You may have heard that Syft is now the first application which allows you to report in Bitcoin. Our recent announcement to this effect was met with much excitement. For instance, Founder at Myccounant, Graham Shapiro, commented on LinkedIn:

"Whether people believe in Bitcoin or not is irrelevant - the fact that you're doing this shows your commitment to reporting in a format that's useful to the users. Well done!"

With the increasing use of Bitcoin, it only makes sense to enable its use as a reporting currency. But for many, Bitcoin remains a nebulous idea. Should you invest in it? Is this current boom a sign of the future or just a brief blip on the historical timeline? I've heard many conflicting narratives myself. So, let's break this down.

Bitcoin was created in 2009 by Satoshi Nakamoto, a mysterious figure whose true identity is unknown. In fact, it may be a stretch to call Nakamoto a figure as we don't really know if this is an individual or a group of people. And this name may be carefully constructed to hide Nakamoto's true identity/identities.

It started as open source software in response to the economic crisis of 2008-2009 when money was printed to rescue banks after the credit and stock market crisis of the real estate bubble. Instead of a physical, tangible asset, Bitcoin was - and is - a virtual, digital asset.

Bitcoin was the first cryptocurrency to come into circulation. Many other cryptocurrencies followed suit, but Bitcoin is the most well-known.

Bitcoin is the most expensive cryptocurrency and roughly 255,513 bitcoin transactions take place per day (according to the most recent figures). There are 14,915 Bitcoin ATMs globally, with 11,386 of them in the United States (US). 2% of American investors own a Bitcoin.

Categorizing Bitcoin can be tricky. Is it a currency, a store of value, an asset class, or a payment network? Well, according to Investopedia, it is much simpler than you might think: Bitcoin is software. It's also one of the most successful attempts at the creation of virtual money through the use of cryptography - the science of making and breaking codes.

Bitcoin works within a decentralized system that records transactions in a distributed ledger called a blockchain. A blockchain is comprised of a single chain of discrete blocks of information which are arranged chronologically. This information can consist of any string of 1s and 0s, potentially including emails, contracts, land titles, bond trades, or marriage certificates. Any kind of contract between two parties can be established on blockchain as long as both parties agree on the contract, at least in theory. In other words, there's no need for third party involvement in this contract. This creates a whole host of possibilities when it comes to loans and other peer-to-peer financial products.

"This versatility has caught the eye of governments and private corporations; indeed, some analysts believe that blockchain technology will ultimately be the most impactful aspect of the cryptocurrency craze." - Investopedia

However, in the case of Bitcoin, the information on the blockchain tends to be transactions. It begins to look like a list. So, you'll be able to see that Peter sent 100 bitcoin to Rosemary, who then sent 50 bitcoin to Esme, and so on. By adding up these transactions, you know where each Bitcoin user stands.

Blockchain is also known as a "distributed ledger" because it is publicly accessible. Anyone can download this ledger or go to a site that parses it. This also necessitates complicated processes for updating the ledger. Without a central authority figure in charge of blockchain, participants have to create and verify "blocks" of transaction data themselves.

A bitcoin is not a physical object. You can't lock it up in a safe or even in a piggy bank. So, when it comes to keeping your bitcoin secure, you need a different method. The Bitcoin network is decentralized so that everyone can keep tabs on everyone else. The process which maintains this public ledger is called mining. Bitcoin miners record transactions on the blockchain.

Bitcoin is an unstable digital currency. In 2018, it suffered a severe crash, but it has since picked up significantly once more. Since March of 2020, Bitcoin surged by +/- 800%.

According to Bitcoin bulls, Bitcoin will eventually become a generally accepted asset. Bloomberg Intelligence's Mike McGlone wrote that the odds are tilted in Bitcoin's favour toward resuming its upward trajectory. However, Bitcoin bears argue that this cryptocurrency is still incredibly volatile and, as such, we shouldn't make such sweeping assumptions of its future prominence.

Given that Bitcoin is both volatile and controversial, why do people find this strange, intangible currency appealing? Here are six of its main appeals:

One reason to like Bitcoin which I've already mentioned is that it provides you with the ability to dispense with third parties in transactions. You no longer need to rely upon your government or a central bank as a regulatory authority. This means that cryptocurrency can remain stable even if your country is going through a turbulent time. Bitcoin can therefore be a good means for wealth protection as you can convert fiat money into Bitcoin and keep it as Bitcoin until your usual currency stabilizes once more.

There are also low transaction fees for Bitcoin, especially when it comes to sending money across borders.

Using Bitcoin is a lot easier than you may think thanks to its use by a growing number of online businesses. Crypto debit cards are emerging and are likely to become more prevalent moving forward. Digital wallets also enable people to access and use their coins without hassle.

When you make a payment with Bitcoin, you don't need to provide personal information. All you need to do is share your digital wallet address. Your wallet is also protected with a private key, without which no one can access your Bitcoin. This means that Bitcoin is a lot more secure than regular cash.

You no longer need to mine Bitcoin yourself to buy or trade it. Mining is a very complex process which requires specialized skills, powerful computers, and electricity. However, today, all that's needed is a reputable crypto exchange for you to purchase Bitcoin from others.

Online trading platforms give you the chance to buy and sell Bitcoin tokens and other cryptocurrencies and exchange them for other, more traditional currencies. A lot of these platforms are optimized for mobile devices with dedicated apps that you can download.

Bitcoin is appealing because it's something new and forward looking, a fully digital currency which changes everything we know about money. You no longer need a bank, your currency isn't dependent on local politics and world events, and it's a technological innovation.

Each Bitcoin transaction is stored in the chain of blocks (the blockchain mentioned before), which is a unique and immovable record. Bitcoin is durable in that it cannot be physically damaged or altered and it can be stored online indefinitely. Bitcoin is also very portable thanks to its digital nature.

Bitcoin's popularity grew during the pandemic for a number of reasons. During numerous lockdowns and economic disruptions, most mainstream assets and investments deteriorated. With growing concern over traditional assets, the environment was ripe for an alternative to advance.

Global investments in Bitcoin rose during the past year. Some investors bought Bitcoin as value storage, while others bought it to re-sell at a later stage.

There's a limited supply of Bitcoin available - 21 million units to be precise.

Approximately 18 million units are already in circulation. This means that going after the last 3 million has triggered a kind of Bitcoin gold rush. Moreover, the amount which Bitcoin miners are rewarded with for mining tokens is halved every four years. as a result, the number of eager miners is likely to decrease over time and fewer new Bitcoin tokens are likely to be in circulation.

Despite its recent surge in popularity, there's no denying Bitcoin's volatile history. Which begs the question: Is Bitcoin really on the up or is this just another bubble waiting to burst? After all, in 2017, Bitcoin grew exponentially, only to see its value fall by a dramatic 65% within the space of a single month.

Two US-based initiatives, the Digital Currency Initiative of MIT, and the Digital Dollar Project, are exploring the notion of a digital fiat dollar in a future time when cash is no longer king. Similar initiatives are being undertaken in the Bahamas, China, and Sweden.

In October 2020, the Bahamas launched the "sand dollar", the first national launch of digital currency by a central bank. This April, the Eastern Caribbean Central Bank unrolled its equivalent - DCash- and the Bank of Jamaica is planning to introduce digital currency in 2022.

As with anything that's new and valuable, the appeal of Bitcoin is palpable. However the high risk and minimal regulation associated with Bitcoin prompts many potential investors to be weary. Bitcoin and other digital currencies remain a high-value target for cybersecurity criminals thanks, in part, to the fact that blockchain is not centrally regulated or backed by a physical commodity. But this is still a space of immense potential.

Whichever way you look at it, Bitcoin and other cryptocurrencies are currently very popular and a growing number of businesses are beginning to accept cryptocurrency payments. So, it may be worth your while to look into those last 3 million tokens that remain to be mined.

Anything you think I should've mentioned or that I should take a look at in a future blog post? Let me know by sending an email to media@syftanalytics.com.