Bitcoin is a cryptocurrency, a virtual currency designed to act as money and a form of payment outside the control of any one person, group, or entity, and thus removing the need for third-party involvement in financial transactions. It is rewarded to blockchain miners for the work done to verify transactions and can be purchased on several exchanges.
Bitcoin was introduced to the public in 2009 by an anonymous developer or group of developers using the name Satoshi Nakamoto.
It has since become the most well-known cryptocurrency in the world. Its popularity has inspired the development of many other cryptocurrencies. These competitors either attempt to replace it as a payment system or are used as utility or security tokens in other blockchains and emerging financial technologies.
Launched in 2009, bitcoin is the world's largest cryptocurrency by market capitalization.
Unlike fiat currency, bitcoin is created, distributed, traded, and stored with the use of a decentralized ledger system, known as a blockchain.
Bitcoin's history as a store of value has been turbulent; it has gone through several cycles of boom and bust over its relatively short lifespan.
As the earliest virtual currency to meet widespread popularity and success, bitcoin has inspired a host of other cryptocurrencies in its wake.
References
Frakenfield, J. (2021). What Is Bitcoin? Investopedia.
https://www.investopedia.com/terms/b/bitcoin.asp
Cañada College Library offers online New York Times accounts for all students, staff, and faculty. This includes unlimited access via mobile apps on tablets and smart phones. NYTimes.com accounts are good for one year for eligible Cañada College community members only (current students, staff, and faculty), after which accounts need to be renewed.
Bitcoin’s proponents dream of a financial system largely free of government meddling. But the first time that cryptocurrency became a national currency, it was imposed on an unwilling population by an increasingly authoritarian ruler using a secretive state-run system.
The surprising announcement last month that El Salvador had adopted bitcoin, the world’s largest cryptocurrency, as legal tender caught its population by surprise, and made the poor, conservative Central American nation an unlikely bellwether of a global technological transformation.
The outcome of the uncharted experiment could help determine whether cryptocurrency delivers the freedom from regulation that its proponents envision — or whether it becomes another tool of control and enrichment for autocrats and corporations.
References
Kurmanaev, A., Avelar, B., & Livni, E. (, October 27). Bitcoin Preaches Financial Liberty. A Strongman Is Testing That Promise. The New York Times.
https://www.nytimes.com/2021/10/07/world/americas/bitcoin-el-salvador-bukele.html
The Wall Street Journal is a news source that focuses on business issues but also includes articles on society, politics, and more. Cañada College Library has joined the Wall Street Journal in a collaboration that will provide students, faculty, and staff with direct access to the Journal. You can use your Cañada-sponsored WSJ membership to research topics relevant to your courses and careers, save and share pertinent articles with others, follow companies and industries that interest you, track real-time stories and trends, and follow coverage of arts, culture, and life.
The government of the impoverished Central American nation aims to spend up to $75 million as part of a plan to hand out $30 to people who sign up to an e-wallet called Chivo, or “Cool.” That software-based system would allow an estimated 2.5 million Salvadorans to buy goods or pay for services in U.S. dollars or bitcoin, El Salvador’s two official currencies as of Sept 7.
The foray into bitcoin risks wrecking El Salvador’s $26 billion economy. The indebted nation’s central bank could be forced to spend hard-currency reserves to buy bitcoin if the value of the crypto asset craters and consumers rush to the safety of the dollar. The government can’t print its own money—El Salvador ditched the colón in favor of the greenback two decades ago—and is struggling to earn dollars.
President Nayib Bukele has said that adopting bitcoin will help attract foreign investment, foster more and cheaper financial services and lower the cost of sending and receiving remittances, which reached a high of almost $6 billion last year. The 40-year-old president also wants to lure foreign investors to develop geothermal power from volcanoes to supply the large amounts of electricity needed for mining the cryptocurrency.
References
Perez, S. & Ostroff, C. (2021, August 26). El Salvador Gets Ready for a Risky Bitcoin Experiment. The Wall Street Journal.
https://www.wsj.com/articles/el-salvador-gets-ready-for-a-risky-bitcoin-experiment-11629966845?st=6wf74ll7npm5fcs&reflink=desktopwebshare_permalink
Meet the Expert: Jimmy Song on Why Bitcoin Matters by 
The Promise of Bitcoin: The Future of Money and How It Can Work for You by 
Cryptoassets: The Innovative Investor's Guide to Bitcoin and Beyond by 
