F Share J Tumblr It’s 6pm on a Saturday night and around 100 people – mainly young men – are gathering at a humble Adelaide bowls club for a cryptocurrency “meet-up.” They’re very casually dressed and appear to be your average middle-income Australians, but a glance towards the car park will tell you that many of them are anything but. 25-year-old Kane Ellis has arrived in a bright yellow luxury Maserati, which he purchased from a Sydney dealership for a cool $200,000. He’d decided it was time to reward himself for years of holding the world’s hottest commodity. Bitcoin Bitcoin was developed in 2008 by a mystery man who called himself ‘Satoshi Nakamoto.’ Whether that is his real name is unclear. The fact he has never come forward and revealed his true identity is perhaps surprising, because the technology he developed is considered “genius” by some of the smartest minds in the world. Mark Pesce, an American-Australian author, researcher, entrepreneur and cryptocurrency expert, told an Australian Senate hearing in 2014 that Bitcoin was a “fundamental breakthrough in computer science.
” Richard Branson, the forward-thinking owner of Virgin Airlines, has been keeping his eye on Bitcoin for several years and he likes what he sees. “I think it is working,” he told Bloomberg News. “There will be other currencies like it that may be even better, but in the meantime there’s a big industry around Bitcoin.” Bitcoin.
The Price When Bitcoin was first created 10 years ago, you could buy a coin for just one Australian cent. Since then the price has been extremely volatile, but overall, has maintained an extraordinary upward trajectory. At the time of writing this article, it was at $17,000. It means a $10 investment then would be worth $17,000,000 today.
How does it work? At the most basic level, Bitcoin can be described as a digital currency that can be sent peer to peer, without the need for a third party (like a bank). The system was designed so that only 21 million Bitcoins will ever exist and it is claimed they cannot be forged or hacked. The fact there is a limited supply means that the value should increase over time if they continue to be bought. This is different to traditional, government issued currency, which has historically increased in supply with time, leading to inflation.
Blockchain Technology What makes Bitcoin so unique is its underlying “blockchain” technology, which allows money (and information) to be sent over the Internet without being hacked or copied. Jamie Skella, a key figure in Australia’s blockchain industry through his project Horizon State (more on that later), describes the blockchain as “a shared record book.” “Each addition to this record book is a new line item,” he said in a LinkedIn post. “This isn’t just one record book stored in a central location that is shared by many.
“There are thousands of copies of this record book, stored on computers all around the world, both home computers and business servers – hence the term “decentralised”. “This record book can be used to record many kinds of things, however I’ll use sending and receiving money as the primary example, as it’s the most common one right now. Bitcoin was developed in 2008 by a mystery man who called himself ‘Satoshi Nakamoto.’ ”When John wants to send money to Sue, a new line item is created detailing that transaction.
“This line item then gets sent off to hundreds of other computers who have a copy of the record. ‘Those computers confirm that this transaction is authorised, and ultimately they agree (or disagree) that everything about the transaction is legitimate before giving that line item a tick of approval.
“It has to match up perfectly on every copy of the record. “It’s as if John and Sue had a few hundred mates stand around them and watched John hand Sue the money in question, and they all agreed that he really did hand her the money, as well a other aspects of the transaction, such as it being the right amount. “The genius of this shared record book is that it requires no bank, no centrally owned company, and you don’t have to place your trust in any financial institution… there doesn’t need to be any middleman of any kind.” Alternative Coins and Tokens (Altcoins) Since the creation of Bitcoin, there has been more than a thousand other cryptocurrencies hit the market. Alex Saunders explains that cryptocurrencies like Bitcoin are now only one aspect of what Blockchain technology can do.
“We’ve got companies and projects breaking into all different industries that are not competing as that bitcoin digital money,” he said. Perth company PowerLedger uses the blockchain to allow renewable energy to be sold between buyers and sellers without a third party. A $10 investment ten years ago in Bitcoin would be worth $17,000,000 today. Australian Jamie Skella (mentioned earlier) has created Horizon State; a blockchain system which promises a “secure, anonymous, convenient and affordable voting platform.” He said it is essentially a “digital ballot box that can be used to conduct sensitive votes quickly, cheaply and securely.” Mr Saunders is a supporter of both of those projects, but when asked about the hundreds of others, he conceded, “there are too many now.
” “I’d say that 90 per cent of those will definitely fail. “You’ve got to be very selective and educate yourself about which ones will do well.
“Just like the dot come bubble, a lot of the bad companies will fall by the wayside, but the good ones are going to be here to stay for the next five or 10 years.” Mark Pesce said that before cryptocurrencies, there were already a lot of currencies that people don’t think about. “Loyalty points, frequent flier points. There are already a lot of currencies that get created by businesses for things,” he said. “The bottom has just dropped out of that because it is now really easy for everyone to create currencies for whatever they want and that’s where I see the future getting really weird and interesting because they’re going to start showing up in places that we haven’t seen them yet.
” The Investors When Kane Ellis arrived at his cryptocurrency meet up in Adelaide in a Maserati, others in the group would not have blinked an eyelid. Kane Ellis bought this $200,000 Maserati after making a successful investment in Bitcoin. Many of them have also been long-term investors in Bitcoin and have also made a fortune. Alex Saunders, who organised the event for the followers of his Facebook Page “Nugget’s Crypto Academy,” first entered the market in 2013. “I was always into computers, maths and science and then cryptocurrency came along,” Mr Saunders said.
“I was pretty sure that this was going to catch on and be a big thing.” “I’ve done extremely well, but obviously I don’t like to disclose exactly how much money I’ve made,” Mr Saunders said with a smile.
Retiree Terry Proud shifted a portion of his superannuation into Cryptocurrencies six months ago and said he can’t wipe the smile off his face. “So far it’s risen 500 per cent,” Mr Proud said. Kane Ellis bought his Maserati after selling some of his Bitcoin, which he bought for just $1.60 in 2010. “In 2011 or so I cashed out 2-4 Bitcoins for a McDonald’s meal,” he said. That burger, fries and coke ultimately cost Mr Ellis around $80,000. A Bubble? So how long will the frenzy last? Well that depends who you ask.
Professor Steve Worthington from Melbour.