Bitcoin investors clutched their digital wallets this week as the cryptocurrency surged its way back to the top.
This past weekend Bitcoin suffered a crash and its currency plummeted down as much as 29 percent to as low as $5,605 on Nov. 8, as reported by Bloomberg Technology. The deep dive did not last long, and the virtual currency rose to over $6,700.
"Because of the news of the cancellation of that upgrade, a lot of mining power moved from the older version of Bitcoin to Bitcoin Cash," Dong Jae Lee, project advisor of the Trojan Blockchain Society, said.
The canceled fork, known as SegWit2x, would have allowed for a faster transaction process and doubled the number of bitcoins on the market. A bitcoin transaction currently takes up to 10 minutes for purchase verification. The fork was canceled over fears that it would cause a rift in the community, according to TechCrunch.
Bitcoin has been around since 2009 when a mysterious figure known as Satoshi Nakamoto founded the currency. According to Forbes, it rose in popularity around 2013 and first became known throughout both the deep and the dark web.
Today it is used as a form of virtual currency, allowing users to exchange bitcoins for goods or services. In fact, many California restaurants in both Silicon Valley and Silicon Beach accept bitcoin. For example, you can exchange a few digital coins for a slice of Abbot's Pizza in Venice, CA.
"It's the most popular digital currency right now," Benjamin A.T. Graham, assistant professor of International Relations at USC and Bitcoin expert, said.
Graham added that the popularity is due to bitcoin's removal of the middleman. It takes the money straight from the user to the business. In a sense, it equates to lower transaction fees.
This is accomplished through the blockchain. President of the USC Trojan Blockchain Society Daniel Aghachi describes the blockchain as a decentralized ledger of peer-to-peer transactions.
To purchase with bitcoin, a company sends a bitcoin address to the user. The user then sends a direct payment to the given address. The full transaction then takes 10 minutes to verify and is included in the blockchain. The blockchain ensures party spending, prevents fraud, and prevents double spending.
Those interested in the cryptocurrency should note that while investing in bitcoin does allow for a quick turnaround of investments, warned Jae Lee, it is also extremely volatile. He said that those interested should invest and trade at their own risk.
USC students who want to get more involved and learn about bitcoin can apply to join the Trojan BlockChain Society. Aghachi says they are currently taking applications for next semester and are working on how they can take blockchain technology to businesses and help them grow.