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Salt was once used as a form of currency in ancient Rome – this is where the word salary comes from. Cowry shells were once used as a form of currency in ancient Maldives – this is where a certain idiom comes from. And in this digital age, we now have a purely digital currency. Bitcoin has been around for more than a decade now, but it’s only recently that it’s started to get real mainstream attention.

What is Bitcoin? And how can you “mine” something that doesn’t exist in the physical world? The answer to both those questions is the same – a Bitcoin (BTC) is the digital reward you get for solving a complex math problem in the bitcoin blockchain network. Bitcoin mining is referred to when people use high end computers with powerful graphics cards and CPUs to try to solve as many of these problems as they can in a short time to get more BTC as rewards. In some cases, entire building floors have server racks full of Bitcoin mining rigs.

Now you might be wondering why people are paying over $50,000 for a single bitcoin when it’s so easy to mine it. Why does it have so much value? This is because the supply of Bitcoins is limited. Once a certain number of BTC has been mined from the network, no more will be made – thus creating scarcity. And it’s getting harder to mine it now that the supply is nearing its end. Once, a single cheap home PC would have been enough to mine dozens of Bitcoins a week. Today, you’d need huge server farms to get the same production rate. The lack of supply and higher difficulty in mining has led to a gradual price increase throughout the years – sometimes in bursts and jumps.

This leads to one of the main draws of Bitcoin as a currency. Since the cryptocurrency’s inception in 2009, the value of a single BTC has increased from MVR 0.012 to MVR 561,458 today. Because of its limited supply, BTC value is expected to keep going up in the long term. And because Bitcoin is run on a network of computers and no single person or group controls the supply, it is considered to be a decentralized currency. It won’t be possible for a government to just print more Bitcoin later on – which might lead to inflation and devaluation of the currency.

Of course, that’s not to say that Bitcoin is without flaw. Compared to other more traditional paper-based currencies, BTC is still very young. There are risks involved in using it. Even though it has proven to be a good long-term investment with a steady rise in value over the years, it has also seen a lot of turbulent times with sudden price falls. Until the price stabilizes eventually, expect there to be spikes up and down. There’s also the risk of losing your bitcoin if you lose the hardware it’s stored on. Many people have accidentally lost a pen drive or permanently deleted a folder they were using to store their BTC. Once you lose your BTC wallet, whatever’s stored inside is gone forever.

Despite these setbacks, Bitcoin is becoming more accepted globally. It fits all the criteria of being considered a currency too. BTC is a medium of exchange - you can use Bitcoin right now to pay for many goods and services online. BTC is a measure of value where you can easily pay with it no matter the price of what you’re buying. And finally, BTC is a store of value – as easily evidenced by the scores of people who have held onto the cryptocurrency and gotten huge returns on their investment.

It might be a while before Bitcoin becomes stable and accepted enough to be used as an actual global currency. But that seems to be more likely as more companies invest in the crypto market and more outlets accept digital currencies like bitcoins as payment for real products. With no central governing body to dictate its future, it’ll be interesting to see where Bitcoin will be in a few years’ time.

About the author: Maldivian Gaming League is a team of e-sports organizers and competition promoters based in the Maldives. For more information, check them out on Facebook or Instagram.