How Blockchain Works in Cryptocurrency

Yes. It can be used to buy and sell goods and services. Because of its limited use as money and because of its slow transaction time and high fees, many “experts” and bankers refrain from calling it money and do not consider it a currency.

But that doesn’t mean much. People in Venezuela and Zimbabwe have been using Bitcoin as money since their national currencies have collapsed. People in the US have found limited adoption and are able to use it as money on e-commerce platforms like Overstock. Other companies are experimenting with implementing Bitcoin as money.

Was Bitcoin created by criminals to launder money? No one knows the identity of Bitcoin’s alleged creator, Satoshi Nakamoto, who has claimed authorship of the original Bitcoin white paper, first published in October 2008.

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Nevertheless, a popular narrative about its creation is that it was made by criminals for criminal activities. Many believe that Bitcoin was in fact created as a response to the financial crisis of 2007-2008, when big banks were bailed out while people lost their homes through foreclosure. It was a time when average citizens become disenchanted with derivates, bank loans and other traditional investment instruments invented by the banking system that led to high inflation, bubbles and epic bursts.

But isn’t Bitcoin used by criminals?

Yes. Bitcoin has been used by criminals for criminal activity. Silk Road is the prime example. But long before Bitcoin and Silk Road, there was Enron, Bernie Madoff, Michael Milken and other high profile corporate criminals. Swiss bank accounts and the Canary Islands, among other destinations, have a long history of helping the rich hide their money or aiding criminal masterminds with their nefarious dealings. Before Bitcoin, there were wars, ransoms, kidnappings, drug epidemics, bank robbers and tax evaders. People are people, and they can do awful things. But they are not the technology or the tool itself, which can be beneficial. Phones, for example, are and have been used by criminals to hatch plans.

Is Bitcoin a good investment?

Bitcoin is a volatile investment with the ability to go to zero, like every other fiat currency. Bitcoin hodlers have seen their holdings soar and then plunge. It’s a wild ride.

But how can I spend it for pizza if the price of it keeps changing?

Right – it doesn’t make sense. But that’s how it works. You may buy a slice of pizza with Bitcoin in 2018, only to discover in 2019 that the price you paid for that pizza was ludicrously expensive. That’s if Bitcoin goes up. It could go down.

Is Bitcoin slow?

Bitcoin transactions can be exceedingly slow. Critics point out that it can process only seven transactions per second. Visa handles about 2,000 transactions per second. To address its slow transaction speeds, developers are working to implement improvements, such as The Lightning Network which is designed to move small amounts of Bitcoin at lightning speed.

Who made Bitcoin?

Some anonymous person or group of people called Satoshi Nakamoto.

Is Bitcoin a cult?

Cults are often defined as entities that attract devout followers who share a belief system and who remain emotionally invested in a mission, concept or idea. Critics often point out that Bitcoin has reached cult status because you can’t hold it. It’s just some fluffy puffy stuff out there in the cloud. Under this definition, we’d find every religion that shares a belief in God. Critics also note that Bitcoin isn’t backed by a nation state. You don’t need a passport to join in the craze. Ditto with the internet.

Is Bitcoin a hedge?

Bitcoin is largely considered to be too volatile to be a reliable hedge against stock-market moves, for example. At the same time, if an economy collapses, and people continue to trade Bitcoin, it could be a hedge against local currency.

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