You may have heard that Mark Zuckerberg, the co-founder and CEO of Facebook, Inc. was in the courtroom, battling against the Winklevoss twins, who claimed that Zuckerberg stole their idea and code for a social-networking based website, which is Facebook. Even though the twins lost the case and settled for a $65m compensation, along with 1.2 million Facebook shares, they still became billionaires. Not because they won the lottery, but because they invested in Bitcoin, a form of cryptocurrency.
If you go by the books, Cryptocurrency is a digital asset designed to work as a medium of exchange wherein individual coin ownership records are stored in a ledger existing in a form of computerized database using strong cryptography to secure transaction records, to control the creation of additional coins, and to verify the transfer of coin ownership. It does not exist in physical form, is decentralized, no central authority can produce it. But in layman’s terms, it is a form of digital money, just like the name suggests.” Crypto” refers to the various encryption algorithms and cryptographic techniques that safeguard these entries, such as elliptical curve encryption, public-private key pairs, and hashing functions. And currency is something we all know.
So, how did this digital currency help people to become millionaires?
Cryptocurrency was launched in 2008 and Bitcoins were launched as a type of cryptocurrency in 2009. When launched for the first 15 months it’s value was very low, and then slowly in the 16th month since its introduction, the cost was somewhere around $0.0003. The first real price increase occurred in July 2010 when the valuation of a Bitcoin went from around $0.0008 to $0.08per coin. The currency has since seen some major rallies and crashes. Now, in this modern world, One Bitcoin is worth almost $20000 which is exponentially higher than what it was 10 years ago, and is still growing, as the cost per Bitcoin is expected to touch around $200,000/coin within the next 5 years.
This all started when a pseudonymous developer Satoshi Nakamoto wrote a paper titled – Bitcoin: A Peer-to-Peer Electronic Cash System and posted it to the cryptography mailing list. On 3 January 2009, the Bitcoin network was created when Nakamoto mined the starting block of the chain, known as the genesis block.
One of the boons of this creation is that one need not know about the technical details before they invest in Bitcoin. The first step includes installing the Bitcoin Wallet, which is something similar to Paytm, where the only currency used is Bitcoin. Then, you need to generate an address, which can be used like an OTP. This address can be used among friends to pay each other. All confirmed transactions are included in the blockchain. It allows Bitcoin Wallets to calculate their spendable balance so that new transactions can be verified, thereby ensuring that they’re actually owned by the spender. The integrity and the chronological order of the blockchain are enforced due to a set of cryptographic rules.
In April of 2018, India’s Central Bank, RBI, banned and made Bitcoins illegal in India, which enraged the crypto-community of India, who filed a court case against the Bank regarding this matter. After 2 years of struggle, they finally won the court case, and now, Bitcoins are legal in India, anyone can invest in them. As the crypto-community was bubbling with joy, their official statement released, goes as: ‘We welcome the Supreme Court’s decision to lift RBI’s ban on trading in cryptocurrency. We believe that banning tech is not the solution, a risk-based framework must be developed to regulate and monitor cryptocurrencies and tokens.’
According to Nischal Shetty, CEO of a Local Crypto-Exchange platform Wazirx, “The Indian market is a sleeping giant and the lift of the ban will help the global crypto-market grow exponentially.”