Bitcoin history is directly tied in with the global financial system, with its value being derived from huge, arguably reckless, changes to the financial status quo. The initial creation of Bitcoin and indeed, many other crypto currencies, was in a rebellious response to the 2008 financial crisis.
Harry Hamburg, a crypto currency expert and editor for coinconfidential.com, explained how Bitcoin was initially created: “Following the 2008 financial crisis, the UK government slashed interest rates from five percent to 0.5 percent – which is why you now earn nothing on your savings – and printed £200billion.
“Did you see any of that £200billion? No. It went to the very financial institutions that caused the crisis in the first place. They invested it in assets like stocks and property, which pushed up prices.
“So the rich, who could buy those assets, got richer. And ordinary people got poorer. They earned lower wages and had no way to make money on their savings. Bitcoin flips this dynamic on its head.”
“It was created in 2009, by an anonymous computer coder called Satoshi Nakamoto, as a new form of money that didn’t need banks or Governments to work.”
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Since initially launching, Bitcoin has emerged to be a new investment asset akin to bonds, shares or commodities for many investors.
While its price can be much more volatile than other assets, many believe it to be a key part of diversification and future financial planning.
On the flip side of this, Bitcoin is seen by many regulators, Governments and central banks to be nothing more than a conduit for fraudsters and it has continuously faced pushback and calls for regulation.
While crypto investing can be a complicated field which should not be entered lightly, Harry went on to detail there are only two things consumers need to know about Bitcoin which explains it’s value and interest:
There will only ever be 21 million Bitcoin in existence
New shares can be issued and more cash can be printed but it is not possible to create anymore Bitcoin, which has a direct impact on its value, as Harry explained: “No one can make more Bitcoin, no matter how much they may want to.
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“This makes it scarce, like gold. If a government wanted to prop up its economy with Bitcoin, it couldn’t just print it.
“It would have to buy it from people who already own it. And this would push its price up.”
It is “decentralised”
Harry moved onto the other key element of Bitcoin which makes it tempting for those who mistrust the current financial system: “This means it isn’t controlled by a ‘central’ authority, like a bank or Government.
“The Bitcoin network is powered by the people who use it.
“It allows you to exchange money with…
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