If somebody approached you 14 years ago and told you that in the future, you would be able to send money to anyone over the Internet, and no financial institution would be involved, would you believe them? In 2008, during the full swing of the financial crisis, a group of tech-savvy believers helped bring to life a solution that would shake the fundamentals of traditional finance. That’s how Bitcoin came to be.
Bitcoin became the world’s first decentralized digital currency. It was created to become a fast cryptocurrency that cannot be hacked or duplicated, allowing the transfer of value without the need for third parties such as banks. This was achieved by leveraging blockchain technology, a decentralized database made out of blocks of transactions. The more blocks in a chain, the more secure the blockchain is, making Bitcoin resistant to any hacking attempts.
Bitcoin revolutionized the approach to digital currencies and provided a conceptual and technological foundation for thousands more competing ideas in the next chapter in the history of currencies.
It has spawned a global community of millions of enthusiasts that develop, invest in, trade, and use Bitcoin and other cryptocurrencies in their daily lives.
The entire cryptocurrency sector, which is at the time of writing (April 2022) currently worth $1.8 trillion, is based on the concept pioneered by Bitcoin. Bitcoin alone takes up 41.83% of the whole cryptocurrency market cap value.
BTC is Bitcoin’s ticker symbol. Just like the United States Dollar has a symbol USD. Here are some ways you can use your Bitcoin.
At the time of writing (April 2022), Bitcoin’s price is $40,140. The current Market Cap ranking is #1, with a market cap of $785B.
Bitcoin has closed the previous year on a strong note by reaching an all-time high price of $65,566 in November 2021, more than double its price of $31k at the start of 2021. However, 2022 started with a market correction that is still present, and it has reduced the prices of all cryptocurrencies, including Bitcoin.
Bitcoin is considered the decade’s best-performing asset, having ten times bigger returns than the NASDAQ 100. The numbers show that if you invested $100 into Bitcoin in 2010, today, that would be worth $15M. Additionally, it indicates that Bitcoin has stood the test of time as an investment asset.
Bitcoin has an average year-on-year growth of 81.86%, and usually, major price movements are tied to the process of halving that we will mention in the next section.
Bitcoin’s maximum supply is capped by software and will never exceed 21,000,000 coins. In return for using their computer power to secure the network and process transactions (add blocks to the blockchain), people get rewarded in Bitcoin. This process is called Mining.
During the early days of Bitcoin, the rewards for securing transactions or a block were much higher than nowadays. A “halving” process reduces the reward for a secured block every 210,000 blocks, or roughly four years, increasing the scarcity of Bitcoin and thus making it more valuable.
The most recent halving happened on May 11th, 2020, when the reward was reduced from 12.5 Bitcoin to 6.25 Bitcoin per block.
Bitcoin did not have an initial distribution of tokens. Still, early network users amassed hefty amounts of Bitcoin due to significant block rewards that were 50 Bitcoin per secured block. For example, Bitcoin’s creator has around 1 million Bitcoin tied to his wallet address. Unfortunately, many users have either lost access to their wallets or lost wallets themselves who today hold Bitcoin valued at millions of dollars.
Bitcoin, as a cryptocurrency champion, has become an in-demand asset. It is available for purchase in many ways, with high supply across the board.
The primary way people buy their Bitcoin is through centralized exchanges because they offer the ability to purchase them with credit/debit cards, which most people prefer.
Although significantly more complicated, the second way is through decentralized exchanges such as Uniswap. Decentralized exchanges usually require users to already have some cryptocurrencies in their wallets to buy other cryptos. Since Uniswap is built on the Ethereum blockchain, Bitcoin that you can purchase over there is called wBTC (Wrapped BTC), and those coins represent the value of Bitcoin on Ethereum.
Finally, it can be purchased easily through a broker app such as our Veli App, where you can get your hands on some Bitcoin in just a few taps on the screen.
The creator of Bitcoin is only known under the pseudonym “Satoshi Nakamoto.” As of 2022, the true identity of the person or organization behind the alias remains unknown.
Although Nakamoto was the inventor of Bitcoin and the author of its first implementation, he provided Gavin Andresen, who later became the Bitcoin Foundation’s primary developer, with the network alert key and management of the code repository. Over the years, many contributors have improved the cryptocurrency’s software by patching vulnerabilities and adding new features.
Bitcoin has amassed an impressive community during its life span, especially its developer community.
Bitcoin’s GitHub code repository has more than 750 contributors, while the most popular Bitcoin forum called Bitcointalk counts over 3.4M members.
Some of the world’s most prominent investors and VC funds, such as Alameda Research, LD Capital, Pantera Capital, Winklevoss Capital, Paul Tudor Jones, Ray Dalio, and Michael Novogratz, have invested in Bitcoin and are holding it in their portfolios.
Additionally, many countries are legalizing Bitcoin and are on the way to including Bitcoin as one of their legal tenders. Some countries have already done it, such as El Salvador and a part of Switzerland.
Bitcoin has had its fair share of legal activity, both good and bad. In its early days up until recently, many countries have tried to ban BTC because it was not compliant with all sorts of regulations, and governments could not control it. In recent times, things have changed, and many countries are now figuring out how to implement BTC into their economic systems with different laws.
Bitcoin has been on the path of constant growth in adoption during its lifetime. It has started slowly, but in recent years, it has begun to speed up, and the numbers are showing it:
Bitcoin’s biggest competitors are Ethereum and Litecoin.
Ethereum is Bitcoin’s number one competitor. The main difference between Ethereum and Bitcoin is that Ethereum is the world’s first programmable blockchain that allows people to use blockchain technology to create different kinds of applications and host them on the Ethereum network.
Litecoin is the hard fork of Bitcoin. A hard fork is when the participants of the network disagree on the proposed update and the network splits into two. Litecoin was then created with the purpose of being faster than Bitcoin and as a payment method. Like Litecoin, there have been many Bitcoin forks such as Bitcoin Cash, Bitcoin Gold, and Bitcoin SV.
We have also prepared this table to better illustrate their differences through numbers.
Bitcoin | Ethereum | Litecoin | |
---|---|---|---|
Transactions Per Second | 7 | 15 | 56 |
Time Needed to Confirm a Transaction | 60 min | 6 min | 3-5 min |
Average Transaction Fee | 1.62$ | 15$ | $0.03-$0.04 |
Market Cap | $713b | $310b | $9.3b |
Circulation Supply | 90.62% in circulation | no limit on the number of tokens | 83.58% in circulation |
Total Number of Wallet Addresses | 951.6m | 150.6m | 134m |
Total Number of Daily Active Users | 913k | 509k | 303k |
Launch Date | 2009 | 2015 | 2011 |
Average Growth Rate | 80.79% | 178.20% | 90.44% |
As with any other asset classes, there are risks involved when it comes to investing. You can download our How to invest in crypto guide that outlines general cryptocurrency investing risks and offers tips on how to mitigate them.
Website: https://bitcoin.org/en/
Bitcointalk: https://bitcointalk.org/
Reddit: https://www.reddit.com/r/bitcoin
Twitter: https://twitter.com/Bitcoin
The year 2021 will be remembered as a pivotal point in Bitcoin acceptance and adoption. When El Salvador became the first country to make Bitcoin legal tender in September 2021, it acted as a huge catalyst. Meanwhile, inflation has been rising globally with no abating. Billionaire investors Paul Tudor Jones, Ray Dalio, and Peter Thiel have all touted Bitcoin as a store-of-value asset in the current rising inflationary environment, in some cases preferring “digital gold” to the precious metal.
Twelve years since it was first introduced, Bitcoin has faced seemingly insurmountable obstacles but has maintained its demand. Like JPMorgan CEO Jamie Dimon, some top CEOs voiced skepticism about Bitcoin and the digital currency asset class in the past. Yet, sophisticated Wall Street traders are increasingly turning to the opportunities presented by the leading digital asset. Investors have demonstrated a willingness and a desire to make room for Bitcoin in their portfolios. Additionally, big companies like VISA, Paypal, and Fidelity are entering crypto and starting their crypto divisions.
In addition, Bitcoin acceptance has become a cross-generational phenomenon, with many institutions interested in gaining exposure to Bitcoin investment products. Launching a Bitcoin futures ETF was a significant milestone that investors have shown a massive interest in. There are currently many Bitcoin ETFs and ETNs. Bitcoin network and adoption are in constant growth, and Bitcoin history and network activity show us just that.