What started as a piece of open-source software in 2009 – built by mysterious unknown entity ‘Satoshi Nakamoto’ – 8 years on, Bitcoin has grabbed plenty of headlines. If you’d taken just a £10 punt on Bitcoin back in 2010 you’d now be sitting on over £700,000 profit.
But what exactly is Bitcoin?
Bitcoin – a Cryptocurrency
Put simply, Bitcoin is digital money, a ‘cryptocurrency’ that works using a technology called ‘blockchain’. One of the defining characteristics of cryptocurrency is that it is ‘de-centralised’ – meaning it isn’t tied to a specific location or a central authority like traditional money, instead it exists on the network and is everywhere at once.
One of the reasons this could be revolutionary is that it puts cryptocurrency outside of the control and corruption of governments and banks (In theory). In countries where hyperinflation has made local currency meaningless, there is vast potential for cryptocurrencies like Bitcoin to become a replacement for traditional methods of payment.
Bitcoin is just one of many ‘coins’
Bitcoin is certainly the market leader, but there are thousands of other cryptocurrency coins out there. The vast majority of these will amount to nothing, but Ethereum, Litecoin, Dash, Ripple and NEO are just some of the other coins that people are investing huge sums of money in. It’s already an enormous market which is still growing rapidly. Recent estimates indicate that the market capitalisation for cryptocurrencies stands at $170 billion. A growth of over 850% in the last year alone.
On the 1st January 2017, 1 Bitcoin would have cost you £800. Today, less than a year later, it would cost you over £5000. That’s staggering growth, but what’s behind it? Naturally, there are multiple factors at play, but one reason may be the improved methods available for purchasing it…
Coinbase – Making Bitcoin more accessible to everyone
For many people, a significant barrier of entry to the world of Bitcoin is working out how to actually buy it.
Coinbase – a company founded in 2012, is the world’s most popular website for purchasing and exchanging Bitcoin, Ethereum or Litecoin for traditional currencies.
It’s tremendous success may be down to the fact they have transformed the complicated and intimidating world of cryptocurrency into a simple 3-step process which feels very familiar to users: Sign up, add your debit/credit card, and purchase digital currency. In doing so, they’ve made Bitcoin accessible to the masses.
It’s no surprise then, that to date Coinbase has served over 11 million customers. In July of 2017 it added 1 million new users in just 30 days.
A perfect example of the power and value of a simple user experience
For cryptocurrencies to work, they ultimately require mass adoption. Mass adoption does not happen if it isn’t made accessible and appealing to everyday people.
Bitcoin and blockchain are incredibly complex systems and concepts which will never be understood or appreciated by the general public – unless they are translated and represented in an easily understandable and relatable way.
Coinbase is far from the perfect solution – transferring funds from one wallet to another is still a clumsy process where you could easily make a mistake and lose all of your money.
But it is a step in the right direction.
So much of the focus for cryptocurrencies lies in understanding how they can be regulated (if at all). But for the popularity of digital currencies to grow further, work is also needed to understand how it can be transformed from something that is only understood and used by the very tech-literate, into a simple and viable currency that can be used by all.