Bitcoin (BTC) is a kind of cryptocurrency, or virtual currency, created in 2009. Unlike conventional coins, bitcoin does not have a central bank controlling its appreciation and depreciation, which follow the direction of the market – in the law of supply and demand – and the waves of investments and news about their speculative value.
It is not known, exactly, who was the creator of Bitcoin. However, this merit is usually attributed to Dorian Nakamoto, which vehemently denies this information. According to unofficial claims, Dorian would be the real name behind Satoshi Nakamoto, a codename used to designate the person responsible for the existence of the programming used in bitcoin.
There are also several other types of cryptocurrencies, such as the Litecoin it's the Mastercoin, but Bitcoin is the best known (and controversial) virtual currency. It is so popular that many people claim it is like "internet money". Therefore, in the same way that Brazil's money is the Real, that of the United States is the Dollar and that of Russia is the Ruble, internet money would certainly be bitcoin.
How do I buy or buy bitcoin?
Before any step, the user must have a virtual wallet, an individual and non-transferable internet point where bitcoins are stored. To create it, just access the website of blockchain. Once you have your own wallet, virtual currency units can be purchased in three different ways:
1) Buy bitcoin directly
The simplest way is to acquire through the exchange of “real currency” for internet bits. In this process, you perform a forex exchange according to the current market quote. The more valued bitcoin becomes, the more money you will have to spend to acquire it. Purchases and sales are performed on the same site where you created your wallet, blockchain, or on ATMs specifically created for this, which are still very rare and almost non-existent in the Brazil.
2) Perform operations using bitcoins
An alternative way is to carry out a sale or any business by charging in bitcoins. Thus, after selling a computer or performing some type of service, payment can be made using cryptocurrency. There are cases of mansions sold in bitcoins, as well as other businesses that, little by little, are becoming popular. There are some establishments in Brazil and worldwide that already receive payment from their customers for this currency, in which transactions involve the use of applications on the mobile phones of customers and sellers.
3) Become a “miner”
All transactions carried out in bitcoin are registered and publicly controlled through the portal of the blockchain, which is operated and maintained by thousands of “miners” around the world. Therefore, mining bitcoins means using your computer's capacity to support the general server, that is, to keep the network structure functioning. So, as a “payment” or refund of your contribution, you get some bitcoins in return.
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The greater the computer's capacity, the greater the contribution and the better the "payment". However, it is very difficult for basic users on "common" computers to achieve any success, as this service is usually performed by teams made up of people with multiple computers that come together to form an advanced configuration to deliver better performance and make more money virtual.
How exactly does the bitcoin system work?
As we've already emphasized, to have bitcoins, you need to have your own virtual wallet. It is used both to store money and to carry out unique and specific trades. It is like a bank account, as each wallet has its specific number, which should be used for each purchase or receipt made.
Whenever a transaction is carried out, it is publicly registered on the portal of the blockchain, when miners verify and confirm the validity of information through a series of softwares developed specifically for these functions. This prevents copies of coins or double payments from being made with the same currency unit. All wallets and data are protected by encryption.
Blockchain home page playback, with recent transaction logs
As there is no Central Bank, the use of currency is free from bureaucratic instances, becoming more fluid. Furthermore, this configuration does not allow governments to inflate or value the currency, controlling how much money is produced. Actually, only 21 million bitcoins were programmed to be produced, which should be implemented little by little until the year 2140.
Despite quickly becoming a huge success in the virtual world, bitcoin has been generating some polemics. No government officially recognizes the currency – since this would cause governments to lose their monopoly over their countries' financial markets. Russia and Thailand, including, they even banned the circulation of currency, so that any operation involving bitcoins would be considered a crime in these countries.
Many economists also criticize the constant fluctuations in the price of money, the risks involved in its use and its high speculative value. Furthermore, the security and openness it offers to money laundering and other illicit operations are questioned.
On the other hand, its supporters argue that bitcoin represents the future of the use of money in the world and that its adoption is just the following a global trend, in which the use of virtual money in the form of credit cards and online transfers is increasingly more common.
By Rodolfo Alves Pena
Graduated in Geography