2021 has been a huge year for crypto currency and it has brought a lot of newcomers to the space due to social media and news coverage. But what is crypto currency? Is it magic internet money? And what in the world does hodl mean? This will be the first in a series of articles I write to cover such subjects and their origin. This one will focus on the first child of crypto, bitcoin
When was it created?
Bitcoin was created in 2009 by a presumed pseudonymous person or persons calling themselves Satoshi Nakamoto. To this day no one knows who Satoshi is. He currently holds roughly 1 million of the 21 million total supply, which is thought to have been mined within the first 2 years of bitcoin’s existence and haven’t been touched since.
What is Bitcoin?
Bitcoin is a decentralized digital currency that you can buy, sell, send, or trade without the need of a bank. Trust isn’t a factor when it comes to bitcoin because all of these transactions are done through the block chain. Satoshi’s original goal for bitcoin was to be a peer to peer electronic payment system that relied on cryptographic algorithms instead of trust, but it has turned into something much more.
Evolving use cases
Bitcoin has turned into more of a store of value instead of a payment network now, and for good reason. As I mentioned earlier the total supply that can ever exist of bitcoin is 21 million. This makes for a great store of value one might even say better than gold! Supply and demand is a huge factor in this situation. We have seen it in the real world countless times when there is not enough of something the price usually goes up. This works the same with bitcoin as more people buy up the bitcoin the less there is and the higher the price will go. With gold or fiat currencies we usually discover more gold , or print more dollars. Holding money in a savings account will result in inflation eating away at its buying power.
How does it work?
The way Bitcoin transactions work are not quite as mysterious as many people think. First a transaction is entered, then the transaction is transmitted to a network of miners across the world, the miners then compete to solve the equation to confirm the validity of the transaction. Once confirmed to be legitimate transactions the miners are rewarded and the transactions are then placed into blocks that are chained together with other blocks creating a long history of all the transactions that remain on the block chain forever. This process is how it got the name block chain, and verified transactions can be seen by anyone and are a part of a public ledger.
It is too expensive!
A Lot of people look at the price of Bitcoin and think it is expensive, and believe they cannot afford a full one, But many people (Myself included) dollar cost average into it buying smaller units of a bitcoin. The smallest unit of a bitcoin is a Satoshi and is equivalent to a one hundred millionth of a bitcoin or .00000001 bitcoin.
The term Hodl was first used in 2013 in a post on a bitcoin forum where the user misspelled hold, many people enjoyed the term and it has been around ever since. To some people hodl stands for “hold on for dear life”. One of Bitcoins most popular stories involves Papa John’s Pizza. On May 22 2010 a Laszlo Hanyecz traded 10,000 bitcoins for 2 pizzas from the famous pizza place, resulting in the crypto community celebrating that day as “Bitcoin Pizza Day”.
The future of bitcoin is an adventurous journey that not a single person knows how it may end, the change in attitude by big banks and public companies make the future of bitcoin look bright but it is still a very risky place for your money even if it has been the best performing asset of all times.
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