If you’ve been following the news lately, you’ve no doubt heard the term “Bitcoin” thrown around fairly often. So what exactly is it? Simply put, Bitcoin is a digital currency that exists solely in cyberspace. It was created in 2009 by mathematician Satoshi Nakomoto, a man so elusive and enigmatic that many doubt his very existence. Bitcoin is traded, generated, and stored on a peer-to-peer network using virtual wallets for each user. The rate and overall number of Bitcoins generated is limited, making it free from the perils of inflation that plague traditional official currencies. Bitcoin has been gaining in popularity, circulation, and media coverage of late, and while the number of businesses willing to accept it is growing, many people remain skeptical of its value and stability.
In his 2009 paper Bitcoin: A Peer-to-Peer Electronic Cash System, Satoshi Nakomoto describes one of the main benefits of using Bitcoin: the elimination of the need for third-party verification of online transactions. Currently, most online purchases involve both parties disclosing a certain amount of information to a bank or financial institution to ensure that everything is fair and fraud free (a service that usually includes a fee). The Bitcoin protocol is set up to make fraud during a transaction prohibitively difficult while allowing both parties to remain anonymous. This ostensibly means that deals are made person to person with no intermediate arbiter. One analogy that is often used to describe Bitcoin transactions is that they are much like sending an email from one person to another (sans NSA snooping). This is an apt comparison because during each Bitcoin exchange, the buyers and sellers have their own “address” for that particular transaction. Each transaction can be assigned a unique address, making it almost impossible to trace the spending patterns of one particular user. Because Bitcoin is operated on a peer-to-peer network, transactions are visible to everyone, but the details of said transactions are hidden from all but the parties involved.
Bitcoin is generated by computers that solve mathematical problems that increase in difficulty as a function of the number of Bitcoins in circulation. Any user may set up their computer to generate Bitcoin, a process referred to as “mining.” According to Nakamoto, this process is yet another deterrent to theft, as the amount of computational power required to steal Bitcoin from another user could be better served mining Bitcoin legally.
Despite its rather rapid rise in value, most experts still classify Bitcoin as a risky investment. While the value has reached over $700 USD per Bitcoin as of this writing, the Bitcoin market has not been without its ups and downs. After reaching an all-time high of $1240 in early December, the Bitcoin market plummeted below $400 per coin amidst new regulations by Chinese banks that make buying and selling Bitcoin in the country extremely difficult. China has been at the forefront of the Bitcoin revolution and is home to several of the world’s largest and most active Bitcoin exchanges. Although the currency recovered much of its value in the few days following the “crisis,” many critics point to this incident as proof of Bitcoin’s vulnerability. While Bitcoin has been billed by many as a currency that is beyond the reach of any central government or authority, these recent events might suggest otherwise.
Whatever the case, both excitement and controversy surrounding Bitcoin are at an all-time high. There is no doubt that Bitcoin as it currently stands holds real and significant value. Bitcoin has been used to purchase everything from cars, to mansions, to tickets to outer space. Many prominent business owners have come out in favor of Bitcoin, such as Virgin CEO Sir Richard Branson and Overstock.com CEO Patrick Byrne, who said: “Money is too important to be left in the hands of government officials.”
It comes as no surprise that those who are opposed to Bitcoin stand to lose the most from its adoption. Several major banks and governments have labeled Bitcoin as “not real money” and have warned against the inherent dangers of dealing with currency that is unregulated and anonymous. Despite the checks and balances built into the Bitcoin protocol, there have been reports of Bitcoin theft, as well as the use of Bitcoin for illegal purposes.
The United States government has taken a somewhat neutral stance on Bitcoin. During a November 18 hearing on virtual currency, many expressed a desire to understand the pros and cons of Bitcoin, but remained wary of its potential for abuse if left unregulated. This in spite of the fact that the FBI is suspected to be in possession of one of the largest Bitcoin fortunes in existence after seizing more than 144,000 BTC ($90 million USD) from Ross Ulbricht, alleged administrator of the illegal drug website Silk Road.
As with most issues, economists remain divided on the future of Bitcoin. Some believe that an eventual burst of the Bitcoin bubble will cause the value to drop to almost nothing, while others think it has potential to be a significant contender for a global currency.
It’s definitely worth keeping on your radar as we enter 2014.
Kama umekuwa kufuatilia habari hivi karibuni, wewe bila shaka kusikia neno "Bitcoin" kutupwa karibu mara nyingi. Kwa hiyo ni nini hasa? Kwa ufupi, Bitcoin ni sarafu ya dijiti ambayo ipo tu katika cyberspace. "Mwanamume huyo, Satoshi Nakamoto, aliandika kitabu chake cha ""Mwanamke wa Kihispania"" mwaka 2009 na alisema kwamba ""mwanamume huyo ni mtu asiyeeleweka na asiyeeleweka sana hivi kwamba wengi wanashuku kuwapo kwake.""" Bitcoin ni kuuzwa, zinazozalishwa, na kuhifadhiwa juu ya peer-to-peer mtandao kutumia mikoba virtual kwa kila mtumiaji. Kiwango na jumla ya idadi ya Bitcoins zinazozalishwa ni mdogo, na kuifanya kuwa huru kutoka kwa hatari za mfumuko wa bei ambao unashambulia sarafu za jadi rasmi. Bitcoin imekuwa kupata katika umaarufu, mzunguko, na chanjo ya vyombo vya habari ya marehemu, na wakati idadi ya biashara tayari kukubali ni kuongezeka, watu wengi kubaki shaka ya thamani yake na utulivu. Katika makala yake ya 2009 Bitcoin: Peer-to-Peer Electronic Cash System, Satoshi Nakamoto anaelezea moja ya faida kuu ya kutumia Bitcoin: kuondolewa kwa haja ya uthibitisho wa mtu wa tatu wa shughuli za mtandaoni. Kwa sasa, ununuzi wa mtandaoni unahusisha pande zote mbili kufichua kiasi fulani cha habari kwa benki au taasisi ya kifedha ili kuhakikisha kwamba kila kitu ni haki na bure udanganyifu (huduma ambayo kwa kawaida inajumuisha ada). Mkataba wa Bitcoin umewekwa ili kufanya udanganyifu wakati wa shughuli kuwa ngumu sana wakati kuruhusu pande zote mbili kubaki zisizojulikana. Hii inaonekana inamaanisha kwamba mikataba hufanywa kati ya mtu na mtu bila mpatanishi wa kati. Mfano mmoja ambao hutumiwa mara nyingi kuelezea shughuli za Bitcoin ni kwamba ni kama kutuma barua pepe kutoka kwa mtu mmoja kwenda kwa mwingine (bila NSA snooping). Hii ni kulinganisha sahihi kwa sababu wakati wa kila kubadilishana Bitcoin, wanunuzi na wauzaji kuwa na yao wenyewe <unk>anwani<unk> kwa ajili ya shughuli hiyo maalum. Kila shughuli inaweza kupewa anwani ya kipekee, na kufanya iwe vigumu kufuatilia mifumo ya matumizi ya mtumiaji mmoja maalum. Bitcoin ni mtandao wa Peer-to-Peer, na shughuli zote zinaonekana kwa kila mtu, lakini maelezo ya shughuli hizo hufichwa kwa kila mtu isipokuwa kwa wahusika. Bitcoin ni kompyuta ambayo hutengeneza matatizo ya hisabati ambayo huongezeka kwa ugumu kama kazi ya idadi ya Bitcoin katika mzunguko. "Mtu yeyote anaweza kuweka kompyuta yake ili kuzalisha Bitcoin, mchakato unaojulikana kama ""uchimbaji,"" kulingana na Nakamoto, mchakato huu ni kizuizi kingine cha wizi, kwani kiasi cha nguvu ya kompyuta inayohitajika kuiba Bitcoin kutoka kwa mtumiaji mwingine inaweza kutumika vizuri zaidi kwa kuchimba Bitcoin kisheria." Licha ya kuongezeka kwa thamani yake kwa kasi, wataalamu wengi bado wanataja Bitcoin kama uwekezaji wenye hatari. Wakati thamani imefikia zaidi ya $ 700 USD kwa Bitcoin, soko la Bitcoin halikuwa bila ups na downs zake. Baada ya kufikia kiwango cha juu cha wakati wote cha $ 1240 mwanzoni mwa Desemba, soko la Bitcoin lilishuka chini ya $ 400 kwa sarafu katikati ya kanuni mpya za benki za China ambazo hufanya ununuzi na uuzaji wa Bitcoin nchini kuwa ngumu sana. China imekuwa katika mstari wa mbele wa mapinduzi ya Bitcoin na ni nyumbani kwa kadhaa ya dunia kubwa na kazi zaidi Bitcoin kubadilishana. Ingawa sarafu ilipata thamani yake katika siku chache baada ya "mshuko", wakosoaji wengi wanataja tukio hili kama uthibitisho wa udhaifu wa Bitcoin. Ingawa Bitcoin imekuwa billed na wengi kama sarafu ambayo ni nje ya kufikia ya serikali yoyote ya kati au mamlaka, matukio haya ya hivi karibuni inaweza kupendekeza vinginevyo. Kwa vyovyote vile, msisimko na utata unaozunguka Bitcoin uko kwenye kiwango cha juu kabisa. Hakuna shaka kwamba Bitcoin kama ilivyo sasa ina thamani halisi na muhimu. Bitcoin imekuwa kutumika kununua kila kitu kutoka magari, kwa mansions, kwa tiketi kwa nafasi ya nje. "Wamiliki wengi wa biashara maarufu wamekuja kwa niaba ya Bitcoin, kama vile Mkurugenzi Mtendaji wa Virgin Richard Branson na Mkurugenzi Mtendaji wa Overstock Patrick Byrne, ambaye alisema: ""Pesa ni muhimu sana kushoto mikononi mwa maafisa wa serikali." Benki kadhaa kubwa na serikali zimeorodhesha Bitcoin kama "sio pesa halisi" na zimeonya dhidi ya hatari za asili za kushughulika na sarafu ambayo haidhibitiwi na haijulikani. Pamoja na udhibiti na usawa uliojengwa katika itifaki ya Bitcoin, kumekuwa na ripoti za wizi wa Bitcoin, na vile vile matumizi ya Bitcoin kwa madhumuni haramu. Serikali ya Marekani imechukua msimamo wa kiasi fulani wa kutokuwamo juu ya Bitcoin. Wakati wa kusikilizwa kwa Novemba 18 juu ya sarafu ya virtual, wengi walionyesha hamu ya kuelewa faida na hasara za Bitcoin, lakini walibaki kuwa na wasiwasi juu ya uwezekano wake wa unyanyasaji ikiwa hautawaliwa. FBI inashukiwa kuwa na moja ya mali kubwa zaidi ya Bitcoin baada ya kukamata zaidi ya BTC 144,000 kutoka kwa Ross Ulbricht, msimamizi wa tovuti ya dawa haramu ya Silk Road. Kama ilivyo na masuala mengi, wachumi bado wamegawanyika juu ya siku zijazo za Bitcoin. Baadhi ya watu wanaamini kwamba mlipuko wa Bitcoin utafanya thamani yake iondoke hadi karibu hakuna, wakati wengine wanafikiri ina uwezo wa kuwa mshindani mkubwa kwa sarafu ya kimataifa. Ni dhahiri thamani ya kuweka juu ya rada yako kama sisi kuingia 2014.