This modern digital age has seen many changes in our everyday dealing. It was only a matter of time before a sort of digital currency came along, which we now know as cryptocurrency. Of this, Bitcoin is the most commonly-known type, although there are others like Ripple and Litecoin.
While many may think of Bitcoin as being a brand-new invention, it was actually introduced back in 2008. Its unveiling was through a paper by the mythical and unknown expert cryptographer Satoshi Nakamoto. This outlined the Bitcoin design as a peer-to-peer “money” transfer system based on electronic means instead of cash exchanging hands. With this software, one could authenticate and protect transactions without any form or treasury or centralized bank.
The point of Bitcoin was not just to transfer funds, however. It was, and still is, meant as an alternative currency independent of any country or union of countries. This was deemed a useful innovation for many reasons, but one of the major reasons was the 2008 mortgage crisis within the United States.
The price of bitcoin fluctuates constantly with just one unit of Bitcoin at times worth several thousand US dollars only to dive to values near $0. Businesses and people are now accepting and transferring payments in Bitcoin and other crypto currencies.
Before you decide to invest in Bitcoin or even accept payments in this form, it’s worthwhile to read up on just what it is and how it’s been performing over the years. Bitcoin is now completing a whole decade in the public eye, so let’s look at its highlights:
While Bitcoin is the first cryptocurrency to come into being, the concept of cryptocurrency was around before 2008. In the decade before Bitcoin’s launch, there were at least two attempts for establishing online currencies with encrypted ledgers. These include B-Money as well as Bit Gold. However, these were never developed to their full potential.
The Bitcoin Paper:
The paper detailing Bitcoin’s working system was first on a mailing list for discussing cryptography. While we do know that Mr. Nakamoto was the name attached to this paper, no one really knows who this man is. He claimed to be residing in Japan, which his online post didn’t match with. There has been much speculation about his true identity, but the truth is still unknown.
In January 2009, Bitcoin software was available to everyone, with ‘mining’ being the process through which to get it. The mining consists of running complicated mathematical algorithms though computers. When one equation got solved, you got one Bitcoin on the blockchain, which is a ledger of all the Bitcoin transactions.
In 2010, Bitcoin finally had a proper monetary value. This was difficult, as the currency didn’t have a trading history. This was the year when someone decided to sell their Bitcoin for the very first time. The transaction was 10,000 Bitcoins for a couple of pizzas.
Come 2011, and there were several competitors for Bitcoin after it gained a bit of popularity. The concept of encrypted and decentralized currencies is an attractive one, especially now that online transactions are so common. A common currency does away with the issues of exchange rates and other limitations, so several alternative cryptocurrencies came to light.
These ‘altcoins’ as they’re sometimes termed, tried to improve the original system with more speed, privacy, and other advantages. Litecoin and Namecoin were among the first of these. As of today, there are more than a thousand cryptocurrencies and new ones coming in every month.
Two years later, in 2012, the price of Bitcoin was at a thousand dollars. At this point, it began to rapidly decrease. The price reached around $300 and didn’t reach $1000 again until 2015. This resulted in many early Bitcoin investors losing money.
Scamming and Thefts:
With no one controlling Bitcoin and the anonymity of the transactions, it’s no surprise that Bitcoin became a target for many scammers and other criminals. In early 2014, Mt.Gox disappeared from every online platform. This was the biggest Bitcoin exchange at that point, which meant that around 850,000 Bitcoins were completely lost.
Back then, the total value of the haul was $450 million, while now it’s more than $3 billion even at the lowest rates.
ICOs and Ethereum:
Of all the rival cryptocurrencies, none has come as close to Bitcoin as the Ethereum platform. This used a cryptocurrency called Ether to help along smart contracts and applications based on blockchains. The working was through ICOs, or Initial Coin Offerings, which were fundraising platforms. These enabled the trading of stocks and shares for startup companies.
However, the Securities and Exchange Commission (SEC) in the United States warned against Ethereum by pointing out how ICOs might easily be Ponzi schemes. Hence, investors steered clear of the company and the Chinese government even banned the ICOs for good.
The Bitcoin grew strongest in 2017 when it reached $10,000 and went even further. This was due to an increase in platforms that accepted Bitcoin as payment. There were more uses for cryptocurrency as the online market grew, with more money coming into the digital currency system. In fact, the total market cap for all cryptocurrency went from $11 billion to more than $300 billion.
Banks also started looking at ways in which to work alongside Bitcoin, including giants like Barclays, Citi Bank, and BNP Paribas. The blockchain technology that makes Bitcoin tick also gave rise to a revolution in the tech industry and others. With the Chinese government opening its doors to Bitcoin, the boom was even more in place.
After a peak of almost $20,000 per unit in December 2017, Bitcoin prices have now seen a huge decline of more than 60%. Right now, one unit is worth a little more than $3,500. This is still a lot more than the original price, but the drop is steep enough to discourage many investors. Many people have lost their life savings investing in Bitcoin, especially as it decreased 15% in around 48 hours at one point.
For now, there are still many stores, apps, ATM machines, and online platforms that accept Bitcoin as payment. However, the sharp rises and declines for this concept have definitely made investors more cautious than before. There are differing opinions on whether it’s even worth buying Bitcoin nowadays given its utter volatility.
There might be several voices on the case of Bitcoin today, but the importance of cryptocurrency is heavily apparent. Some might call cryptocurrencies a scam and outright dangerous, but there’s no denying that this is a technology that won’t die down. People are in need of a universal currency more than ever, with financial transactions constantly taking place across all corners of the globe. Hence, Bitcoin is far from over and might see yet another boom or a bust in the near future.