[스낵인포] Bitcoin, should I buy it now? What is Bitcoin…

Bitcoin price is breaking the highs every day. As the price of Bitcoin increases, interest in cryptocurrency is also growing. Bitcoin, Ethereum… These days, it’s just a matter of turning your head, so I’ve heard a lot of people around me, but when you want to invest in such a virtual currency, what is this, is it safe? From now on, I will explain what virtual currency is using Bitcoin as an example.

Bitcoin is the first word that comes to mind when it comes to virtual currency. Maybe Bitcoin is more familiar than the word virtual currency. Although it has become a representative cryptocurrency now, it has been only 10 years since Bitcoin first appeared. 1 November 2008. A person with the pseudonym Satoshi Nakamoto, who is still unknown, publishes a nine-page paper titled’Bitcoin, P2P Electronic Money System’ on the Internet. In this paper, Satoshi Nakamoto proposed a very innovative monetary system and the technology that makes it possible. He explained that this currency cannot be tampered with or counterfeited, does not require any personal information, and yet has complete transparency in transactions. What does this mean?

First, let’s look at the current financial system. Currently, all financial transactions that we exchange money between individuals, save in banks or take loans are kept on our servers. Since all the information is on the bank’s server and not elsewhere, this server should never be hacked. Banks are costly to enhance security and back up. However, Satoshi Nakamoto’s thesis proposed blockchain technology. Blocks containing currency transaction information are shared by everyone, and it is impossible to take out or manipulate only one of them if it is chained. So, the theory is that using this blockchain technology, you can make secure and transparent transactions without centrally controlling the details. Technology in which everyone has information without central control. This is the core of Bitcoin. In fact, this also touches the background of Bitcoin.

The aforementioned’Bitcoin, P2P Electronic Money System’ This paper was published shortly after Lehman Brothers, an American investment bank that caused the global financial crisis, went bankrupt. As the financial crisis hit at the time, the U.S. government lowered interest rates and launched quantitative easing to free money on the market. Naturally, there was inflation in the market where the value of money fell. I can’t believe the currency that the government or central bank can raise and degrade in value. Bitcoin was born like this when we created an ideal currency that allows safe transactions between individuals without government or central bank intervention.

Bitcoin doesn’t keep coming out indefinitely, it’s programmed to issue just 2 million. And it is known that more than 16 million, 80% so far, have already been released. There are many opinions about when Bitcoin mining will end, but it is a little difficult, but I will explain in detail. Bitcoin is designed to have a reward half-life each time the 210,000th block is formed. From 2020 through half-life, 6.25 bitcoins are rewarded per block. Since 1 block is formed every 10 minutes on average, it takes about 4 years to form 210,000 blocks, so the half-life is estimated to be around 4 years.

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Therefore, from 2024 in calculation, the reward will be reduced to 3.125 bitcoins. However, in theory, the reward bitcoin only converges to zero and cannot be zero forever. This is why there are mixed opinions about the timing of mining completion. One bitcoin per block is not compensated, and some experts believe that 2032, when 99% of bitcoins are mined, is actually the time of completion of mining, and the opinion that 2040 is completed when calculating profitability, is the 2 millionth in calculation. Some experts see 2140 as the point of completion when Bitcoin comes out. There are also opinions that the completion time will not come due to the adjustment of the mining difficulty. Anyway, there are still bitcoins that have not been issued, so how will bitcoins that have not yet come out? Even if you can only get one, you can earn more than 50 million won (as of February 18, 2020), which makes me even more curious.

You’ve probably heard of bitcoin mining at least once. If you verify and encrypt the transaction details of bitcoin in the world, you can get bitcoin in return. This is called bitcoin mining. Since it is not eligible for mining, anyone can mine with a dedicated computer called a miner, but it is not easy to mine one even if you run the program for a whole month, so now most of the corporate-type organizations run hundreds of computers at once. It is currently asking for tens of millions of won, but Bitcoin was not attracting attention from the beginning. Of course, the value was not so high from the beginning. Let’s see how much bitcoin value has increased through actual trading examples?

The first actual transaction of Bitcoin was the pizza order transaction on May 22, 2010. I paid 10,000 bitcoins for the second edition of Papa Jones Pizza, and if you calculate the current price of bitcoin, you paid 500 billion won for the second edition of the 20 dollar pizza. It became a really expensive pizza. It was a phenomenon that occurred as the value of bitcoin soared in just a few years.JP Morgan analyzed that it would be difficult to keep the current market price if it could not reduce the volatility of bitcoin. I expressed the opinion that there is. Anyway, if you look at the price of Bitcoin, which rises when you wake up and when you wake up, it is true that you are worried about investing even now. However, in an article like Bloomberg, “When an American market research firm Gartner recently conducted a survey of corporate finance executives, eight out of 10 responded that they were not willing to invest in bitcoin as a company asset.” (February 17, 2021 There is a date). You know that you always have to be cautious about investing, right?