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The ABCs of bitcoin
And a look at its investment potential
c o n t i n u e d
Cryptocurrencies, or digital currencies, have captured the imagination
and interest of investors around the world in recent years and in
particular in 2017. Three main factors have driven this interest: the role
of cryptocurrencies as bold new upstarts in the world of electronic
payments; their meteoric rise in value since they were created less than
a decade ago; and the perennial search for long-term stores of value
in the face of geopolitical uncertainty.
igital coins. Electronic money. Cryptocurrency. By any name, the world of
digital currency is an unabashed phenomenon, yet largely a mystery to some—
indeed incomprehensible to many—due to its labyrinthine structure. In an effort to
provide an understanding of this enigmatic space, this paper will focus on the
digital currency world through the lens of bitcoin—the first, best-known, and most
dominant cryptocurrency by market capitalization, which created the foundation
on which other cryptocurrencies were built.
Before we can explore where bitcoin stands currently and whether it should have a
place in an investment portfolio looking to preserve wealth for the long term, let’s
take a look at its beginnings and how it works.
What is bitcoin and what problem is it trying to solve?
Bitcoin* was created by Satoshi Nakamoto, a person (or persons) whose identity
remains unknown. On October 31, 2008, Nakamoto emailed a whitepaper outlining
the bitcoin system to a cryptography mailing list. It was implemented as open source
PLEASE NOTE: We make no recommendations of any currency, product, provider, or protocol; names of
same are included solely as examples for purposes of discussion.
by rhea thomas
By convention, the payment system is generally referred to as Bitcoin, with a capital “B,” while the uni