What is Bitcoin?

Bitcoin

Making more money than we can spend is everyone’s dream but making money, enough money and in your own terms without a 9 to 5 job is the ultimate dream. Everyone would like the freedom to choose his/her own work hours while earning enough money to sustain a comfortable lifestyle. The internet has opened a lot of possibilities for this to be a reality. I have been on this fact finding journey since 2008 and have earned a few dollars/rands here and there but haven’t reached that stage of financial security one desires from internet based earnings. I get very excited though by the endless earning possibilities I have seen which sometimes make me feel like a kid let loose in a candy store.

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The one important trick that I have learned very quickly is how to avoid potential pitfalls while searching for legitimate ways to make money online. But that’s a topic for another day. Getting back to this topic, In 2011 I came across the word Bitcoin. Naturally I got interested because after reading what it was I wanted to get in on the act and earn some money. I also came across a documentary called The Rise and Rise of Bitcoin. Oddly my immediate research did nothing much to peak my interest and I got a bit discouraged especially when I learned that this cryptocurrency was created by an individual or individuals.

I eventually lost interest. Fast forward to 2013 where I came across another documentary entitled “Bitcoin – The End of Money as We Know it.” This resumed my interest and I went digging on Google. During research my interest was piqued even more when I saw how much the exchange rate of 1 Bitcoin was against major world currencies. On the 3rd January 2017 Bitcoin breached the 1000 mark against the USD, $1019.24 to be exact. And to think that in 2015 when I started my research 1 Bitcoin was at $234.26 against the dollar.

So what is Bitcoin?

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Bitcoin is a payment system invented by Satoshi Nakamoto (this is thought to be a pseudo name as this guy didn’t want to be known) with a group of other people. They created the Bitcoin protocol and reference software, Bitcoin Core (formerly known as Bitcoin-Qt). Satoshi Nakamoto published the invention of this payment system in 2008 and released it as open software in 2009. The system is peer to peer and users can transact directly without needing an intermediary.

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Transactions are verified by network nodes and recorded in a public distributed ledger called the block chain. The ledger uses its own unit of account, also called bitcoin. The system works without a central repository or single administrator, which has led the US Treasury to categorize it as a decentralized virtual currency. Bitcoin is often referred to as the first cryptocurrency although there are other similar systems that existed before. Bitcoin can be correctly described as the first decentralised digital currency and the largest of its kind in terms of total market value.

Bitcoin units and denomination

How does a Bitcoin compare to other currencies? Bitcoin tops the list in terms of Dollar/ZAR exchange rate. The current exchange rate is 1 Bitcoin = $915.64 / 1 Bitcoin = R12582.08 (09 January 2017). It fluctuates quite considerably because of its volatility but future projections point to its value going in an unstoppable upward trend with most avid bitcoiners predicting that it will reach the $35000 mark. Here is a breakdown of the Bitcoin’s units and denominations:

• Bitcoin – BTC – (1 full Bitcoin)
• MilliBitcoin – mBTC – (1 thousandth of a BTC) – 0.001
• MicroBitcoin – μBTC – (1 millionth of a BTC) – 0.000001
• Satoshi – SAT – (100 millionth of a BTC) – 0.00000001

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  • 1 BTC = 1,000 mBTC (millibitcoin)
  • 1 BTC = 1,000,000 μBTC (microbitcoin)
  • 1 BTC = 100,000,000 Satoshis
  • 1 mBTC = 100,000 Satoshis
  • 1 μBTC (microbitcoin) = 100 Satoshis

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• 1 Satoshi = 0.00000001 ฿
• 10 Satoshi = 0.0000001 ฿
• 100 Satoshi = 0.000001 ฿
• 1,000 Satoshi = 0.00001 ฿
• 10,000 Satoshi = 0.0001 ฿
• 100,000 Satoshi = 0.001 ฿
• 10,0000,000 Satoshi = 1 ฿

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