Today we’re going over 5 things you should know about Bitcoin and cryptocurrencies. You’ve probably all heard of it, but let’s start over with this little video, the script of which you can find below.
What is bitcoin
Bitcoin is a cryptocurrency or in other words a digital currency. Therefore, you cannot hold bitcoins in the form of coins or banknotes. Everything is, for example, on your computer, mobile phone or USB stick. Bitcoin was premiered on January 3, 2009 by Satoshi Nakamoto.
Satoshi Nakamoto is the pseudonym used by the person who developed Bitcoin. And yes ! There are great doubts about the identity of the creator (s). He would have claimed in a forum that he was Japanese, but you won’t find anyone by that name in Japan. We even doubt his Japanese nationality given the quality of his English and the complete lack of publication in Japanese!
More Why create a digital currency? if we already have all the means of payment to pay in dollars? We have banknotes, coins and can even make small transfers between friends using our phone. But what was going through our friend Nakamoto’s mind?
To answer this question, we need to quickly return to the principle of the current currency. The value of our currency is based on the trust we have in it. Our currency is managed by the European Central Bank.
Satoshi Nakamoto completely rejects this system and wishes for Bitcoin to be created End the traditional money mechanism that is eating up the purchasing power of citizens!
An important characteristic of Bitcoin is its decentralized operation. Bitcoin is actually out of the system. This is where Bitcoin differs from the Euro because it is System is not regulated and only belongs to its users! In addition, Bitcoin is dependent on a global user community. In other words, Bitcoin is transnational and is therefore not influenced by the local economic situation. Kind of like gold.
As you will understand, Bitcoin presents many things in common with gold, recognized worldwide as a safe haven par excellence. Why ? The price of gold depends mainly on the quantities available on earth. Since supply is limited, the prospect of an increase in the price of gold is almost guaranteed. Bitcoin takes up this concept of scarcity, but digitally. In fact, it was planned from the start that there would be none that around 21 million Bitcoin are in circulation. According to studies, the last bitcoin is to be mined October 2140!
Bitcoin is based on technology la blockchain. This is Information storage and transmission technology without control body. From a technical point of view, the blockchain is a distributed database in which the information transmitted by the users is verified and combined into blocks at regular intervals. These blocks are linked and secure through the use of cryptography this is how a chain of blocks is formed: the famous blockchain. So we are in the presence of a distributed system and very difficult to hack. Put simply, the goal of blockchain is Remove middleman: for example the banks, which act as intermediaries for our financial transactions.
The actors participating in the validation of the blocks of the blockchain are rewarded in Bitcoin. This is known as bitcoin mining. But mining Bitcoin can be energy intensive. Plus, everything looks rosy in the best of all possible worlds, but what are the criticisms of Bitcoin and other cryptocurrencies?
According to Bill Gates, it uses Bitcoin more power per transaction than any other method known to man. To back up Bill Gates’ words, Alex de Vries, a data specialist at the Dutch central bank, estimates that every Bitcoin transaction is generated on average 300kg carbon dioxide (CO2), or the carbon footprint equivalent of around 750,000 Visa cards.
To compound the problem, the mining networks are largely based in China, which gets much of its energy from fossil fuels like coal, and as cryptocurrencies become more popular, its energy consumption has increased by a factor of 10 since 2017!
So here we have a technology that is unsuitable for our present, but fully tailored to our future: living in a world of renewable energies!
Another criticism of Bitcoin that is often brought up by governments and that Bitcoin offers a certain amount of anonymity, some of them took advantage of shady activities such as money laundering. To respond to this criticism, some governments are considering introducing their own cryptocurrency, However, this contradicts Satoshi Nakamoto’s original idea of having a currency managed by its users and not by third parties.
And what about Elon Musk in all of this?
Elon Musk has often been the source of happiness or bad luck in crypto lately. His company, Tesla, first made the change by announcing in early February that it had bought for Bitcoins worth $ 1.5 billion and accept cryptocurrency as a means of payment for its electric cars. But in mid-May, the rowdy leader gave in: He tweeted that Tesla would now reject Bitcoin payments because of the alleged environmental impact of mining cryptocurrencies.
The passion for cryptocurrencies is what makes it all extremely volatile assets! It can be true that investing in cryptocurrencies can increase your capital. But we must not forget that the euphoric movements are often accompanied by panic movements. Indeed, Bitcoin is rose from USD 60,000 to around USD 35,000 in a few days. This movement generated panic the bankruptcy of thousands of accounts.
So if you want to invest Try not to invest the money you need expect some roller coasters, Find out about the projects you want to invest in and especially, try not to use leverage which could multiply your risk and make you more susceptible to any panic movement.
It was just a small overview of cryptocurrencies so I’ll meet you soon for a next video on JV.