Bitcoin

#1
Price: $6481.06542528
Change(24h):
-0.89%
Volume(24h): $3,893,891,933
Market Cap: $112,312,080,794
Bitcoin is the oldest and most popular cryptocurrency, as well as a worldwide payment system. Launched in 2009 as an open source, decentralized platform by mysterious Satoshi Nakamoto, Bitcoin introduced to the world the blockchain technology, which made it possible for other digital currencies to be developed. Bitcoin allows users to make digital transactions securely, relatively fast and without any intermediary and is believed to have all chances to become the most popular global payment method in the near future.

Latest Hight: $9,964.50

Bitcoin Markets

# Source: Pair: Price:
1
Bithumb
BTC/KRW
$6517.94410071721
2
Binance
BTC/USDT
$6490.77181483193
3
Huobi
BTC/USDT
$6488.92096810002
4
Livecoin
BTC/USD
$6570.2
5
Bitfinex
BTC/USD
$6724.8
6
HitBTC
BTC/USDT
$6494.20769520125
7
Binance
ETH/BTC
$6535.53892565044
8
Binance
XRP/BTC
$6478.90146407656
9
OKEx
BTC/USDT
$6517.16656286682
10
GDAX
BTC/USD
$6445.82

 

Bitcoin - The Face of The Revolution in Decentralized Transfer of Value

 

• Area to disrupt: money transfer, storage of value

• Competition: Litecoin, Bitcoin Cash

• Founded by: Satoshi Nakamoto

• Based in: - - -

• Max supply: 21 000 000

Bitcoin logo 400px

The Story of Bitcoin’s Exponential Price Growth

The Bitcoin network came to existence on January 3, 2009, when the genesis block of Bitcoin (BTC) was mined by Satoshi Nakamoto. The goal of the mysterious creator was to build an electronic cash system that is fully peer-to-peer, involving no trusted third party.

This revolutionary technology slowly and consistently gathered more and more supporters and for less than 10 years became one of the most profitable assets in human history.

The first adopters of Bitcoin were more or less tech-minded coders. One year after the first Bitcoin was mined, the price for a single BTC was USD 0.001. By July 12, 2010, increased 18 times to reach USD 0.08.

 

On January 1, 2011, one Bitcoin was trading at USD 0.32. The same day, the darknet marketplace Silk Road was opened. In 2011, the libertarians started to get on board mainly because their political beliefs were related to the idea for money transfers without a trusted third party. Wikileaks and other organizations began to accept Bitcoin as donations.

On April 23, 2011, the price of one Bitcoin matched the price of one euro for the first time.

On June 2, 2011, Bitcoin reached another milestone, passing USD 10.

About one year later, over half of all Bitcoin transactions were made on the first Bitcoin gambling site – SatoshiDice. The price for a single BTC during that time was USD 5.50.

 

On September 27, 2012, the Bitcoin Foundation was formed (1 BTC was equal to USD 12.30) and from this point, on more and more venture capitalist investors were dragged into space. At first, there wasn’t much interest, but once more people from the Silicon Valley got on board, things changed.

On March 23, 2013, Bitcoin market cap topped USD 1 billion (1 BTC = USD 86.20). This funny mish-mash of different kinds of crypto enthusiasts like coders, libertarians and venture capitalists created a network effect and the more people got involved, the stronger the network became.

On November 1, 2013, the price of one BTC hit USD 500 and less than a month later – on November 27 – it reached USD 1200.

One of the reasons why Bitcoin has a negative connotation among mainstream media today is that during that time a huge part of the market for Bitcoin consisted of people buying drugs and illegal stuff on Silk Road.

 

draw of a Bitcoin's price flow

 

draw of a Bitcoin price falling down

2014 set the beginning of almost a two-year bear trend for Bitcoin.

In early February 2014, the biggest cryptocurrency exchange during that time, Mt. Gox, suffered an irreversible collapse. An estimated 650 000 Bitcoins belonging to customers and the company went missing (most likely stolen). This caused a further price decline and just a couple of months later, in April 2014, one BTC was trading at around USD 340.

About a year later, in March 2015, Bitcoin fell under USD 200 and many people were questioning the future of the coin like never before. There weren’t any massive spikes until early October, when Bitcoin doubled its value in 3 weeks – from around USD 240 on October 12 to USD 480 on November 4.

During 2016, Bitcoin began its huge rise, starting the year at USD 430 and closing it at USD 950 on December 31.

 

2017 will be remembered as even crazier. The year many of the early adopters received an answer to one of the most asked questions in the crypto space – “When Lambo?”

As you probably have heard, in 2017 BTC went from around USD 950 to nearly USD 20 000. Quite impressive. And profitable for many.

On December 17, CME Group launched Bitcoin futures, which may be one of the reasons to what happened to BTC in the first five months of 2018. Namely, Bitcoin shed nearly 70% from its all-time high in less than two months and on February 6 dipped to USD 6200. The coin has trouble staying above USD 10 000 since then, but even though, as of mid-May 2018 Bitcoin trading price is USD 8250, which is 360% higher than what it was a year ago.

draw of a Bitcoin price getting up

 

Bitcoin – Changing Money as We Know It

Bitcoin is a cryptocurrency and a worldwide payment system. It is the most famous blockchain phenomenon. Bitcoin is the first decentralized digital currency. It works without a central bank or single administrator, which means that transactions take place between users directly, without an intermediary or a trusted third party.

Perhaps the biggest mystery surrounding the crypto asset field is – who started it all?

 

Bitcoin symbol created by numbers

Bitcoin was invented by Satoshi Nakamoto – an unknown person or a group of people.

Intentionally mysterious, the author of the legendary Bitcoin White Paper has not left many clues about himself – and the little personal information he has provided is widely thought to be purposefully misleading – nothing but smoke and mirrors.

And probably this was his goal from the very beginning. On January 3, 2009, Satoshi embedded this text in the genesis block:

“The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.”

 

This note is considered to be a mocking comment on the instability of the current financial system. Bitcoin was created to be adopted from people as their own and to form a truly democratic and decentralized community. Not only from technical but also from political perspective.

 

In the title of its white paper, Bitcoin is presented as “A Peer-to-Peer Electronic Cash System”. Digital money in a way. And what is money?

Money is basically just an accounting system. It is a way of recording who owns what and who owes what to whom. Before Bitcoin came into existence, you needed somebody who could stand as the central issuer, someone who would guarantee that the money was real. And for centuries governments and central banks have been doing that.

Bitcoin is also just an accounting system. It records all the transactions on the network in an open ledger but eliminates the need of a third party standing between people who want to transfer value.

The idea of a decentralized electronic cash system exists before Bitcoin, but Satoshi was the first man who figured out how to update that public ledger, so every user agrees it is not fraudulent.

 

 

Miners – The Most Important Piece of the Bitcoin Infrastructure

It is really important to understand that once you eliminate the need of a middle man, who is a sort of repository of all the information, you eliminate most of the fees on the transactions, the inefficiencies, and ultimately the potential for corruption.

Bitcoin technology automates that trusted third party function by putting it on an open ledger so anyone can see it and so you know that you are not getting a counterfeit Bitcoin when making transactions. How does it do that?

Thanks to the miners.

 

Miners are the most important pieces of the Bitcoin infrastructure. They are the guarantee that every single Bitcoin in circulation has a history and can be tracked where it came from. Miners are the computers that are tasked with maintaining the ledger of the blockchain. They have to verify every single transaction, to make sure it is trustworthy, to put it into the ledger and distribute it across the other users on the network.

Sounds like a job with a lot of responsibilities. In addition, these computers drain a lot of electricity power to get the job done. So, a reasonable question is: Why do they do that? What is their personal interest?

As miners go through the process of confirming transactions, the Bitcoin protocol forces them to look for a solution to a complicated math problem. Simultaneously, thousands other computers are looking for the same solution because the winner gets a reward in Bitcoin.

Bitcoin logo with a hand of a miner

 

The first miner to complete the task gets the newly created Bitcoin. This competition between miners is happening every 10 minutes and is about who will validate the new block of transactions and distribute it across the network, so consensus is reached. This process is called Proof-of-Work (PoW).

The more we go in time, the more difficult the tasks get and that’s why more and more computer power is required to maintain the Bitcoin network. The energy consumed is probably the most controversial issue regarding the usefulness and sustainability of Bitcoin and other cryptocurrencies.

 

 

Financial Perspective

From a financial perspective Bitcoin is a deflationary digital currency. This means that over time less and less Bitcoins are produced. In fact, mining rewards reduce by 50% every 210 000 blocks, which takes about 4 years. Until 2012, the reward for validating a new block was 50 BTC, between 2012 and 2016 it was 25 BTC, and now we are at Reward era 3 where miners get 12.5 BTC for discovering a new block. Next halving will occur in 2020.

Another very important aspect of Bitcoin is that it has a fixed supply. Only 21 million Bitcoins will be mined ever and the last one is foreseen to be in 2140. This controlled supply makes Bitcoin an asset whose underlying value is thought to appreciate rather than depreciate over time.

 

 

Why Bitcoin Is The Face of All Cryptocurrencies?

The most obvious answer is because it has the first mover advantage. This is of course true, but my personal opinion is that another very important driver of the Bitcoin supremacy over the rest of the cryptocurrencies is precisely the mysterious origin and therefore leadership of the ecosystem.

For if the author is unknown – he might as well be non-existent, and if there is no one at the helm – then we have a truly democratic, decentralized community – not only from technical but also from a political perspective.

If you want to create a legend you can’t put a mere mortal at its core. There must be a messiah like figure, a theoretical entity – who is now long gone and only his legacy lives on. 

Bitcoin started as a cryptocurrency aiming to enable fast and cheap transactions. However, we may say that most of the people nowadays look at Bitcoin as a store of value – digital gold. It is an asset to hold on to, rather than use it as a means of exchange. Among the reasons for that are the high transaction costs and the increasing time for payments to be confirmed, all related to the scalability issue for the Bitcoin network. Several solutions to that problem have been designed and are being implemented (like SegWit, Lightning Network and atomic swaps) and optimism among the first digital coin’s supporters is high that Bitcoin will soon become a major global form of money.

 

Review: Lyubo Zhechev
(The views and opinions expressed by the contributor in this text should not be considered financial advice, neither treated as expression of Coins.Online’s view.
Cryptocurrency trading and investing is risky and market participants are advised to always conduct a thorough research.)

 

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