Bitcoin is a decentralized electronic currency in which encryption technologies are used to regulate the creation of money and confirm the transfer of funds, operating independently of a central bank. Bitcoin is unique in that there can only be 21 million coins in circulation at any one moment.
History of bitcoin
Bitcoin is a cryptocurrency that functions as electronic cash. It’s a decentralized digital currency without a central bank or single administrator that may be sent from user to user on the peer-to-peer bitcoin network without the need for third parties. Through cryptography, transactions are verified by network nodes and recorded in a public distributed ledger known as a blockchain.
Bitcoin was first invented in 2008 by an anonymous person or group of people under the name Satoshi Nakamoto and released as open-source software in 2009. To date bitcoin’s creator is anonymous
Bitcoins are created as a reward for mining, a process in which computers verify and record transactions on the blockchain. Miners are rewarded with bitcoins, or fractions of bitcoins, for their work.
After 2009 bitcoin exchanges became a well-known virtual currency and with the bitcoin’s price rising it was starting to give traditional currencies competition.
After the bitcoin whitepaper was published in 2008, The first exchange rate for bitcoin was established on bitcointalk.org when it was traded there for a period before being traded on other sites. On October 5, 2009, user Laszlo of bitcointalk.org purchased two pizzas from Papa John’s for 10,000 bitcoins, which was around $25 at the time, and this was the first bitcoin transaction, this accelerated the cause of bitcoin’s history.
Bitcoin and money laundering
As Bitcoin transactions gained momentum in 2011 many fraud scams and money laundering schemes were linked to bitcoin at this point the legitimacy of the coin was questioned especially with the person who invented bitcoin ghost, up to this day Satoshi Nakamoto creator of bitcoin is a ghost. The use of bitcoin in money laundering schemes continues to this day.
In March 2013, the FBI shut down the Silk Road online black market and seized 144,000 bitcoins worth $28.5 million at the time. In October 2013, the FBI seized an additional 26,000 bitcoins from Silk Road servers.
This time one bitcoin was just a little over 0.08 USD. In 2010 American Developer Gavin Andresen donated over 19,000 free bitcoins for people who solved the captcha problem on his faucet site. 18 months later he became the chief scientist of the Bitcoin Foundation.
In 2012 Coinbase a bitcoin wallet that facilitated the bitcoin community to buy bitcoin and sell bitcoin was created in San Francisco CA. This became the blueprint of the bitcoin bubble.
Bitcoin mining
The manner in which new bitcoins are produced is known as bitcoin mining. Miners are compensated in bitcoins for verifying and validating transactions on the blockchain. Because bitcoin mining is a power-intensive operation, some miners have formed mining pools to share resources and rewards.
In 2014, China became the world’s most prolific bitcoin miner, with more than 62% of overall bitcoin mining operations. Bitmain is a Beijing-based corporation that produces bitcoin mining hardware and runs a mining pool. In 2017, it was estimated that over 80% of all bitcoins had been mined. As the number of bitcoins in circulation approaches 21 million, the value of each coin will continue to increase.
As a result of this many bitcoin miners were bought in by this and the price of bitcoin rose to an all-time high, making some millionaires in the process. Other digital currencies and virtual currencies started growing at the start of the decade with many organizations starting accepting bitcoins and the whole bitcoin system with the cryptocurrency community growing by the day.
What is a bitcoin address?
Bitcoin address is an alphanumeric character string, used to represent a destination for a bitcoin payment. Bitcoin addresses are created and stored in the Wallet application. Addresses can be generated at no cost by any user of Bitcoin.
When you send bitcoins, the bitcoins are sent to an address on the blockchain that corresponds to the public key (a long alphanumeric string) you provided when you created the address.
For example, if Jane wants to send bitcoins to Dan, she must first know Dan’s public key. She can then utilize her wallet to generate a unique address that corresponds to Dan’s public key. After that, Jane may send bitcoins from her address to Dan’s by means of the above process. The private keys are never shared and allow the owner of a Bitcoin address to send bitcoins that have been sent to that particular address.
Bitcoins are created as a reward for a mining process. They can be exchanged for other currencies, through cryptocurrency exchanges or other conventional currencies and online exchanges. As more bitcoin users use bitcoin software the bitcoin market value has been for rising over a decade and transactions occurring every minute.
What next for fiat currencies?
Many organizations started to accept bitcoin the price has grown over 10000% in just over a decade. With more countries looking into regulating and even banning cryptocurrencies what does the future hold for fiat currencies? Will we see a world where bitcoin is used more than fiat? Or will central banks clamp down on cryptocurrencies? Only time will tell.
The future of fiat currencies is likely to be digital. The days of paper and coin money are numbered. The advantages of digital money over physical money are too great to ignore. With the advent of the internet, the global economy has become more and more connected. Physical borders are no longer a barrier to commerce or communication. It only makes sense that the next step in the evolution of money would be a digital currency that knows no borders.
A digital currency would also allow for more transparency and greater efficiency in government. Tax collection could be automated and corruption could be reduced. The global economy would become more stable and secure.
The transition to a digital fiat currency is not likely to happen overnight. It will take time for governments to warm up to the idea and for the infrastructure to be put in place. But it is inevitable. Sooner or later, all fiat currencies will be digital.
