One of the greatest financial tales of recent years has been the rise of Bitcoin, which is considered as cash in the World Wide Web. This virtual currency has been designed to revolutionize money transactions. It does not require the exchange of personal information or even payment for transaction fees.
However, many people are still confused about what Bitcoin is and how it works. There are also questions about where it originated and how it became popular today.
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Although the media refers to Bitcoin as new, it has existed since 2009, and the technology that built it started way back further. Since its inception, Bitcoin has gained massive appeal across the globe. This has also inspired other digital currencies and automatic trading software.
This blog discusses how Bitcoin has transformed over the years.
The idea of digital currency is not new. Long before the introduction of cryptocurrencies, proposals were already made to improve the financial system. Here are some of the notable persons who paved the way for the birth of cryptocurrencies:
- Wei Dai: The concept of cryptocurrencies was first introduced by Wei Dai. In a paper published in 1998, he discussed the idea of digital currency or “B-money.” He said that this currency can be sent to a group of untraceable pseudonyms.
- Nick Szabo: In the same year, Bit Gold was introduced by Nick Szabo, a blockchain pioneer. It combines various elements of mining and cryptography to attain decentralization. These elements have timestamped blocks in a title registry. They can be generated with the use of proof of work strings from the benchmark function.
Both people were part of the creation behind Bitcoin, although their ideas were never implemented.
The Birth of Bitcoin: Satoshi Nakamoto
In October 2008, a mysterious developer or group of developers under the alias of Satoshi Nakamoto published a white paper that describes the Bitcoin digital currency. In 2009, Satoshi Nakamoto released the first bitcoin software that launched the first unit of Bitcoin cryptocurrency.
According to Nakamoto, the writing of the code started in 2007. Because of its nature, Nakamoto had a complete understanding that the core design might not be able to support a broad range of transaction types. Thus, the solution includes enabling specialized codes at the beginning via a predictive script.
In January 2009, Nakamoto mined the first block of the Bitcoin network. It is now known as the Genesis Block, which piloted the blockchain technology. Mining, a process through which Bitcoins are created and transactions are recorded, was introduced to the public.
Then, the first bitcoin transaction took place when Nakamoto sent a Bitcoin to cryptography expert Hal Finney. The creator’s identity remains a mystery until today. Nakamoto stepped away from Bitcoin in 2011.
First Purchase of Value
In May 2010, Laszlo Hanyecz, a programmer in Florida, offered 10,000 Bitcoins in exchange for pizza. Then, a British man took Hanyecz’s offer and delivered the pizza near Hanyecz’s residence. This has been believed to be the first use of Bitcoin. The Briton paid the pizza via his credit card while Hanyecz gave him 10,000 bitcoins. If the buyer still has those Bitcoins, it will now be worth more than $100 million.
The Emergence of Rival Cryptocurrencies
As Bitcoin started becoming popular, alternative cryptocurrencies or Altcoin began to appear as well. These alternatives aim to improve the general Bitcoin. It offers anonymity, greater speed, and other advantages. Some of the Altcoins that have emerged over time are Litecoin and Namecoin. Today, there are more than 1,000 cryptocurrencies in circulation.
The Price of Bitcoin Crashes Plus Scams
After the price of Bitcoin reached $1,000 in 2013, it started to decline quickly. Those who invested their money at this point suffered from a loss as the price dropped at around $300. It took two years for the price to reach $1,000 again.
Meanwhile, because of the lack of control and anonymity, Bitcoin has been the target of criminals. For example, Mt. Gox, a Bitcoin exchanged based in Shibuya, Japan handling over 70% of the world’s Bitcoin transactions, had to shut down due to online theft. From the 850,000 Bitcoins the company owned, 250,000 were stolen, which led to the company’s bankruptcy.
Bitcoin Continues to Grow
Through the years, more money flows into Bitcoin. The market cap of all crypto coins has increased from $11 billion to $13 billion. Blockchain, the technology behind Bitcoin, truly revolutionized the financial technology industry and continues to do so.
Despite all the troubles it went though, the rise of Bitcoin remains to be unparalleled. It might not be considered an official monetary unit just yet, but as its value increases, the more merchants from all over the globe are encouraged to use it.
Today, Bitcoin can be used to buy real estate, gold, and goods from the largest companies. Whatever your opinion about Bitcoin is, one thing is for sure; Bitcoin is here to stay for the many years to come.
Disclosure/Disclaimer : This article is sponsored by a third-party source and should not be viewed as an endorsement by Tokenhell Team. Please do your own research before investing or having anything to do with the company, goods and/or services mentioned in the above article.