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What is bitcoin? Why the digital currency became popular

BITCOIN ($ BTC) was introduced by "Satoshi Nakamoto", alias of a programmer or group of programmers whose motivation for its development was the economic crisis of 2008 - 2009.

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This article was translated from our Spanish edition using AI technologies. Errors may exist due to this process. Opinions expressed by Entrepreneur contributors are their own.

Dmitry Demidko vía Unsplash

It was the summer of 2012 when in my mailbox and news applications I saw occasional headlines mentioning “the digital currency”, Bitcoin , I remember asking my office colleague: “do you think we should invest?” And it was when all the questions we could ask ourselves arose:

  • What is Bitcoin?
  • Where do we buy it?
  • Will it be profitable to invest?
  • What is Blockchain?
  • What is an Exchange?

It would be up to five years later, when I began to answer such questions, as well as many new ones that arose along the way and encouraged me - finally - to fully enter the world of cryptocurrencies , now with income flowing from my own venture , allocating capital to buy my first digital assets.

Now in 2021, as a Trading Ambassador of the most complete Exchange in Mexico and Latin America, I share experiences, analysis and advice with the crypto community for people who, like you, who also ask the questions I had, venture into the world of cryptocurrencies with the highest number of resolved doubts to generate income with these digital assets.

The first cryptocurrency

BITCOIN ($ BTC) had its origin as open source software (Open Source), presented by “Satoshi Nakamoto”, alias of a programmer or group of programmers whose motivation for its development was the economic crisis of 2008 - 2009, specifically the decision to print money for the rescue of banks after the credit and stock market crisis of the real estate bubble.

Bitcoin is known as the first cryptocurrency of the more than 2,000 that exist today, independent of any government authority (decentralization), its production is completely digital, subject to an issuance limited to 21 million Bitcoins .

This means that only 0.27% of the world population could have 1 complete Bitcoin.

Characteristics

  • Relative Anonymity: Each Bitcoin transaction is stored in the chain of blocks ( Blockchain ), a unique, immovable record, characteristics that guarantee both security and availability of information at all times and for cryptocurrencies, it could be considered as the accounting book in the that all transactions of digital assets are recorded. Unlike banks, crypto asset portfolios are not tied to our personal information.
  • Durability : as it is a digital asset, it cannot be physically damaged, altered or broken and it can be kept online forever.
  • Portability : Virtually any sum of money is easy to transport and use because it is a digital asset, either in your physical or digital crypto-asset portfolio.
  • Security : Because it is an encrypted asset, in a decentralized network, nobody can control it. Although all our funds are safe within the Blockchain, a crucial recommendation is that all your passwords, access codes and " passphrase " (sequence of security words) are stored physically in a safe place to reduce the risk of losing them. in a cyber attack.

Bitcoin throughout 2020

Without a doubt, we have all been exposed to more news and publications about Bitcoin on social networks , probably more people within your circle of friends, as well as some of your relatives have joined the world of digital assets.

Weekly chart, Bitcoin price action / Image: Trading View

The road to the all-time record:
  • The Bitcoin price graph shows the fall to key support, generated in November 2018 and exceeded in April 2019. Reaching a maximum of $ 9,214.67 usd and a minimum of $ 3,858 usd and closing the month at $ 6,424.35 usd . In November 2020, the price of Bitcoin not only reached, but exceeded the highest price of all time ( ATH - “ all time high ”), reaching $ 19,915.14 usd on Coinbase, a crypto-asset exchange platform; representing a growth of 415.60% compared to the lowest price of $ 3,858 usd in March.

With the upward trend that began in April, rising more than 14 thousand dollars at the end of November ( + 263.25% ), it has attracted the attention of more and more people, as well as institutions

In addition to the volatility of the cryptoactive, the impact of the current health contingency that forced people to exchange their Bitcoin for cash would generate a 51.82% drop, only in the month of March, taking the price from $ 8,024.38 usd to $ 3,866.11 usd.

In the same month of March, as a measure of action against COVID-19, the United States government would approve economic stimuli and begin the distribution of checks for $ 1,200 usd. And in April, Brian Armstrong - CEO of Coinbase - announced a record in purchases and deposits in exact amounts of $ 1,200 usd. stating that people were using such economic stimulus to invest in Bitcoin and other crypto assets.

In October, PayPal announced that it will offer payments in cryptocurrencies from 2021 and will have a wallet ( Crypto Wallet ) that will allow users to buy, sell and own cryptocurrencies through PayPal applications, with support for crypto assets. such as Bitcoin ($ BTC), Ethereum ($ ETH), Bitcoin Cash ($ BCH), and Litecoin ($ LTC).

On November 17, Ricardo Salinas reveals in a post on Twitter that he has a 10% liquid portfolio in Bitcoin. It is worth mentioning that he has a fortune of 11.8 billion dollars through his interests in retail, banking and media businesses, according to the Bloomberg Billionaires Index.

Bitcoin is trading at over $ 60,000! It would be on December 16 when the price would exceed the all-time high established in 2017, attracting massive attention and would end the year with a price of $ 28,990. creating new highs in January (~ $ 42,000), February (~ $ 58,400) and March (~ $ 61,800), 210.26% growth compared to the maximum established in December 2020. With this, attracting more attention from new investors and traders, as well as of SMEs adopting crypto as a payment method.

Weekly chart, Bitcoin price action, March 2021 / Image: Trading View

Accessibility We Mexicans have more and better options to acquire Bitcoin and other cryptocurrencies. The Exchanges (cryptocurrency exchange platforms) have bet on the Mexican market.

"For years, we have been at the forefront of developments in the blockchain market and have seen the gradual rise of the Latin American market as an important region in this segment. From our perspective, this region, especially Mexico, has a great potential to be the next blockchain hub for years to come. ", Maggie Wu , CEO and co-founder of Mexo.

For his part, Changpeng Zhao , CEO of Binance, says: “There is a great need for cryptocurrencies in Latin America, especially for financial access. We continue to build with our key partner, Settle Network, to bring greater accessibility to cryptocurrency in Latin America and will support additional local fiat currencies in the region in the future. "

The accessibility and parabolic growth that Bitcoin has featured is what has made it normal and more frequent to hear and read about Bitcoin. With the Exchanges' commitment to the Latin American market, the adoption by institutions, SMEs and investors and the growing number of people diversifying their investment portfolio between Bitcoin and other cryptocurrencies, what is your price forecast for Bitcoin? do you already invest in crypto?