CHARLOTTE, NC (AP) – The price of bitcoin rose above $ 20,000 for the first time on Wednesday, as the speculative digital currency reached its previous peak shortly after it became commercial on Wall Street three years ago. this month.
Like other instruments used to store value in times of uncertainty, bitcoin has benefited from the pandemic that has pushed other commodities such as gold, silver, platinum to multi -ear highs. Due to the structure of bitcoin, few coins are being created anymore and there is a relative shortage.
Here is a brief overview of bitcoin:
HOW BITCOINS WORK
Bitcoin is a digital currency that is not tied to a bank or government and allows users to spend money anonymously. The coins are created by consumers who “dig” them by borrowing computer power to check other users’ transactions. They receive bitcoins in exchange. The coins can also be bought and sold on exchanges with US dollars and other currencies. Some businesses also accept bitcoin, but its popularity has stopped in recent years.
Bitcoins had their first appearance in Wall Street in December 2017, when the future of bitcoin became commercial on the Chicago Mercantile Exchange and the Chicago Board of Trade. The drive and interest in heading bitcoin to its first trading appearance pushed the digital currency to record highlights. The currency, valued at less than $ 1,000 at the beginning of 2017, climbed up to $ 19,783 by the end of the year.
But once the trading started, bitcoin’s future fell sharply over several months. A year later, the currency was worth less than $ 4,000. Investors and bitcoin enthusiasts at the time said the 2017 jump was largely caused by speculative interest and media attention.
HOW ARE YOU NOW WORTH?
One bitcoin is worth around $ 20,700, according to Coinbase, a large digital currency exchange that also trades tokens and other currencies.
But the value of bitcoin is volatile and moves hundreds or even thousands of dollars in the course of a week. A month ago, it was worth less than $ 17,000 and a year ago it was worth less than $ 7,000.
Bitcoin is a highly speculative investment and has not performed as well as more traditional forms of investing, such as stocks or bonds, unless a buyer was in the currency years before it held on. For example, three years ago, The Associated Press bought $ 100 worth of bitcoin to keep track of the currency and possibly build stories about how businesses were receiving it. Only this month did that portfolio break even.
WHY BITCOINS ARE POPULAR
Bitcoins are basically lines of computer code that are digitally signed every time they travel from one owner to the next. Transactions can be done anonymously, making the currency popular with liberals as well as tech enthusiasts, speculators – and criminals.
Bitcoins must be stored in a digital wallet, either online through an exchange like Coinbase, or offline on a hard drive using specialized software. While the bitcoin community knows how many bitcoins exist, anyone’s guess is where they all are.
WHO USES BITCOIN?
Some businesses have jumped on the bitcoin bandwagon. Overstock.com accepts payments in bitcoin, for example.
The currency has become popular enough that on average, more than 300,000 transactions occur in a day, according to bitcoin wallet site blockchain.info. Yet, its popularity is low compared to cash and credit cards, and most individuals and businesses will not accept bitcoins for payments.
HOW BITCOINS ARE SAFE
The bitcoin network works by harnessing individuals’ greed for the benefit of all. A network of tech-savvy consumers called miners keep the system honest by pouring their computing power into blockchain, a global running account of every bitcoin transaction. The blockchain prevents fraudsters from spending the same bitcoin twice, and the miners are rewarded for their efforts by being gifted with the odd bitcoin. As long as miners keep the blockchain secure, imitation shouldn’t be a problem.
HOW BITCOIN CAME IS
It’s a mystery. Bitcoin was launched in 2009 by a person or group of people operating under the name Satoshi Nakamoto. Bitcoin was then adopted by a small clutch of enthusiasts. Nakamoto dropped off the map as bitcoin began to attract widespread attention. But supporters say it doesn’t matter: The currency obeyes its own internal logic.
In 2016, an Australian entrepreneur stepped forward claiming to be the founder of bitcoin, only to say days later that he lacked “the courage” to publish proof that he was. No one has claimed credit for the currency since.
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