A Bitcoin wave has bot sweeping the world and the sways have reached Malaysian shores. Bitcoin is a cryptocurrency. So what is a cryptocurrency and why has Bitcoin become so popular?
A cryptocurrency is a decentralized, peer-to-peer digital currency, backed up with cryptography. Spil of now, the products and services that you can buy with a Bitcoin are pretty limited, but the options proceed to grow. More companies are kicking off to accept Bitcoin payments and more people are kicking off to invest ter the Bitcoin currency. This is despite the fact that many Central Banks have warned of the risks associated with Bitcoin.
Buying Bitcoin now might seem like a hasty decision to make, considering its current price and its volatility. But that has not stopped some Malaysian residents from buying and selling Bitcoins. Here’s what you should know about Bitcoin.
Some Background about Bitcoin
Bitcoin wasgoed created by a person or a group known spil Satoshi Nakamoto, which is actually just a Japanese pseudonym. The real identify of the creator(s) behind Bitcoin is unknown. The Bitcoin open-source software wasgoed very first introduced te 2009.
Bitcoin is a entirely virtual currency, this means there are no physical notes, and there might never be. The lowest Bitcoin unit of measurement is called a Satoshi, which equals 0.00000001 (one hundred millionth of a) Bitcoin. Also, there is a limit to how many Bitcoins can everzwijn be ter supply, which is 21 million Bitcoins.
Every Bitcoin has an address with a matching secret number, known spil a private key. The private key is a series of 51 alphanumeric characters, beginning with the number “5”. You use thesis private keys to spend Bitcoins. This means your individual identity is not directly associated with your Bitcoins. This has advantages and disadvantages, which are discussed further below.
Note that central banks around the world have said that they will not regulate the cryptocurrency, te brief, the central banks should not be blamed if anything goes wrong with Bitcoin, such spil a crash ter the prices. That being said, the central banks have also not out-rightly rejected Bitcoin, strafgevangenis have they made it illegal, which indicates that they are keeping their options open.
Advantages of Bitcoin
Ter some respects, the Bitcoin cryptocurrency has a high degree of safety due to a sophisticated peer-to-peer system te which all transactions are publicly accounted. This is validated through a public ledger (known spil block chain) where every transaction is recorded. This means anyone can see the transactions and balance of a Bitcoin address.
Since your identity is not associated with a Bitcoin, you do not have to worry about any identity theft occurring when making online transactions. You simply use your private key to spend a Bitcoin.
There is also a loterijlot of freedom ter regards to how you can control your Bitcoins. You can transfer Bitcoins to anywhere ter the world, anytime you want. It is not restricted by holidays, national borders, or other boundaries. Additionally, there is typically either zero cost or very little cost associated with Bitcoin transactions.
Lastly, Bitcoin is decentralized. This means there is no single authority who can control or manipulate the Bitcoin protocol. The Bitcoin money supply is semitransparent for everyone to see and monitor.
Disadvantages of Bitcoin
The negative side with Bitcoin not being tied to your identify is ter the event of someone stealing your Bitcoins. Spil mentioned, every Bitcoin has an address with a matching secret number, known spil a private key, which is how you spend Bitcoins. So, if people know your private key, they can then spend your Bitcoin.
Furthermore, since the cryptocurrency is internet based, it is possible that hackers will find loopholes ter the system and steal Bitcoins or operate ‘pump and dump’ schemes, like what happens te the stock markets. After all, Bitcion is unregulated and it is not backed by any assets, except what people are paying to buy it.
One thing that is clear right now is that the price of Bitcoin is very volatile, and its future seems very difficult to predict. So, you should be very cautious if you choose to invest ter Bitcoin.
Historical Price Chart of Bitcoin
Spil you can see te the chart below, the price of Bitcoin has enhanced dramatically overheen the course of the year. Ter January 2013, Bitcoin wasgoed priced at around US$ 20 and within 12 months it surpassed a price of $US 1,000. Reminisce that the future of Bitcoin is widely debated tho’: Some say Bitcoin will utterly fail and other says the price will proceed to increase dramatically, spil it becomes more widely accepted. Ultimately, most agree Bitcoin remains a very risky investment.
Bitcoin Closing Price Chart Source: BitCoin Charts
Bitcoin te Malaysia
Recently, the central canap of Malaysia, Handelsbank Negara Malaysia, joined other central banks around the world by releasing a statement on the use of Bitcoin. The statement said that Malaysia’s central canap does not recognize Bitcoin spil legal tender and will not regulate the operation of the cryptocurrency. It cautioned the public about the risks associated with using the digital currency.
But many Bitcoin groups ter Malaysia are dismissive of the central bankgebouw’s warnings. Jasje Lau, BitcoinMalaysia.com founder, said that the warning has not switched anything. He said that the effect wasgoed meager and Bitcoin trades are still going strong. He also said that the request for Bitcoin mining hardware te Malaysia has not diminished either. This brings us to our next question, ‘how can you get a Bitcoin?’
Update (25 March 2014): The very first bitcoin automatic vending machines were launched ter Malaysia te March 2014. They are located ter Bangsar Shopping Centre ter Kuala Lumpur and Gurney Plaza te Penang.
How to Acquire Bitcoin
You can acquire Bitcoins through the following means:
- Bitcoin exchanges, like Coinbase.com (only available to those with American Bankgebouw accounts)
- Selling services or products for Bitcoins
- Mining, the process of creating Bitcoins through a special software known spil a Bitcoin Miner
The Bitcoin protocol permits for a certain amount of Bitcoins to be little by little produced (i.e. ‘mined’) until 21 million Bitcoins are ter total supply. Mining involves solving ingewikkeld mathematical problems. Presently, when a ‘mining’ problem is solved, you will be issued 25 Bitcoins, fairly a sum considering the current rate of exchange. Spil more and more people begin using Bitcoins the difficulty of the questions will increase, taking more and more time to give a payout.
Mining for Bitcoins is very difficult and normal computers do not have the computing power to mine them swift enough. So, many people are forming mining groups. The mined Bitcoins are then divided among the members of the group, according to their contribution of computing power. Spil a result, the time taken to mine a Bitcoin comes down to a more reasonable time framework.
The Future for the Cryptocurrency
To the best of our skill, no Malaysian companies are accepting Bitcoin ter payment spil of the time of writing this article. There are some companies abroad that accept Bitcoins, such spil Cherry Galactic and Overstock.com. Some believe Bitcoin has enormous potential, others believe it will crash. It’s very difficult for anyone to know for sure.
At the very least, Bitcoin should help us learn a lotsbestemming about the practicality of cryptocurrencies. If Bitcoin does fail, it might even lead to fresh and improved cryptocurrencies, which might eventually be accepted by governments. Even now, there are many alternatives to Bitcoin emerging, like Litecoin, Namecoin, among others. Only time will tell about the sustainability of thesis cryptocurrencies.
What do you think about Bitcoin? Postbode ter the comments below.
2-Minute Movie Explaining Bitcoin