Bitcoin (or BTC) is an electronic payment system and cryptocurrency, which is based on mathematical calculations. Bitcoin was introduced not too long ago, precisely in 2008. From then until now (approximately 10 years), the value of Bitcoin has risen to a maximum of 20 000+ USD, and fallen to almost zero on several occasions.
Bitcoin has several important features, which include decentralization, limited supply, pseudonym, immutability, and divisibility. Today, everyone can create a personal Bitcoin wallet, where all transactions are kept anonymous as no one will ever be able to find out who is the true owner of this wallet, unless the owner reveals it by himself (Read more about Bitcoin wallets here). This crypto currency is often compared with gold because the number of Bitcoins is limited to 21 million.
In short, if you have been a “sleeping beauty” for 10 years in terms of crypto industry, we will try to inform you about everything you have missed, and get you prepared so you won’t miss out on any opportunity again in the future.
Although Bitcoin currency is generally considered to have started in 2008, its concept was, however, developed back in 1998 when Japanese Wei Dai in a cyberpunk e-mail newsletter described the principle of the fundamentally new monetary system and called it b-money, which was an anonymous, distributed electronic cash system.
At that time, it was almost impossible to create such a system because of the very low processing power of computers.
The world heard about Bitcoin for the first time on October 31, 2008 when someone with the name, Satoshi Nikamoto, posted an official document (Whitepaper), which described the principle of the cryptocurrency, Bitcoin.
Up to this day, no one knows anything about the creator, except for the name. It is likely that Satoshi Nikamoto is a pseudonym, under which a whole group of people from any part of the world can hide. The official document was published under the name "Bitcoin P2P e-cash paper", and in absolutely native English, which put some doubt on whether the creator is of Japanese origin.
In the same year, just before the publication of the document, the domain, bitcoin.org, which hosted the official site of the electronic payment system, Bitcoin, was registered. This domain still exists.
The beginning of 2009 marked the generation of a small block of Bitcoins, 50 BTC in size. This took place precisely on January 3 at 18:15 GMT.
After this time, active and advanced users of the network began the manufacture of coins (known as mining), using the computing power of their computers and electricity. At this initial stage, the mining of BTC was not that complex as any user could do it, provided his personal computer was powerful enough. However, the complexity of mining dramatically increased later on with the increase in the number of coins, and it is now useless to mine coins with a domestic PC.
The first transaction was made by Satoshi Nikamoto, who sent 170th block to Hal Finney on the 12th of January.
The general public was unaware of Bitcoin and the demand for BTC was almost zero then. At the end of the year, about 800-1600 BTC was worth $ 1.
In 2009, the cost of one bitcoin could be calculated using the formula: (processor power * cost of electricity) / number of Bitcoins
One of the most significant events at the beginning of this year was the use of Bitcoins to make purchase for the first time. An owner of BTC bought two pizzas with 10,000 Bitcoins, which was worth about $ 41 at that time. Two months later, 10 thousand Bitcoins became equivalent to 600 dollars. This increase in the value of BTC was due to the fact that an exchange, which allows the convertibility of BTC to dollar, was opened at that same time.
On July 17 this year, the largest Bitcoin exchange, MtGox, was founded by Jed McCaleb. The creation of such an exchange made it possible to exchange the cryptocurrency for fiat.
This year witnessed major attacks by hackers and significant fluctuations in the development of the coin. The rate of the crypto currency was very unstable due to lack of support. For a day, the value could grow from $1 to $ 31 per coin, and then get back to the initial price.
In June of this year, more than 60,000 users of the MtGox exchange suffered from severe attacks by hackers, where passwords, postal addresses and coins were stolen. This led to reduction in the rate of BTC to 1 cent per BTC. In addition, one user was robbed of 25 000 BTC (which was equivalent to $375 000 then). After all these events, the stock exchange closed for a week to recover.
Hacker attacks really attracted a lot of public attention, and had a bad effect on the reputation of Bitcoin. In spite of these happenings, the first conference on Bitcoin was held in Prague on November 25.
In 2012, the currency continued to develop and attract more and more users. The first community to support cryptocurrency, the Bitcoin Foundation, was created in September of the same year.
In 2013, the exchange rate of Bitcoin, after a long stagnation, began to grow rapidly as the currency continued to gain an increasing popularity. In September, the owner of a large drug company on the black market, who used to sell goods for BTC, was arrested. Despite the fact that the reputation of the currency has been severely damaged, it has not lost its popularity as some countries even recognized it as legal mean of payment.
Large investors began to invest in the opening of their own computing centers for mining bitcoin, which now prevents the average user from sacrificing some of his computing power, and earning a few coins
A brief history of the currency rate at a later period is presented below.
In 2016, the minimum rate of Bitcoin was on January 16, when 1BTC = $279, while the maximum was on December 28, when 1 BTC = $940.
In 2017, the rate continued to grow rapidly, reaching a rate of 1BTC = $ 20 000+ in December.
The real fever of excitement on Bitcoin was experienced in November and December of 2017 as all mass media companies paid attention to it and the vast majority of the world population learnt about the name of the first cryptocurrency.
If you look at the graph of Bitcoin's course, you can identify six distinct stages, which are given below.
Bitcoin is currently the most popular crypto currency in the world. Try it if you haven’t done so yet.
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