BTC

Bitcoin

What is Bitcoin?

Bitcoin (BTC) is the first real cryptocurrency, a peer-to-peer digital currency. It can be thought of as a digital token.

You cannot physically touch or own Bitcoin, as all Bitcoin transactions are recorded on a public, decentralized, immutable ledger.

The original appeal of Bitcoin was that it provided a new way to pay for goods and services that did not depend on central banks, governments or credit providers.

Today, there is an ongoing debate about whether Bitcoin is really an everyday currency or whether it is a store of value, like digital gold.

Who Invented Bitcoin?

No one knows for sure. However, its creator (or creators) used the pseudonym Satoshi Nakamoto when they first wrote a forum post in October 2008, and then published a white paper entitled "Bitcoin: A Peer-to-Peer Electronic Cash System". This was published on a small crypto mailing list.

In January 2009, the software to create the currency was released, followed shortly afterwards by the first block mined on the network, the so-called Genesis block. The first identifiable person to come into contact with Bitcoin was a programmer called Hal Finney, who downloaded the software to run it and received 10 bitcoins on 12 January 2009, the very first Bitcoin transaction.

For a while, Satoshi Nakamoto and a few others mined the network for currency before he mysteriously disappeared and handed over control to another programmer, Gavin Andresen.

What Was So Special About Bitcoin?

Bitcoin had features that no other form of digital cash had been able to fully realize in the past:

• Decentralized: it was not owned or controlled by a single person or group.

• Borderless: Bitcoin can be easily moved around the world with lower fees and faster speeds than traditional money transfers.

• Immutable: blockchain transactions are impossible to alter or falsify, preventing double spending - a problem that many previous digital currencies have tried to solve.

How Is Bitcoin Created?

Bitcoin is created through a process called mining. In the world of Bitcoin, miners use expensive computers to solve cryptographic puzzles in real-time, which records batches of transaction records ("blocks") in the blockchain.

Satoshi Nakamoto has said that only 21 million Bitcoins can be created - but that ceiling has not yet been reached. Mining Bitcoin involves calculating simple SHA-256 hash function values many times. Today's bare home computers, laptops, and even gaming PCs are not suitable for this, as they require more electricity than they can generate Bitcoins. Currently, most of the world's Bitcoins are mined using specialized target hardware called ASIC miners

The miners are rewarded for their efforts with a small amount of new Bitcoins, and the miners' reward is halved every four years to slow the creation of new Bitcoins.

In terms of the expected evolution of the Bitcoin price, it is important to bear in mind the four-yearly halving period - 2024 being the next one - when the price should increase significantly as supply continues to fall, even assuming unchanged demand. This would seem to justify analysts' forecasts of a price of USD 35,000 in 2023 and USD 100,000 in 2024. In the longer term, with the growing presence of institutional investors, cryptocurrencies can be expected to move much more in line with the major stock market indices, as economic logic dictates.