Though cryptocurrency has only just recently become a worldwide craze, the digital form of exchange has been around since the early 1980s, when David Chaum, an American cryptographer, created an algorithm that became the foundation of electronic currency transfers. He then created DigiCash, a cryptocurrency that ultimately fell flat and went belly-up in the late 1990s. Bitcoin is widely regarded as the world’s first cryptocurrency, first released in 2009, when one U.S. Dollar could buy you 1,309 Bitcoins, and taking off in the mid 2010s; now, the value of one Bitcoin exceeds $8,000 USD. But what exactly is Bitcoin, and why is it so valuable?

   Although Bitcoin is a form of currency, it has no physical entity. You cannot hold a Bitcoin in your hands or put it in a piggy bank. Essentially, Bitcoin is a system of blocks, blockchains, and hashing. Blocks are digital ledgers of transactions; a blockchain is the public record of all blocks to date. Everything is digital and decentralized, meaning no one company or organization is in charge of the currency. It is a peer-to-peer system, meaning everything is monitored and conducted by Bitcoin users. By paying with Bitcoin, you authorize the transaction with your personalized ID and “send” your Bitcoin away, but will never again have in your possession that exact Bitcoin. This is because Bitcoin is a non-reusable, anti-double-spending currency—the first of its kind. Unlike all cryptocurrencies before it, Bitcoin prohibits people from digitally copying their money. There is a large but limited amount of Bitcoins that can be “mined,” rewarded to Bitcoin miners once they add a block to the ever-growing blockchain, a process called hashing.

   Bitcoin, yet another form of online payment, makes spending money that much easier and thoughtless. With online shopping, people frivolously spend hundreds. You don’t see the money, so it’s less of a heartbreak to spend. Bitcoin, or any other cryptocurrency, is no different. Digitizing the market further, making it a decoding game, offering a new form of risky investment: these are the ways cryptocurrencies lure people in. In a digital age, digital money should be no surprise. Junior Shreyas Kompalli gives his thoughts on the digi-crazed market.

   “I think that virtual and online stuff have taken over the world in a sense; a lot of people have social media and they live through online personas rather than real life. Money is just another step in that direction. I think that when you can’t see money, it loses its value in a sense. That’s why a lot of people do online purchases; they’re not actually physically giving people money,” said Kompalli.

   But Bitcoin is not without its risks. The market is highly volatile; one day it is reaching new highs, the next, prices plummet without warning. The reasons for the inconsistencies of the market are plentiful. Bad press, perceived value, and investors’ reactions to security breaches all result in fluxuations in Bitcoin’s value. Those who hopped on the digital-cash train early on now have thousands upon thousands for every dollar’s worth of Bitcoins bought less than ten years ago. Many, of course, now wish they’d have invested back in 2009 when the platform first arose; the value of one Bitcoin has flip-flopped from the miniscule amount of less than one cent per BTC (Bitcoin) to a still-rising amount of 10,000 USD. Junior Josh Dapiran comments on the future of Bitcoin and cryptocurrency in general.

   “I think that companies like Amazon or eBay are going to start investing into cryptocurrency. I find it interesting that we can use data encryption to buy stuff. I never thought that we’d be able to use completely digitized, online money. You’d have never thought that things like this would happen, but sure enough, things you’d see in movies next to flying cars are becoming a reality,” said Dapiran.

   Though the future of Bitcoin is unclear, one thing is certain: in the age of technology and the internet, cryptocurrencies are only beginning to make their mark on the world.