The world’s largest cryptocurrency has broken records after it reached $8000 per Bitcoin for the first time. Bitcoin has been a topic of conversation since its release in 2008, however now more so than ever.
South Africans can now purchase one Bitcoin for a whopping R112 923.21.
We take a look at Bitcoin’s history this year as well as Bitcoin Cash and its threat on Bitcoin.
2017- The Year Of Bitcoin
Since the beginning of the year, investors around the world have suddenly gained interest in the cryptocurrency. In September this year, one coin was selling for anything between R32 000 – R35 000.
In just two months, these figures have almost tripled due to high demand.
Although Bitcoin is currently sitting at an excellent place right now, many people have had their doubts. Throughout the seven years of the online currency’s existence, it has been known as a ‘bubble’.
The reason for this is because the price fluctuates so much and many believe that eventually it will pop and Bitcoin will be a thing of the past.
This is still a myth as it is still going strong and has, for the past few years, proven investors wrong.
Throughout the year, Bitcoin has been a bit of a risk for investors as it has experienced three separate slumps of more than 25% in value.
In early September, a Bitcoin was going for $5 000 until China threatened to ban Bitcoin and other cryptocurrencies. The cryptocurrency suddenly plunged by 40% to below $3 000.
Is This Currency Under Threat?
Although Bitcoin has proven to be the most popular cryptocurrency, there are various factors that might, in the future, threaten their existence.
These transactions are known for being very slow. One can compare the theory of Bitcoin with that of transaction sites such as PayPal and Visa.
According to an article by Investopedia, Visa processes over 150 million transactions per day. That means that on average, 1 700 transactions are processed per second.
These are very different figures for the cryptocurrency giant. They can process seven transactions per second. It will take ten minutes for the transactions to be fully processed.
The more users making transactions, the longer it will take for transactions to be processed. This is where Bitcoin’s pitfalls come in.
What Is Bitcoin Cash?
Bitcoin Cash(BC), a direct threat to the original Bitcoin, has lower transaction costs as well as fast speeds. Bitcoin Cash was started in August 2017 by Bitcoin miners and developers.
Like Bitcoin, BC is a peer-to-peer electronic transaction service, however they will soon be able to compete with PayPal and Visa.
According to Investopedia, “BC increases the size of blocks, allowing more transactions to be processed.”
Blocks refer to files of data that is permanently recorded. A block can be compared to a ledger or a record book. “Each time a block is ‘completed’, it gives way to the next block in the block chain. A block is thus a permanent store of records which, once written, cannot be altered or removed. “
These block chains help users track their transactions and keep a record of their transaction history, however each transaction is recorded in a block.The transaction speed of BC is much faster than the original Coin, at 8mb, as opposed to 1mb.
Are you going to be purchasing Bitcoin?