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Cryptocurrency Bitcoin is off the charts, but for how long?

"The identity is replaced by addresses so we appear as a string of letters and numbers," said Wang.

Posted: Dec 13, 2017 5:45 PM

"A cryptocurrency? I was like, this can't take off, money's money, we can't change that," said Tyler Munstock, a Chico State Student.

That's what a lot of people thought back in 2009 when an anonymous creator - maybe a group, maybe a man or woman - know as "Satoshi Nakamoto" began Bitcoin, a currency to solve a few major problems with the way we use money today.

"The first thing is to remove the trusted party, the bank, and create a Bitcoin network", said Zhaohong Wang, Assistant Professor of Electrical and Computer Engineering at Chico State.

The network has a public bulletin board, or "blockchain" where transactions are posted.

So, the transaction is private, and the bank can't sell the information about your purchase history to advertisers.

Plus, lower transaction fees.

"The identity is replaced by addresses so we appear as a string of letters and numbers," said Wang.

But, this privacy could also work to protect criminal trading.

"Two parties are doing some drug transaction but they're anonymous, they feel they are safer because it's more difficult for the police to catch them," said Wang.

There are 21 Million total Bitcoins, and they haven't all been sold yet. But for the 10 million or so already on the market, the value has sky-rocketed. In 2009, a Bitcoin sold for 1,000 US dollars.

So the value of the Bitcoin right now is $16,000, and there are 100,000,000 Satoshi (a smaller unit of the currency) per Bitcoin.

That means each Satoshi is worth $.00016 - not very much, but that number could go up if the value of the Bitcoin increases.

"My friend bought 4 of them, $200 each, so when it was raised to $800 he sold, now he's like 'I wish I would have kept it'," said Erphan Bibak, a Chico State Student.

But it's a gamble - there's no government to back this all up.

There's no printed money, and the digital property could fall prey to savvy hackers.

So the success of the Bitcoin is based 100% on trust.

"People believe that others will use it, they believe that Bitcoin will become more valuable," said Wang.

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