Bitcoin turning ten was nothing to write home about after its value dropped from $20,000 in December 2017 to a heartbreaking $6,320 in just 10 months.The cryptocurrency started the year strong at $13,500 and has been down ever since.
Bitcoins are a digital currency and an alternative to fiat currencies such as the US dollar.It has served as a way for people to exchange money without a regulatory middle man.Bitcoin relies on cryptography which uses hidden codes to communicate. Users can make transactions directly under pseudonyms taking away power from banks and governments and it is not controlled by a central banks.
Bitcoins coins are created through a process called mining which requires powerful computers to solve complex math problems. Nakamoto(a pseudonym)mined the first block of bitcoin which generated 50 bitcoins in 2008 after the economic .Little is known about the creator however Nakamoto is a pseudonym and even a decade later it’s still unclear what exactly that is.
Nakamoto’s system only allows a fixed number of coins to be created there’s a limit of 21 million bitcoins.To get a bitcoin each problem takes 10 minutes to solve and creates a predetermined number of coins. The number that is awarded for solving each problem dwindles as time goes on.
In 2014 Overstock became the first major US retailer to accept bitcoin. Companies such as Expedia,Microsoft,Dell,Newegg and Starbucks have followed in its footsteps.In Nairobi,some city shops and restaurants are allowing customers to pay for goods and services using the digital currency.
A recent report by Citibank analysts said that Kenyans have accumulated holdings of bitcoins estimated at more than Sh163 billion which could cause widespread disruption to the economy were the virtual currencies to collapse.Most customers trade in bitcoins and from the proceeds businesses make online purchases with ease.