For those reading this article that don't know, Bitcoin is a virtual currency that is not regulated by any government. It has even been compared recently to gold by Peter Schiff of Euro Pacific Precious Metals ( see video below ). In this article we are going to look at the history of Bitcoin as well as whether it would be a good investment to unprofessional investors.
Brief history of Bitcoin as a digital currency
According to Wikipedia.org, "Bitcoin is the first cryptocurrency, a form of money that uses cryptography to control its creation and management, rather than relying on central authorities. However, not all of the technologies and concepts that make up Bitcoin are new; Satoshi Nakamoto (the creator of Bitcoin, see below) integrated many existing ideas from the cypherpunk community when creating Bitcoin.
- ( see http://en.wikipedia.org/wiki/History_of_Bitcoin )
An interesting note: between February 2011 and April 2011 the Bitcoin took parity with the US dollar. At that time 1 BTC was equivalent to 1 US dollar. Later in July 2011 Bitcoin experienced its first "bubble" of $31 dollars, followed by a dramatic price drop back down to $2 dollars. More recently as of November 2013, Bitcoin has raised up to anywhere from $350 - $1,100 in price. Remember, that's 1 BTC compared to x dollars. How incredible!
Bitcoin was made most popular with world-wide news coverage of the rise and fall of The Silk Road. The Silk Road was an online black-market place used to sell anything from fake IDs to drugs and beyond - and shut down on October 1st 2013. According to researchers ( Forbes ), Ulbricht was in possession of apx. 144,000 BTC. That amount of Bitcoin currency translates into around $28.5 million US dollars - the largest seizure of Bitcoins as of the time of writing this article.
What are your thoughts on using Bitcoin as currency? Would it be a good investment, or set to fail? Only time will tell as Bitcoins rise and fall in valuation.
If you enjoyed this article on bitcoin currency, you should check out the Bitcoin Commodity Blog at http://www.commodityblog.com/bitcoin/