by Jack Waymire
Led by Bitcoin, digital currencies, also known as cryptocurrencies, have made a big splash in recent years. While these newfangled currencies are still considered novelties by some, a number of organizations have embraced them. As the Infographic below demonstrates, some large corporations, including Microsoft, Dell, Dish Network and Overstock, accept payment in Bitcoins. The University of Cyprus, located in Nicosia, Cyprus was the first college to accept tuition payments in bitcoins. Over 1,300 Bitcoin ATMs are in existence in 50 countries.
The rise of cryptocurrencies makes sense if you consider it in the context of the explosion of interest in social media in recent years. With people conducting a significant portion of their social lives online, the acceptance of an online-only currency such as Bitcoin doesn’t seem like such a stretch.
Part of Bitcoin’s appeal is that it is a decentralized currency that is not controlled by any one individual, company, or government. The use of blockchain technology provides transparency by listing every transaction made using the currency. Other major digital currencies that compete with Bitcoin are Ethereum and Litecoin.
As acceptance of Bitcoin has grown, the market price of the digital currency has exploded, increasing over 162% in 2017 according to the infographic. The total market cap of all bitcoins in existence is now worth over $43 billion. Since its debut in 2010, the value of the currency has grown amazingly – an increase of over 878,999 times from 2010 to 2017. Bitcoin was created by the mysterious Satoshi Nakamoto, a ficiticious name used by the currency’s founder, who is thought to own approximately 1,000,000 bitcoins worth $2 billion.
Bitcoins are created as a reward for “mining,” with new blocks of bitcoins “solved” every 10 minutes, leading to approximately 6 new bitcoin discoveries occurring per hour. The number of bitcoins created to reward miners will halve every 4 years until such time as no more bitcoins are left unmined. The total number of bitcoins that will be created is fixed at 21,000,000.
Some governments have already shown an interest in Bitcoin, with Belgium exempting the digital units from value-added tax (VAT) and Switzerland classifying Bitcoin as a “foreign currency.” Thailand banned Bitcoin in 2013, and using Bitcoin is illegal in the following countries:
In the United States, A circuit court in Florida dismissed a case alleging that bitcoins were used in money laundering on the basis that bitcoins were not money according to state regulations.
While they are experiencing a surge in popularity currently, it is too soon to say with any precision what the future holds for cryptocurrencies. As more governments begin to pay attention to such currencies, regulation of their use may follow, which could affect their popularity.
Whatever its future prospects, Bitcoin has certainly made a powerful impression as the first major cryptocurrency. The tremendous interest it has engendered to date, combined with the trend of social interaction increasingly moving online, makes it seem likely that acceptance of currencies which exist solely in the digital realm will continue to grow.
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