The Illusion of Bitcoin and Why It is Dangerous for You – The Online Currency is Volatile

First, what is bitcom? It is “money”. Yes, Bitcoin is a digital currency created in 2009 by Satoshi Nakamoto. The name refers both to the open source software he designed to make use of the currency and to the peer-to-peer network formed by running that software, according to wikipedia.

 

Bitcoin eschews central authorities and issuers, using a distributed database spread across nodes of a peer-to-peer network to track transactions. Bitcoin uses digital signatures and proof-of-work to provide basic security functions, such as ensuring that bitcoins can be spent only once per owner and only by the person who owns them.

 

It is simply  a peer-to-peer currency. Peer-to-peer means that no central authority issues new money or tracks transactions. These tasks are managed collectively by the network. This is the problem.

 

With Bitcoin you have close to the global reserve currency which many economists have called since the financial crises. You buy and sell online anonymously without any control by the government. And the number of Bitcon has also increased at a constant rate which is close to what top economists expect a good currency to posses.

 

But this June, we got a small lesson that may change that perspective.  It nearly lost $9 million of the digital money when a hacker did his thing. The digital currency crashed from $30 to a penny before it rebounded to $16. At $16 it is still up when compared to what it was earlier in the year, $5. Yet, do not gamble with your future. The dollar or Naira has not crashed with that effervescence. Be careful with what the Silicon Valley does in this case.

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