What are Bitcoins? What are worth for? How do they work? What about Blockchains technology? What did it come for and what are its possibilities in the future? Understand how cryptocurrency and new technology can transform the world as we know it and facilitate some processes.
Bitcoin is a virtual currency that emerged in 2009, which can be bought and sold by traditional currencies. But unlike them, Bitcoin doesn’t have an entity like the government to regulate its operations, in fact, it does it through an open network of connected computers that verify and secure transactions.
For Bitcoins to exist, it was necessary the emergence of a technology called Blockchain. It is a secure, immutable, transparent and decentralized medium for cryptocurrency transactions.
Understand How Blockchains Work
The tool enables the transaction and transfer of currencies as Bitcoins from one end to the other. It records the amount of coins transacted and information about who sent it, who received it, and when this transaction was made. All this data is stored in blocks, marking each block with a time and date stamp. At each period of time, a new transaction block is formed that is linked to the previous one.
This block system gave rise to its name. In order to validate the transactions that are made in Blockchains, it is necessary the verification and approval of several computers. The miners do this work, they earn Bitcoins in exchange for that. Bitcoin can either be acquired this way or it can be purchased by people on global exchanges.
Bitcoin
Bitcoin is a virtual currency that has increased in value over time, but is still not used as much because many people do not understand how it works. Besides it, there are other currencies, such as Primecoin, Dogecoin and Litecoin. But without a doubt, Bitcoin is the most popular.
These coins, despite being virtual, have real values and a good part of them is generated as a form of reward for users who verify transactions, which are time-consuming and demand great processing power. This process is called mining.
Data Mining
Mining is done through the verification of Bitcoin transactions, and for this it is necessary that a certain percentage of computers do this verification for the transactions to be validated. This process forms a block, which once completed, is rewarded with a certain number of coins, Bitcoins. Miners receive coins for this work, which currently has a market value of $48,504.
There is fierce competition in this process, because a large number of computers can work on a single block at the same time and the chance of a miner earning the entire reward alone is very small, it depends on a large amount of computational power. But without a doubt, if any one of them wins all the reward, they will have a lot of money.
There is something called “mining pools” or in Portuguese, “mining pools” that are a way to improve the chances of a group or “pool” of people pooling their computing resources. In this process, the resulting coins are shared among the members and they usually end up earning more than they contribute. To carry out this mining work, a lot of computational power is needed, and people use some alternatives to increase it, namely:
- Dedicated hardware – Some people make use of their dedicated hardware to perform mining and this process is expensive, uses a lot of light and is not always worth the value that is gained.
- ASIC –Name of small hardware processors that are specifically designed for mining. Unlike dedicated hardware, they use less electricity, and perform well at a lower cost.
- Cloud Computing –The cloud works by offering benefits similar to those of a dedicated machine, but generally it has a lower cost.
Understand the benefits of using a virtual currency:
- It is a global currency, that is, you can use it in different parts of the world to purchase goods or services;
- It does not generate fees imposed by banks or governments, as it is decentralized;
- With it, it is possible to make purchases and transactions almost anonymously, without providing so much personal data;
- With your system it is almost impossible to generate fake money.
Future of virtual currencies
Bitcoin is a currency that is already being accepted and used as a form of payment in several places. Today, this coin has an expressive value and those who invested in it some time ago did well. It will increasingly be used as a way to get rid of bank fees, as a way to make transactions around the world securely.
Speaking now about Blockchains, this is a technology that has the potential to transform not only our money transactions, but our health as well. Yes, health, because with its block system that stores data from other blocks, it ensures that the information is immutable, making it very difficult to violate them.
In the health system, there is a problem with patients’ medical records, as once registered, it is not possible to modify them. And health professionals suffer without knowing where to place their medical records, because there is no guarantee that they will not be modified. With Blockchains technology, every block, every record is guaranteed not to be modified. Thus, the record can be anywhere in the world with Blockchains. So this is a trend for the coming years.
In an increasingly virtual and globalized world, Bitcoin and Blockchains are opportunities for people to relate, buy and store information in a different way. Blockchains actually encompasses this entire mining process with Bitcoins.
After reading all of this, I imagine you’re wondering if it’s time to start investing in Bitcoins, if it’s really a trend. Below we show the evolution of the price of Bitcoins during its 12 years:
| Ano | R$ | US$ |
| 2010 | 0,34 | 0,23 |
| 2011 | 6,8 | 3,3 |
| 2012 | 23,9 | 11 |
| 2013 | 485 | 203 |
| 2014 | 890 | 338 |
| 2015 | 1237 | 310 |
| 2016 | 2350 | 697 |
| 2017 | 21950 | 6434 |
| 2018 | 23800 | 6303 |
| 2019 | 37100 | 9150 |
| 2020 | 70405 | 13816 |
The rate of growth and appreciation of cryptocurrency over the years is surprising. It suffered few falls and the trend is for it to continue growing more and more. Knowing this, it is easier to decide whether or not to join this new way of doing transactions.