Innovation Blog

What is Bitcoin and How Will They Affect Entrepreneurs?

As of 10:00AM EST 1 Bitcoin was valued at $1050 USD

What are Bitcoins?

  • According to their website, “Bitcoin is a digital currency you can use for personal transactions or business at high speed and low cost.”
  • What does this mean? It means its a new type of online money that has no physical iteration. All transactions happen electronically.
  • How are Bitcoins created. Rather than being introduced by any centralized institution like the Federal Reserve for the US Dollar, Bitcoins are introduced by individuals mining for them using heavy duty hardware to solve complex mathematical equations known as blocks. As peoples hardware gets faster and more specialized, mining for Bitcoins will get more challenging. Currently there are 11,365,200 Bitcoins in circulation. However, in 2140 Bitcoin will max out its currency in circulation at 21 million.
  • Theyre more cost effective. With lower transaction costs, Bitcoin describes themselves as a cost-effective solution to high credit card fees. It cuts financial institutions out of the whole exchange.
  • Built for a globalizing world. You can use the currency anywhere in the world So long as theres an internet connection.
  • How are they stored? Bitcoins are stored in digital Wallets. Digital wallets are third party applications that allow users to store and exchange Bitcoins as well as varying other features. They also vary in security.
  • Are Bitcoins secure and transactions private? Transactions are publicly recorded, but no personal information is disclosed. It is up to the user to insure their own security by precautions they take and third party applications they use to store and exchange their Bitcoins.
  • If its online cant someone whos really good with computers just make more? Bitcoin uses cryptography to stop people from double spending (Think World War II cipher machines multiplied exponentially).

How do I get Bitcoins?

  • By mining for them
  • Trading for them
  • Buying them on an exchange

And How Will They Affect Entrepreneurs?

Bitcoin is a new and promising form of currency. It offers a way for entrepreneurs to receive funding as well as connect with investors and collaborate globally. A global online currency means yet another barrier removed from recruiting and working with talent from all over the world: funding can be received in one country and used in another and someone doesnt have to acquire a work visa and deal with all the challenges of relocating to start a company and get a salary. The possibilities are endless, so long as the currency stays legitimate.

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