From Barter to Bitcoin
When man began to rear domestic livestock, bartering became a way of purchasing goods. In 600BC, the first known currency was created by King Alyattes in Lydia. The coins then evolved into bank notes around the 1661 AD. Money became essential for the development of trade. It was an up gradation from the barter system and proved as an intermediary substance enabling the seller to become a buyer whenever he wanted.
Developing from the early roots, money has developed into payments and bitcoins. Bitcoin is the world’s first decentralized cryptocurrency. The “Bitcoin Technology” is set to disrupt the world of money once more.
History of Bitcoin:
Bitcoin was proposed by Satoshi Nakamoto, a software developer, in 2008. He devised an electronic payment system that was based on mathematical proof. He wanted to develop a currency that was independent of any central authority, transferred electronically instantly with low transaction fees. The first bitcoins were issued in 2009 against a backdrop of the international financial crises.
Bitcoins are not produced by the banks; these are digitally created by a community of people. This currency is mined using the computer technology in a distributed network. These are flexible, decentralized, secure, and gives more control of the currency. A bitcoin address can be set up in seconds without any payable fee unlike jumping through hoops in a conventional bank.
Bitcoins are not linked to names, addresses, or any other personal information and a user can hold multiple bitcoin addresses. The blockchain holds every detail of the bitcoin’s every single transaction. The publically used bitcoin addresses can easily reveal to anyone the number of bitcoins stored at that address. It is the fastest way of sending payments across the network but once the bitcoins are sent, they are gone forever until the recipient returns them to you.
The bitcoin is purely a digital asset and allows value to be moved as easily as information. Bitcoins can now be bought and sold on exchanges where their price is determined by the market force. Many entrepreneurs have built huge businesses providing services that evolve around bitcoin. More than ever, people are using bitcoin for daily transactions in December; the usage hit a record high when the average number of daily transactions was more than doubled.
The number of transactions per day are visible from the below given graph,
Most of the transactions took place on the speculation that the price of bitcoins would rise. According to the San Francisco outfit, Coin base which operates the world’s biggest bitcoin exchange stated that 20% of its exchanges now involve bitcoin transactions. It operates 2.8 million bitcoin wallets globally and drives these digital payments for prominent retailers such as Dell and Overstock.com.
Future of the bitcoin:
Bitcoin has grabbed a lot of attention recently; its blockchain technology is really helpful to reinvent the exchange of stock and various financial securities. Most of the major companies such as Nasdaq, Citi Ventures, Capital One Financial, and Visa see bitcoin as a way an instant and reliable way of trading stock and other financial securities. 2016 is the year when analysts have realized that digital currency can truly change the world.