As of today, Bitcoin is trading at 17249.90 dollars per Bitcoin. But what exactly is a Bitcoin and what is all the hype about? To answer that, let’s start at the beginning. Back in 2008, a man (or group) under the pseudonym Satoshi Nakamoto opened a domain name called “bitcoin.org” Satoshi released an explanation of Bitcoin and titled it “Bitcoin: A Peer-to-Peer Electronic Cash System.” Bitcoin’s platform is to send money to from one person to another over the internet or via an application in the form of Bitcoins. This is all done without the need for a bank.
So how does this work, exactly? By signing up for Bitcoin, you will receive an address. This address has nothing to do with where you live, rather this is an alphanumerical code that acts as your Bitcoin ID. There are two different addresses; a secret address for transferring money and a public address for you to receive money. You can also mine for Bitcoins – which was actually how the original Bitcoins were created – by solving a mathematical puzzle in exchange for new Bitcoins. (a word of advice: these puzzles are meant for the mathematically gifted among us).
These days, you can even do your shopping with Bitcoin, as many major retailers, like Expedia, now accept Bitcoin as a form of payment. Its acceptance as currency goes to show that Bitcoin is here to stay.
Now, what’s so scary about Bitcoin? For starters, it is permissionless and borderless, meaning you can send any amount of money to anyone, anywhere in the world with a push of a button. No ID is necessary and no one will check to see if the transaction was legal. All this can amount to some seriously shady business that could involve anyone from terrorists to other criminal transactions.
On the other hand, using Bitcoin allows you to bypass the annoyance of having the bank nosing about your business and forgo the nuisance of the bank’s limits on your money transfers, since Bitcoin actually allows you to transfer any amount of money to anyone you want with no questions asked.
The economists and basically the top one percent all say that Bitcoin is a bubble that will eventually pop. Bitcoin has even been compared to Holland’s tulip mania in the 17th century. This all begs the question – should you ride the bubble and make some quick and easy cash before it allegedly pops?
Can you really make money off Bitcoin?
You can use one of the many available applications to buy Bitcoin off of someone else who is selling theirs in apps like Coinbase and Bitstamp. Once you have purchased Bitcoins you can bide your time until they’re worth more than what you bought them for and then sell them to another buyer at a profit. Skill skeptic? It might be worth mentioning that Bitcoin started out as being worth a fraction of a cent and today 1 Bitcoin is worth $17, 488.90 dollars. Excited yet?
Many economists have warned Bitcoin users that it’s a Ponzi Scheme, and JP Morgan Chase bank CEO, Jamie Dimon, even called it a “fraud.” The question remains: is it really dangerous, as Dimon suggests, or are the banks simply protecting their own monopoly from becoming obsolete? If you can trade money through an application and even shop using Bitcoins then why do we need to deal with annoying bank tellers and unnecessary banking fees?
The inventor(s) of Bitcoin
The craziest story of all about Bitcoin? The identity of the creator of Bitcoin is a complete mystery. No one knows who Satoshi Nakamoto is or how many people are behind this pseudonym. Satoshi was the first person to mine for Bitcoins in 2009 (which was coined the genesis block) for a reward of 50 Bitcoins. Satoshi disappeared in 2010 and handed over the keys to the castle to software developer Gavin Andresen, who is adamant about decentralizing control over Bitcoin. It is said that he has billions of dollars worth of Bitcoin… no wonder he wants to remain anonymous. Psst, that’s not really a picture of him it’s just an estimated sketch of what Satoshi might look like.
Pizza for Bitcoin anyone?
The first transaction of bitcoin occurred in 2010 soon after Bitcoin hit the market. What was the transaction you ask? The only one that’s important in life: the purchase of a pizza pie. Laszlo Hanyecz paid 10,000 Bitcoins to another individual in exchange for purchasing two pizzas from a local Papa John’s pizza and delivered it to Laszlo’s front door. This was this transaction that sparked the world into using Bitcoin to purchase their necessities. Now hundreds of stores accept Bitcoin as payment.
Katy Perry listens to Warren Buffett
Katy Perry is a hugely popular singer, songwriter and now… possibly a Bitcoin investor? That’s right. Katy took time from recording her next big hit single to pay a visit to her dear old friend – business mogul and multi-billionaire Warren Buffett. Who did she consult you may ask? Oh, none other than Warren Buffett himself. She posted “Nbd asking Warren Buffett his thoughts on cryptocurrency.” After that, we are sadly left out of the loop as to what Buffett responded. That said, we do know is that Buffett is probably not Bitcoin’s greatest fan, having reportedly called it a “real bubble.”
While Katy Perry deliberates over Bitcoin, this police chief officer went viral after he decided to forgo the warnings of the economists and billionaire investors and requested to receive his salary in Bitcoins. From Vicco, Kentucky with a population of fewer than 300 people even this police officer knows when to jump on the bandwagon and be economically savvy. This was the first time that a government entity was paid via e-currency. This is just another example of how widespread Bitcoin has become.
Bitcoin pays for your university too
It isn’t really all that surprising that one of the first universities to offer a degree in digital currency would also be the first university to accept payment for tuition in the form of a Bitcoin transfer. The University of Nicosia in Cyprus is trying to become a hub for Bitcoin transactions and they are starting on the right foot: with the next generation. Bitcoin is truly being used around the world from Cyprus to Tokyo.
A forgotten Bitcoin is an awesome Bitcoin
Meet Kristofer Koch and his perfectly timed bout of forgetfulness. Koch bought Bitcoin on a whim in back in 2009 right when it was released. He spent only $27 dollars to purchase 5,000 BTC (that stands for Bitcoin). Kristofer completely forgot about the transaction until 2013, when he was hit with a very happy flashback. Koch was able to sell just 1000 BTC of his 5,000 BTC, which was enough to buy an apartment on the posh side of Oslo, Denmark.
Committed relationship with Bitcoin
Austin Craig and Beccy Bingham decided that when they got married they weren’t only going to commit to each other but rather they were going to commit to Bitcoin as well. They vowed to only spend money using the Bitcoin apps for the first 90 days of their marriage. And thankfully they blogged their whole way through it. They decided to get their salaries, pay their landlord, pay the bills, gas, groceries and basically their entire lives through bitcoin. Check out their social media pages to see how their cryptocurrency adventure goes.
Bitcoin takes flight!
Virgin Galactic is a company that is trying to take tourism to outer space. The founder is none other than the billionaire Sir Richard Branson. This is a forward-looking company so it makes sense that they would be forward thinking when it comes to their payment policies. It definitely will take more than a few Bitcoins to afford a trip on the VSS Enterprise. If you are a future astronoght with some Bitcoin to spare then get your ticket now.
Ashton Kutcher’s on the bandwagon too
Ashton Kutcher is not only a pretty face but he’s also in venture capital. Ashton has invested in over 60 companies like Skype and Airbnb. He is also the co-founder of A-Grade Investments which is a venture fund. They invested in BitPay, which is a processor that lets store owners accept Bitcoin as a form of payment. Ashton said “we don’t have to worry about Big Brother and that same infrastructure that built out bitcoin could be used in the security industry for mass good,” he’s clearly a fan.
Kids can do it too
Erik Finman might be one of the youngest investors, at only 15 years old he received his first Bitcoins from his brother as a lesson in how to use Bitcoin in 2012. When Erik received $1000 from his grandmother he knew right away what he was going to do with it. He put it all in Bitcoin and for $12 a piece and a year and a half later he cashed most of them in for $100,000! At 18 years old, he still has over $1 million worth of Bitcoin.
Fly all over the world on Bitcoin
One anonymous man invested only $3,000 in Bitcoin in 2010 when it was worth a mere $0.15 per Bitcoin. That gave him a bit less than 20,000 BTC. He didn’t expect much of a return on his investment and mostly forgot about it until he checked Bitcoin’s worth in 2013. When the stock was worth two thousand times his investment he kept selling as the worth rose until he made about $25 million. He quit his job right then and there and decided to travel the world with his girlfriend.
Bitcoin buys music too
Mel B, formally known as Scary Spice and one-fifth of the famous Spice Girls, officially became the first musician to allow her fans to purchase her music via Bitcoin. Mel B said “I love how new technology makes our lives easier, and to me, that’s exciting. Bitcoin unites my fans around the world using one currency. They can just pay using bitcoins.” Mel B’s is essentially turning Bitcoin into a forum for unifying people across the globe, all through the power of currency.
Another UK singer, though is kicking herself right now. Lilly Allen confessed on Twitter that she was offered a singing gig on the website Second Life, which lets you become anyone you want within a virtual reality world. Instead of cash, Lilly was offered hundreds of thousands of Bitcoins and she replied: “as if.” After Bitcoin blew up, Lilly responded by tweeting “#idiot #idiot!” Don’t beat yourself up Lilly, most people would have made the same mistake.
Another celebrity that has jumped on the Bitcoin bandwagon is Drew Carey. This actor and comedian tweeted in 2013 “Just tried to buy breakfast w bitcoins. Refused. #whenwilltheworlcatchuptomyhipness?” Drew may have had trouble then finding a restaurant to accept his Bitcoins but in this day and age, there are hundreds of stores that accept Bitcoin payments, and the list is growing. You can even use Yelp to find out if a store near you accepts Bitcoin.
Billionaires are making more
Already billionaire Tim Draper is a venture capitalist and made most of his billions through his early investment in Skype. He decided that if it worked once before, then why not do it again. In 2014 Draper bought 30,000 Bitcoins for $19 million at the time. Now, his investment is worth about $520 million. In only three years that is one heck of an ROI (return on investment). Draper is clearly a fan of the cryptocurrency market. And after reading these stories… so are we.
The FBI has gotten on board
This may come as a shock to you since it definitely made us drop our coffee. The FBI made millions off of Bitcoin, though probably not the way you would think. It actually seized 144,000 Bitcoins in 2013 when they shut down the Silk Road – a darknet website used to buy and sell illegal substances. That made the FBI the largest owner of Bitcoin at the time. The government auctioned off the 144,000 Bitcoins for $48 million – a nice profit, but it’s a shame they didn’t wait a bit longer.
Auctioning Bitcoins away
Barry Silbert is literally a cryptocurrency expert. Barry is a founder of the Digital Currency Group as well as a venture capitalist. During the aforementioned FBI Bitcoin auction, Barry legally bought 48,000 Bitcoins. At the time, Bitcoin was only worth $350, which means that his $16.8 million purchase is now worth over $831 million only a few years later. Barry probably has never loved the FBI as much as he does now.
An accidental millionaire
One homeowner decided to accept Bitcoin as a form of payment for his house when he put it up on the market. Once he found a buyer they negotiated to sell the house for $4 million. At the time one Bitcoin was worth $750 but once the transaction was completed and by the time the ink dried the Bitcoins went up to value at $1000 dollars per Bitcoin. The owner not only sold his house but also made $1.3 million bonus on the transaction.
The Bitcoin robbery
In 2011 Mt. Gox (Magic: The Gathering Online eXchange) was the largest Bitcoin exchange on the market. It was supposed to sell Magic: the Gathering trading cards until they heard about Bitcoin and quickly changed tracks. However, there was a hole in their program that a hacker took advantage of. The hacker stole 800,000 Bitcoins from Mt. Gox and forced the company into bankruptcy. Mt. Gox CEO, Mark Karpelès was charged with embezzlement but conveniently no one found the thief.
Spring cleaning can be dangerous
Back in 2013, James Howells, A British IT worker at Newport, threw away a hard drive on which he had backed up his Bitcoins. Howells was doing some spring cleaning and accidentally threw out the hard drive that contained 7,500 Bitcoins. He had mined for those Bitcoins in its early stages. He is still searching local landfills for the hard drive, and while that may sound extreme, those Bitcoins are currently worth $80 million dollars. Can someone help me find Newport on a map?
Winklevoss Twins are finally the last ones laughing
Remember Tyler and Cameron Winklevoss? They’re the twins who sued Mark Zuckerberg for allegedly stealing their idea of Facebook. After winning their case against Zuckerberg, the Winklevosses spent their settlement money wisely and invested $11 million in bitcoin, back when it was trading at $120. Today they hold one of the largest portfolios of Bitcoin holding at over $1 billion worth of Bitcoin. You may say that they are the last ones laughing now. Nice, but just a friendly reminder that Mark Zuckerberg’s worth $71 billion.