The Evolution of Bitcoin
Of all the innovations that this world has seen in centuries up until recent times, blockchain ranks among the best. Blockchain technology was invented by Japanese named Satoshi Nakamoto in 2008. Although, it appears that the identity of the said inventor is a mystery with only a few details known.
The blockchain technology is truly what the world needed at the time he invented it. It is a decentralized, open, distributed ledger which records transactions between users efficiently and permanently.
There are many things that make the blockchain technology attractive; this article will only spot a few. It is impossible to alter information on a blockchain without the consensus of all users on that chain. Also, with blockchain, one can create smart contra cts and cryptocurrencies.
The popularity of the blockchain has been helped in a large part by the bitcoin price explosion of 2017. Bitcoin is a cryptocurrency that is built on public-readable blockchains (as most cryptocurrencies). This invention is, undoubtedly, a sway for many into the digital side of life.
A Short History of Bitcoin
Bitcoin is an evolving financial asset. Finance, like most of the world’s inventions, is something that progressively developed. From trade by barter to the use of precious metals, paper money, and then cryptocurrency, we have seen evolution.
On October 31st, 2008, a white paper titled: “Bitcoin: A Peer-to-Peer Electronic Cash System” was published via a cryptography mailing list. Prior to this, an anonymous person registered the Bitcoin.org domain. By January 2009, Bitcoin first version was announced, and mining began.
Bitcoin is decentralized, and the inventor(s) remain a mystery. Therefore, its growth can be attributed to other organizations which controlled its acceptance through their services. One of such organizations is Winklevoss twins. Also, some major events increased Bitcoin awareness.
Bitcoin has really grown in value over the years. Some free Bitcoin Telegram Signals show us how Bitcoin stacks up against many other currencies today. Thus, from when it was first invented, up till now, it has enjoyed recognizable acceptance.
Common Uses of Bitcoin
Bitcoin can be used in several ways; it is basically used for financial activities – buying and selling, payments, and so on. In other words, the same way we use traditional currencies is the same way Bitcoin is used.
Because of its decentralization, it is not a financial asset like the fiat currency. Therefore, there are no impositions as to when, how, why, and what transactions should be made using the Bitcoin. With Bitcoin, one can trade 24/7 whichever way you want.
In addition, Bitcoin can be used as a means of exchange to other currencies – fiat or cryptocurrency. For example, it can be converted to USD, Ethereum, Bitcoin Cash, etc.; the reverse can also be done.
Another important reality that the Bitcoin brought to light is the development of Altcoins. Altcoin is just a short form for “Alternative to Bitcoin.” These coins are developed by modifying the algorithm of the Bitcoin blockchain. For example, XRP, Litecoin, Bitcoin Cash, etc.
The Price Timelines of Bitcoin
Bitcoin, owing to its decentralization, has suffered a lot of volatility over the years. The ups and downs in its price may be attributed to the fact that it is not regulated. Below are some facts about the price of Bitcoin from January 3rd, 2009; until now.
Bitcoin mining started on January 3rd. By October 5, 2009, Bitcoin had a value of 1,309.03BTC to 1USD. In May 2010, a man paid 10,000BTC for two pizzas with a value of 25USD. Quite low, right? Interestingly, a year later, Bitcoin equaled the USD in value, i.e. 1BTC = 1USD.
In 2012, it attained a value of 5.7USD per BTC. Then sometime in March 2013, it hit 131USD per BTC. By November that same year, it hit 1,242USD on Mt Gox exchange. Unfortunately, it dropped to about 540USD in February 2014 and maintained its decline up till January 2015.
Its worth in January 2015 was 281USD and only increased slightly by the end of the year. However, magically, it began to experience greater ups and lesser downs between 2016 and 2017. Guess what? By December 2017, it hit its ATH (All-time High) of about 20,000USD.
The price in December 2017 dropped in 2018; it is currently valued at about 6,700USD. This is just a summary of the price trend over the years. Bitcoin has increased as well as reduced based on how widely and wildly it is accepted in different places.
Bitcoin as an Asset?
This is the prevalent question on the minds of many and it goes a long way in how people accept it. I once had a friend with whom I was discussing wealth creation. The moment I mentioned Bitcoin, he gave me a stern warning not to delve into it.
On the other hand, some would push you to invest in it, maybe even support you. This has everything to do with how we see this new financial invention. Our acceptance or rejection of it is dependent on how we see it.
A good understanding of the blockchain – Bitcoin’s underlying technology – would help here. The integrity of Bitcoin is hinged on the blockchain technology. Therefore, I would highlight the features of the blockchain technology in this article, for a more profound understanding.
Some of the features of the blockchain technology are listed below:
- It is a decentralized open and public ledger. That is, there is no central authority who manages the blockchain. It also means that transactions are known to the public and are controlled by a cluster of computers (or nodes).
- It is immutable. This implies that it is impossible to alter any information on the blockchain. The method of verifying the blocks is called “hash”. This makes it difficult for transactions to be rolled back and altered.
Though, it may be possible someday to roll back a blockchain transaction in the event some unwanted transactions have been made. To do this, every computer on the network must verify the transaction.
- Blockchain increases the capacity of its network. When compared with a centralized body which has fewer controllers, blockchain is controlled by a vast number of computers.
- An example is the supercomputer developed by Stanford University for protein folding simulation. There are many other examples of how the blockchain increases the output capacity of computerized equipment.
- It offers more security than other financial institutions. There is no institution that is not susceptible to hacking, save those which people have not attempted to hack, probably. However, Bitcoin has never suffered hack since its invention. Isn’t it amazing?
- People’s private keys or accounts can be hacked if not handled carefully; Bitcoin can’t. This is because no transaction can be verified without the collective agreement of all nodes on the network.
- I have had to wait for a whole weekend to cash out a payment I activated online. This is a problem with traditional banking systems. Thank to blockchain! Transactions can now be done at an instant irrespective of the location that participants are.
These are some basic features of the blockchain technology. Since Bitcoin is built on the blockchain, then we can use the blockchain to judge the Bitcoin. I believe this should be a better basis for judging it than being sentimental.
Two Sides of Acceptance
Unfortunately, Bitcoin is not a widely accepted asset. Although not all countries accept it, I must admit that there are individuals or groups in every country that do. There are several countries who do not accept Bitcoin and they also punish those who do.
Reports have showed that some countries have placed a ban on the use of Bitcoin. Some other countries like Japan permitted its use but put regulatory measures in place.
Bangladesh, Bolivia, Ecuador, Kyrgyzstan, and Nepal are the leading countries in a fight against Bitcoin. In fact, Nepalese government went as far as jailing cryptocurrency enthusiasts in the country.
This unfortunate occurrence in these countries has been ongoing from as far back as 2014. They are yet to backtrack on their decision. Truly, some of their actions can be related to the scams that are associated with crypto use. For example, Bolivians were scammed for a 300% profit in 60days.
Nonetheless, many countries accept it today – at least, more than those who reject it. If you want to know whether the Bitcoin is a wildly accepted cryptocurrency, it is simple! Just look at the short period within which Bitcoin rose to an incredible value.
For example, since 2013 when Bitcoin was accepted as a means of payment in Japan, it has been widely used. In February 2018, a huge advertisement of Bitcoin was displayed close to Shibuya train station in Tokyo.
In summary, Bitcoin is a potential-filled asset that the world cannot deny. Those who appreciate what its worth would maximize its value. Whereas, those who despise it now, even for the right reasons, would come to see in a little while that they were wrong.
Thanks for reading!