Has Bitcoin Lost Its Appeal Or Is It Just A Small Slump?
You must have heard about this world famous cryptocurreny Bitcoin. You might even have friends who collect Bitcoins. But is it still the same as it was few years back? Or is it dying out just like others did?
What exactly is Bitcoin?
It is a form of digital currency that exists primarily in cyberspace or in the digital world at a specific address which is linked with an access key. Unlike other similar form of digital currencies, BTC is decentralized, meaning government and banks don’t have control over it. Additionally Bitcoins aren’t produced like Dollars or Euros; they are generated by users through mining. This process requires software which can solve complex mathematical problems.
The biggest selling point of this cryptocurrency is its finite nature. There is a thing called Bitcoins protocol which stipulates that throughout the currency’s history, only 21 million Bitcoins can be created. So it’s obvious that because of such a rule, the demand of this currency will also increase along with its value.
How did Bitcoin become mainstream?
Bitcoin was started in 2008 by Satoshi Nakamoto after his paper Bitcoin: A Peer-to-Peer Electronic Cash System was successfully published. His vision was to create an electronic payment system which was free from the central authorities and was instantly transferrable. It wasn’t until two years later that the usage of Bitcoins came into practise. The Anonymity of this currency also made it a favourite among the people indulging in illegal activities on the online black market.
What troubles is Bitcoin facing?
Other than facing numerous reports of being associated with purchase and sales of drugs, illegal guns, and other illegal goods, Bitcoins have had a lot of setbacks.
For starters, being a digital currency, it is one of the favourite targets of hackers as they are always trying to find weaknesses in the security. Recently Bitfines, a major Bitcoins exchange was hacked and around 120,000 bitcoins or $60 million were stolen. In 2014, another major Bitcoin exchange MtGox was hacked and over %620 million was stolen.
Hacking isn’t the only major issue associated with Bitcoins. Some authorities have refused to acknowledge Bitcoin as a legitimate currency.