is an online-only

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currency, transactions take place online. According to CNN Money, a system called ‘bitcoin exchange’ allows people to “buy or sell bitcoin using different currencies.” People can also transfer bitcoin to one another using apps on a mobile phone or on a computer.

 

However, some world governments don’t like the idea of unregulated currencies flowing through the market. According to spokespersons for the Securities and Exchange Commission, bitcoin can cause fraud, promote illegal transactions, and can have a destabilizing effect on the market.

 

“As the technology underpinning these developments disrupts products and services in nearly every industry, lawmakers, regulators and law enforcement are scrambling to keep up,” said J. Dax Hansen, who is a leader of a law firm that specializes in cryptocurrency.

 

Instead of being printed by a factory, more bitcoin is made by a process called ‘bitcoin mining,’ which involves computers solving complex math problems. These computers are connected to a public ledger, called a blockchain, which process all payments made with bitcoin. When a computer solves one of these problems, it is awarded bitcoin. Small amounts of bitcoin are given to a winner every 10 minutes, according to Investopedia.

 

Despite the surge in value of bitcoin, some people suggest to not invest in the cryptocurrency. According to the Boston Globe, less and less businesses are using bitcoin. Instead, casual bitcoin collectors are the main reason for the surge in value. The collectors think that by collecting bitcoin now, the value will increase over time.  Once these collectors stop collecting bitcoin, the value of the cryptocurrency could go down, bursting the bitcoin “bubble” that has been growing for the past few months.

 

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About the Writer
Colin Geelan, Online Editor

My name is Colin Geelan and I am one of the online editors for the Spartan Speaks. Taking Journalism I with Ms. Herring last year sparked my interest in...

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Bitcoin Surges in Value. So, what is Bitccoin?