Last Updated: Sunday, April 25th, 2021
Bitcoin is fascinating, but it can also be confusing (and the crypto world in general). In this post, we explore some fundamental questions about the prominent cryptocurrency. Let’s begin!
Questions Answered
- Who started Bitcoin?
- Is Bitcoin tangible money?
- How much is Bitcoin worth today?
- How does Bitcoin have value?
- How is Bitcoin secure?
- Are U.S. companies invested in Bitcoin?
- Is Bitcoin the largest cryptocurrency in the world?
- How does someone purchase Bitcoin?
1. Who started Bitcoin?
This is probably my favorite question on this list. Why? Because the answer remains a mystery…seriously! That’s not a joke.
One of the most interesting things about Bitcoin (and that is saying a LOT) is that no one knows with certainty who started the cryptocurrency. What we do know is that Bitcoin was founded in 2008 by someone (or a group of people) under the pseudonym Satoshi Nakamoto.
In the fall of 2008, Bitcoin: A Peer-to-Peer Electronic Cash System, was released – a white-paper that articulated the concepts of a “purely peer-to-peer version of electronic cash [that] would allow online payments to be sent directly from one party to another without going through a financial institution.”
That quote is from the actual white-paper, which you can find here.
The white-paper was indeed authored by Satoshi Nakamoto. To this day, it remains unknown as to who Satoshi Nakamoto is. Several people have claimed to be Nakamoto, but no one has been verified and his/her/their identity remains a mystery.
2. Is Bitcoin tangible money?
Bitcoin is not a tangible currency but instead a digital currency, and can be bought, sold, and held online. Bitcoin is what is known as a “decentralized currency,” which means there is no financial intermediary or administrator (like a bank or government) involved in its exchanges. On the contrary, fiat currencies are government-issued currencies, like the euro, yen, US dollar, and so on. These currencies are not decentralized.
3. How much is Bitcoin worth today?
At the time of this blog post (4/25/21), one Bitcoin is worth nearly $50,000. Bitcoin’s price (as well as the majority of cryptocurrencies) is highly volatile. Below is a screenshot of Bitcoin’s historical chart on Coinbase. Bitcoin’s all-time high is $64,899, which it hit shortly ago (April 13, 2021).
4. How does Bitcoin have value?
One major reason Bitcoin has value is because the prominent digital currency has demonstrated the ability to be a way to store value. People can (and have) used Bitcoin to buy goods and services, just like someone can use a traditional currency like the US dollar to purchase something.
Another reason Bitcoin has value is because it is highly secure thanks to the technology behind it: blockchain.
The prominent cryptocurrency is also scarce. Bitcoin was set up so that the world will never have more than 21 million Bitcoin. This ensures scarcity, which helps create value.
5. How is Bitcoin secure?
Bitcoin is highly secure because it is powered by blockchain, which is, to keep it simple, a virtual ledger that records transactions chronologically. Each transaction (a block) gets added to the end of the blockchain, which results in a chronological list of transactions.
Blockchain is very hard to hack. According to a great article from Investopedia:
“After a block has been added to the end of the blockchain, it is very difficult to go back and alter the contents of the block unless the majority reached a consensus to do so…” and that “Due to the size of Bitcoin’s network and how fast it is growing, the cost to pull off such a feat would probably be insurmountable. Not only would this be extremely expensive, but it would also likely be fruitless.” – Investopedia, “Blockchain Explained”
Bitcoin is also decentralized (as mentioned earlier), so it is not controlled or regulated by a government (like fiat currencies are).
6. Are companies in the United States invested in Bitcoin?
MicroStrategy, Tesla, and Square are three examples of prominent companies that are invested in Bitcoin. Back in February, Tesla purchased $1.5 billion in Bitcoin. Square bought $170 million in Bitcoin later that month. And around the same time, MicroStrategy bought 19,452 Bitcoins valued at over $1 billion!
MicroStrategy also announced earlier this month that non-employee board members will be paid in Bitcoin. The growth and adoption of Bitcoin is really exciting to see.
7. Is Bitcoin the largest cryptocurrency in the world?
As of April 25th, 2021, Bitcoin is indeed the largest cryptocurrency in the world (by market capitalization) at $929.8 billion. Ethereum follows with roughly $266.2 billion, followed by Binance ($77 billion), Tether ($49.9 billion), and XRP ($49.6 billion). Here’s a cryptocurrency market capitalization chart from CoinMarketCap:
8. How does someone purchase Bitcoin?
Anyone can use an online exchange like Coinbase to buy Bitcoin! Users can also buy, sell, send, receive, and store Bitcoin through using the platform.
People can also acquire Bitcoin outside of an online exchange, but I’ll save you guys the complicated details. Purchasing through an exchange like Coinbase / Etoro / Binance is simplest.
Thanks for reading!
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