summary: Bitcoin is a decentralized digital currency that has been around for over 10 years. It is not controlled by any government or bank, and instead relies on a netw...
content: Bitcoin (BTC) is the first decentralized cryptocurrency and payment system that was founded in 2009 and uses Blockchain technology. Invented by a single (or potentially a group of programmers) under "Satoshi Nakamoto," on 31 October 2008, Bitcoin was introduced to a cryptography mailing list and released as open-source software in 2009. Bitcoin is known to be decentralized, censorship-resistant, secure, and borderless. It provides users with the ability to send and receive digital money (BTC) via a peer-to-peer immutable network. There have been various claims and speculation concerning the identity of Nakamoto, none of which are confirmed. The system is peer-to-peer, and transactions occur between users directly, without an intermediary. These transactions are verified by network nodes and recorded in a publicly distributed ledger called the blockchain, which uses bitcoin as its unit of account. Since the system works without a central repository or single administrator, the U.S. Treasury categorized bitcoin as a decentralized virtual currency. In February 2015, the number of merchants accepting bitcoin for products and services passed 100,000. As of October 2022, 15,174 businesses worldwide accepted bitcoin and approximate 328,000 bitcoin transactions went through every day. Instead of the 2–3% charge typically imposed by credit card processors, merchants accepting bitcoins often pay fees in the range from 0% to less than 2%. Despite the fourfold increase in the number of merchants accepting bitcoin in 2014, the cryptocurrency did not have much momentum in retail transactions. The European Banking Authority and other sources have warned that bitcoin users are not protected by refund rights or chargebacks. The first known Bitcoin commercial transaction occurred on May 22, 2010, when programmer Laszlo Hanyecz traded 10,000 Bitcoins for two pizzas. In 2018, the entire crypto market plunged into what is now known as the “crypto winter” a yearlong ear market. It wasn’t until December 2020, that the market rose further 239%. In September 2021 Nayib Bukele, the president of El Salvador announced and implemented the decision of using bitcoin as a legal tender. In May 2021, the Chinese government declared that all crypto-related transactions are illegal. This led to a heavy crackdown on Bitcoin mining operations, forcing many crypto-related businesses to flee to friendlier regions. As of August 30, 2022, MicroStrategy has by far the largest Bitcoin portfolio, holding about 129,699 Bitcoins in its reserve, equivalent to just over $2.5 billion. On the 10 of November 2021, Bitcoin price hit an all-time high of $68,789.63, according to information from Coinmarketcap. Overview Bitcoin is often called the first cryptocurrency, or the mother of all cryptocurrencies, although, prior systems existed so, it is more correctly described as the first decentralized digital currency. It is a consensus network that enables a new payment system and completely digital money. It is the first decentralized peer-to-peer payment network that is powered by its users with no central authority or middlemen. Bitcoin utilizes blockchain technology to keep track of all the transactions on its network. Every bitcoin transaction ever done on a block is recorded in a blockchain, which is a publicly distributed ledger. \[11 When a block's memory is filled, another block in the chain is added (sequentially). This ledger, which is publicly accessible on any computer in the bitcoin network and serves as a node for relaying transactions to other nodes, records the blockchain and verifies bitcoin transactions. Bitcoin was created, according to Nakamoto’s own words, to allow “online payments to be sent directly from one party to another without going through a financial institution.” While there is a limited supply of bitcoin, not all of them are now in circulation. Bitcoin is limited to a total supply of 21,000,000 coins that will ever exist, and the only way to create new coins is by Mining, a unique technique designed for adding data to the blockchain. The protocol limits the total supply of Bitcoin to twenty-one million coins. More than 90% of them have already been created as of 2022 with an additional 328,500 bitcoins mined in 2022. but it will take more than a century to create the remaining ones. This is a result of halving, which are periodic occurrences that steadily lower the mining reward. Though ideas for a similar kind of decentralized electronic currency existed before BTC, it is still the only cryptocurrency to be used in real transactions. Many see bitcoin as digital gold, due to a finite supply of coins available, while others see it as a store of value. History Early Beginnings (2008-2013) Bitcoin was created by Satoshi Nakamoto, who published the invention on 31 October 2008 to a cryptography mailing list in a research paper called "Bitcoin: A Peer-to-Peer Electronic Cash System". It was implemented as open-source code and released in January 2009. Bitcoin is often called the first cryptocurrency although prior systems existed. Bitcoin is more correctly described as the first decentralized digital currency. Satoshi Nakamoto mined the first block on January 03, 2009, with a reward of 50 bitcoins. He then sent 10 BTC to Hal Finney nine days later in the first-ever Bitcoin transaction. Finney downloaded the bitcoin software the day it was released and received 10 bitcoins from Nakamoto. Other early supporters were Wei Dai, creator of bitcoin predecessor b-money, and Nick Szabo, creator of bitcoin predecessor bit gold. In the early days, Nakamoto is estimated to have mined 1 million bitcoins. Before disappearing from any involvement in bitcoin, Nakamoto in a sense handed over the reins to developer Gavin Andresen, who then became the bitcoin lead developer at the Bitcoin Foundation, the 'anarchic' bitcoin community's closest thing to an official public face. On May 22, 2010, Bitcoin still had a price of less than $0.01 and based on bitcoin's open-source code, other cryptocurrencies started to emerge in 2011. In March 2013, a technical glitch caused a fork in the blockchain, with one-half of the network adding blocks to one version of the chain and the other half adding to another. For six hours two bitcoin networks operated at the same time, each with its version of the transaction history. The core developers called for a temporary halt to transactions, sparking a sharp sell-off. Normal operation was restored when the majority of the network downgraded to version 0.7 of the bitcoin software. In 2013 some mainstream websites began accepting bitcoins. WordPress started in November 2012, followed by OkCupid in April 2013, TigerDirect and Overstock.com in January 2014, Expedia in June 2014, Newegg and Dell in July 2014, and Microsoft in December 2014. The Electronic Frontier Foundation, a non-profit group, started accepting bitcoins in January 2011, stopped accepting them in June 2011, and began again in May 2013. In May 2013, the Department of Homeland Security seized assets belonging to the Mt. Gox exchange. The U.S. Federal Bureau of Investigation (FBI) shut down the Silk Road website in October 2013. In October 2013, Chinese internet giant Baidu allowed clients of website security services to pay with bitcoins. In November 2013, the China-based bitcoin exchange BTC China overtook the Japan-based Mt. Gox and the Europe-based Bitstamp to become the largest bitcoin trading exchange by trade volume. On 19 November 2013, the value of a bitcoin on the Mt. Gox exchange soared to a peak of US$900 after a United States Senate committee hearing was told by the FBI that virtual currencies are a legitimate financial service. On the same day, one bitcoin traded for over RMB ¥6780 (US$1,100) in China. On 5 December 2013, the People's Bank of China prohibited Chinese financial institutions from using bitcoins. After the announcement, the value of bitcoins dropped, and Baidu no longer accepted bitcoins for certain services. Buying real-world goods with any virtual currency has been illegal in China since at least 2009. The first bitcoin ATM was installed in October 2013 in Vancouver, British Columbia, Canada. With about 12 million existing bitcoins in November 2013, the new price increased the market cap for bitcoin to at least US$7.2 billion. By 23 November 2013, the total market capitalization of bitcoin exceeded US$10 billion for the first time. In December 2013, By the end of the year, Bitcoin experienced an almost 10-times price increase between October and December. At the beginning of October, BTC was trading at $125 before reaching its peak of $1,160. By December 18, the price had once again crashed to $380. In the U.S., two men were arrested in January 2014 on charges of money laundering using bitcoins; one was Charlie Shrem, the head of now-defunct bitcoin exchange BitInstant and a vice chairman of the Bitcoin Foundation. Shrem allegedly allowed the other arrested party to purchase large quantities of bitcoins for use on black-market websites. The Mt. Gox exchange hack (2014) In early February 2014, one of the largest bitcoin exchanges, Mt. Gox, suspended withdrawals citing technical issues. At the time, the Tokyo-based crypto exchange was the largest on the market, with a trading volume of roughly 70% of Bitcoin’s total supply. Since its creation in 2010, Mt. Gox had been the victim of numerous hacks but had continued to survive. By the end of the month, Mt. Gox had filed for bankruptcy protection in Japan amid reports that 850,000 bitcoins had been stolen. Mont