Bitcoin is a cryptocurrency or digital currency that knuckles under the principle of cryptography for regulation and generation of units of currency. The asset fell under the scope of cryptocurrency and was the first and most valuable among them all. That’s frequently called decentralized digital money.
Bitcoin is also very different from traditional currencies. Unlike euro or dollar, Bitcoin isn’t backed by any government, since it’s a fully decentralized funds form.
Bitcoin isn’t linked to any central banking system or issuing authority, and that’s a big part of its appeal — instead of being swallowed into a system that’s often sullied by human greed and manipulation. This currency exists in an online world driven by mathematics and cryptography protocols.
Table of Contents
Bitcoin is the first crypto asset and the first successful implementation of a distributed cryptocurrency, partially described in 1998 by Wei Dai on the cypherpunks mailing list. Building upon the notion that money is an object or any record, accepted as payment for goods and services and repayment of debts in a given country or socio-economic context, Bitcoin is designed around the idea of using cryptography to control the creation and transfer of money, rather than relying on central authorities.
Bitcoin does not require any ID to use. Making it suitable for the unbanked, the privacy-conscious, computers or people in areas with poor financial infrastructure.
A bitcoin transaction is propagated nearly instantly in the network and is usually confirmed in a couple of minutes. Since they run in a global network of computers, they are completely indifferent of your physical location.
Bitcoin funds are locked in a public key cryptography system. Only the owner of the private key can send and use the cryptocurrency. Strong cryptography and the encrypted digits make it impossible to be hacked.
The laws of supply and demand determine Bitcoin’s price. Because the total amount is limited to 21 million bitcoins, as more people use Bitcoin the increased demand, combined with the fixed supply, will force the price to go up. Since the number of people using Bitcoin in the world is still relatively small, the price of Bitcoin in terms of traditional currency can fluctuate significantly on a daily basis but will continue to increase as more people start to use it.
Bitcoin as the first pan-global currency (or commodity) that can be used by people all over the world as a medium of exchange without involving governments, the cryptocurrency will continue to attract interest and resistance.
Bitcoin Development History
The second half of 2008 – from this time, the history of Bitcoin begins its countdown. In those days, an anonym or a group of people, hiding under the pseudonym Satoshi Nakamoto, published a document describing the first cryptocurrency, releasing a client to work with the network and generating a genesis block for which 50 BTC reward was charged. So the world first heard about Bitcoin.
We can not say that the history of the emergence of Bitcoin originated from scratch. It was preceded by numerous earlier studies, dating back to the 80s of the last century. In 1983, scientist David Chaum thought out a system for sending anonymous payments using the so-called “blind signature.”
In the late 90s, researchers Adam Beck and Nick Sabo worked on the prototype of the digital currency. Their developments and later formed the basis of the Bitcoin network.
- The history of Bitcoin caused a wide public response in 2011. Bitcoin exchange rate equaled the dollar, the first MtGox cryptocurrency exchange appeared. The famous Time magazine mentioned Bitcoin. All these did not escape the attention of hackers who launched severe attacks on the network. At the same time, Bitcoin also began to be associated with the criminal world, as it was increasingly used in concluding transactions at obscure sites.
- In the following years, dozens of cryptocurrency trading platforms began to open, where each can trade digital coins. The spring of 2013, the price of Bitcoin crosses the psychological milestone of $ 100. Hundreds of new altcoins appear, among them Ethereum, Ripple, Dash, Monero won the most popularity.
- The spring of 2017, BTC is recognized as legal tender by one of the most technologically advanced countries in the world – Japan.
- August 18th The domain name bitcoin.org has been registered.
- October 31. Published a document that officially presented the public a new cryptocurrency. The title of the document is “Bitcoin P2P e-cash paper”.
- Bitcoin beta test for everyone with a view to testing the technology of mining.
The course of bitcoin in 2009 began its smooth ascent. In January, a bitcoin network appeared with the release of the first open source client of bitcoins and the release of the first coins, and Satoshi Nakamoto obtained the first block of bitcoins (known as the genesis block), which received an award of 50 coins.
- January 12th. The first BTC transaction (block 170). Sender: Satoshi Nakamoto. Recipient: Hal Finney (Hal Finney).
- October 5th. The first rate of Bitcoin against the dollar on the exchange has been published: $ 1 = 1.309.03 BTC.
- December 30th. For the first time increased the complexity of mining Bitcoin.
The Bitcoin rate in 2010 was influenced by many factors, the most significant of which were the opening of the first exchange and the famous purchase of 2 pizzas in Papa Jones for 10,000 BTC.
- February 6. The first official Bitcoin Market is opened.
- 22nd of May. The first purchase online was made. For 10 thousand coins (back that time it was about $ 25), a certain Laszlo bought a pizza.
- July 11th. The bitcoin version v0.3 was mentioned on the Slashdot resource. This gave a significant increase in the number of Bitcoin users.
- July 12. In five days, the rate of cryptocurrency has increased in 10 times: from $ 0.008 / BTC to $ 0.08 / BTC.
- July 17th. Another MtGox exchange has been established.
- October 1st. Created the first public miner OpenCL.
- October 16th The first registered Bitcoin trading with deposition.
- November 6th. Bitcoin capitalization was $ 1 million. The cryptocurrency rate on the MtGox exchange reached $ 0.50 / BTC.
Based on the open source Bitcoin code, other cryptocurrencies began to appear.
- February 9th. Bitcoin caught up in value with the dollar.
- 2 June. Bitcoin exchange rate to the dollar rose to $ 10 for one coin. And after 6 days, the exchange rate of MtGox was fixed at 31.91 USD for 1 Bitcoin.
- June 8. MtGox bitcoin price reaches the record level of 31.91 US dollars
- November 25 was the first conference on cryptocurrency in Europe. The event took place in Prague (Czech Republic).
- 12 December. The largest account was paid at 171 BTC in block 157235.
In 2014, the documentary “The Rise and Rise of Bitcoin” was released, featuring interviews with Bitcoin users, such as a computer programmer and drug dealer.
January, the Elliptic Vault was opened in London – the first secure storage of bitcoins.
In the same month, the cryptocurrency begins to crowd out the euro in Ireland. A large number of companies have agreed to accept payments for Bitcoin services.
- 1st of February. The American newspaper The Chicago Sun-Times for one day introduced a bitcoin payment for reading articles.
- In 2014, several carefree Bitcoin songs such as Oda Satoshi were released.
- January. Network speed exceeds 1 petahash / sec.
- March. The Japanese Cabinet of Ministers recognizes virtual currencies, such as Bitcoin, as payment instruments on par with real money. The largest South African online cryptocurrency market Bidorbuy opens.
- April. The Steam Service begins accepting bitcoin as payment for video games and other online media.
- September. The number of Bitcoin ATMs over the past 18 months has doubled and reached 771 ATMs worldwide.
- November The Swiss railway operator SBB (CFF) upgraded all its automatic ticket machines, so you could buy bitcoin from them using a scanner on a ticket machine to scan a bitcoin address in the phone application.
The number of bitcoin-based businesses continues to grow. In January 2017, NHK reported that the number of online stores accepting bitcoin in Japan increased by 4.6 times in the past year.
In 2017, Bitcoin gained more legitimacy among legislators and legacy financial companies. For example, Japan passed a law accepting Bitcoin as a legal payment method, and Russia announced that it would legalize the use of crypto-conversions, such as Bitcoin. And Norway’s largest online bank, Skandiabanken, combines Bitcoin accounts.
Trading volumes on the exchange keep on growing. For the 6-month period ending in March 2017, Bitso, the Mexican exchange, saw an increase in trading volume of 1,500%. Between January and May 2017, Poloniex increased the activity of active traders by more than 600% and regularly processed 640% more transactions.
- January. After the rally for most of the second half of 2016, bitcoin for the first time in 3 years, broke through the $ 1.000 limit.
- April. Japan recognizes bitcoin as a legal payment method.
- On August 1st, bitcoin split into two digital derivative currencies, classic bitcoin (BTC) and bitcoin cash (BCH). The split was called Bitcoin Cash hard fork.
- On September 1, the Bitcoin exchange rate exceeds $ 5.000.
- November 29. In 2017, the price of bitcoins exceeded $ 10.000.
- December 18. Bitcoin reaches a record high but does not reach $ 20.000.
There are legends about Bitcoin, but they are based on real facts. Since its introduction in 2009, 1 Bitcoin was equivalent to five cents, and by 2013 its value had risen to $ 1.000. Not a single currency in the world can boast a similar rate to the US dollar, even if it did not last long.
Bitcoin’s Blockchain as Gold Standard Technology
The increased interest of many countries and large corporations in the financial sector to this technology is no longer the news for anyone. Blockchain is a decentralized center that allows transfers without the participation of any intermediaries.
In addition, the system has enhanced security, and transactions are protected by a special code that cannot be changed. Such factors only open up further prospects for the blockchain methodology as a means of payment.
The potential of bitcoin as a method of payment
If 2-3 years ago, few projects were involved in cryptocurrency payments, now such exchange bureaus have grown significantly. There was a huge demand among users, respectively, and the proposal. Under these conditions, the price of Bitcoin and other currencies will increase.
How to buy and store Bitcoin?
There are several ways to buy Bitcoin for fiat money, including cash, banking card, or any other means of payments of your choice. They differ in velocity, the simplicity of purchase procedure, and the level of anonymity. Please feel free to learn more about possible ways to buy bitcoins.
Changelly platform offers you a way to buy Bitcoins with your banking card swiftly, safely, and with minimal authentication procedure. The fiat payment process is powered by our partner Simplex and takes just a few simple steps to take. The purchase option is open both via our website and the Exchange Widget that can be found at our partners’ resources.
You can find more information on how to store and buy BTC by following the link.
What is the future of Bitcoin?
Nowadays, Bitcoin is not the only only one known currency in crypto space, there are many others. So why, Bitcoin? What about it versus other cryptocurrencies?
Bitcoin has many advantages compared to other cryptocurrencies, and we will take a close look at some of these points.
BTC is the oldest and most reliable cryptocurrency. It is the mother of all coins in the crypto exchange market, which means that most other cryptocurrencies are mainly traded to and from Bitcoin. It has the most real usage of any others and with the largest market capitalization and the least volatility. Bitcoin-based securities are most likely to get approved by regulators and thus become part of institutional investments and offerings. Bitcoin has the advantage of being better known, more widely used, and it has much better liquidity.
Various scaling upgrades have been implemented by Bitcoin users and companies that have added significant capacity. There are basically three main scaling upgrades that have an effect on the network right now:
- Segregated Witness (SegWit) can theoretically provide over 100 % of extra capacity for the network. Currently, approximately 40 % of the network is making SegWit based transactions, which already provides a significant capacity boost.
- Lightning network, which potentially could have a massive effect on capacity, is already being used for real bitcoin payments. At this moment, the effect of Lightning on the congestion and fees of the network is minimal, but it is expected to have a larger effect in the future. One real-life example of how Lightning is being used is Satoshi’s Place, where people paint pixels using Lightning. At its peak, there were over 1.000 transactions made per day in this service with very low fees and they did not cause almost any congestion on the Bitcoin blockchain. In summary, it has been proven that Bitcoin is highly reliable and that it can scale, which is a very positive fundamental value.
- Transaction batching, which can provide an even larger boost than SegWit, has been implemented by more and more Bitcoin services recently. This means that instead of sending each payment in a separate transaction, exchanges and other services will wait until they have a larger amount of payments and batch them into a single transaction. This saves a huge amount of space, and more efficiency is expected in the future as there are still certain large exchanges that do not execute batching.
- Finally, it is good to mention that Bitcoin is getting improvements in the privacy department. Future protocol upgrades such as Schnorr signatures will improve privacy, and payments made using the lightning network are generally considered significantly more private than regular Bitcoin transactions.
We’ll keep you updated about the latest news, tips, and guides. Stay tuned!