RP253 Imaginary Coins

 RP253 Imaginary Coins

What exactly is money? It started out as coins made from valuable metals, like copper or silver. Later it became paper, which was guaranteed by the gold reserves of a national government. Nowadays, that gold is gone and money has become nothing more than a concept. It's valuable because we believe it's valuable, and nowhere is this more evident than in the rise of Bitcoin.

Bitcoin is a digital currency founded in 2009. The idea behind Bitcoin was to create a currency that operates without a central authority. Instead, there's just a peer-to-peer network of Bitcoin users who monitor all Bitcoin deals.

One of the challenges of a decentralized currency like Bitcoin is creating new coins. It's accomplished via a process called "mining." Since Bitcoin is completely digital, new coins are created using computers. Huge computer setups work night and day to solve complex math problems. Once the problem is solved, new coins are awarded. To control the total amount of currency that's out there, these problems are getting harder and harder. Back in 2009, you could mine for Bitcoin with a personal computer. Nowadays, mining requires expensive hardware and huge amounts of electricity.

To get rolling with Bitcoin, you'll first need a digital wallet. It will come with two sets of "keys," which are long strings of letters and numbers. The public key is like a bank account number. It's out there for anyone to see. The private key on the other hand is like a bank password. It can be used to make payments to another party.

Like any other currency, Bitcoin carries some risk. Simply put, if individuals and businesses stop accepting it, it will lose its value—and fast. However, Bitcoin does have some unique advantages. For one, the amount of total Bitcoin will never change. Just like real gold, there is a fixed amount that can ever be mined. This means that the more people believe in Bitcoin, the higher the value of the currency. So the secret to getting rich with Bitcoin? Not only to believe in Bitcoin yourself, but to make others believe in it too!