Bitcoin Explained in Plain English
The rise in popularity of Bitcoin in the Philippines is slow and eventual. First developed by an unknown computer scientist in 2008, the cryptocurrency is now the flagship amongst its discussions in media left-and-right. A lot of Filipinos wants to get in on it, to take a piece of the “virtual” pie. But only a few understand it, which is why I rounded up everything I know about the digital currency and created this nifty guide written in plain English.
As a quick disclaimer: though I maintain a bitcoin wallet, I don’t necessarily actively trade bitcoin. The information below is essentially a neat summation of all info readily available upon research, peppered only with my own personal insights about the currency. Like you, I’d like to be an eager student of the subject, so let’s make this a learning experience and exchange thoughts and ideas kindly, be it in the comments or in social media.
With everything finally out of the way, let’s get on with our plain English explainer.
What is Bitcoin?
Bitcoin is internet money. As such, it has value and can be used when buying products and services. However, at the moment, only few merchants take bitcoins. Therefore, people mostly use bitcoin for trading, hoping to buy them at low prices and sell them at high prices. Think of it as literal gold on the internet.
How does Bitcoin work?
Originally, Bitcoin is proposed as a digital currency meant to cut out the “middlemen” in spending—banks and financial institutions. Satoshi Nakamoto, the pseudonymously named developer who authored Bitcoin, imposes the use of a public ledger called “the blockchain” that theoretically makes transactions faster and more transparent.
Is Bitcoin really money?
Well, some argue otherwise. And it’s hard to turn away from those arguments. Bitcoin is hard to sustain and isn’t ideal for smaller purchases. And when it’s used for bigger transactions, traders and/or buyers usually won’t push through without some form of considerable insurance. It is for these reasons that pundits refuse to recognize Bitcoin as “currency” and call it, instead, a “volatile digital asset”.
Is Bitcoin a safe investment?
The short answer is no. Because Bitcoin has no all-governing institution or nation regulating it, its value tends to go up and down ridiculously. This week its value may be placed at $17K, the next week it could plummet down to $2. What’s worse, no one knows if it stays or it goes. The bottom line: Bitcoin, at the moment, is in a position where those who wish to invest are required to play high-risk-high-reward gambles.
Is it still practical to mine Bitcoins?
The short answer is no, still. If you ask this question 3-5 years ago, the answer would be a resounding yes. But as things stand, mining Bitcoins nowadays will get you only a measly amount compared to what you would have gotten years ago. It’s advisable, too, that you explore possibilities with other cryptocurrencies like Ethereum. However, if you wish to go through with crypto-mining, Austin Evans made an informative video on how to do it.
How do I start using Bitcoins?
You can start using Bitcoins by securing a wallet. In the Philippine setting, Coins.ph is probably the best and the most reliable. The platform—which comes in the form of an Android/iOS app—also allows you to buy and trade Bitcoins.
There’s no denying that cryptocurrencies are going to stick for a little while and that Bitcoin is its granddaddy we’re all focused on. While no one knows its future for sure, it’s good to keep ourselves educated. As such, should you have questions, feel free to drop them in the comments below. I’d be happy to answer all of them to the extent of my knowledge. Inversely, if you have anything to share about Bitcoin, I encourage you to enlighten our readers by sharing them in the comments section.