Each week we will be deep-diving into one of our crypto assets that we host on Wirex. The purpose of this is to help give a better understanding of what these coins represent and why they were created in the first place. In general, most view crypto as a commodity that they could possibly make some trades on, but many might not know the true purpose that those coins serve. Therefore, without further ado, we are kicking off this series with the most well known of all crypto, Bitcoin.
Bitcoin’s mysterious beginnings still have people very curious on who could possibly be the real face behind this digital currency. Some say it was created by one man, who is known as Satoshi Nakamoto (a pseudonym), while others say it was a group of individuals helping to write the code and white paper. But despite these unanswered questions, what everyone can agree on is what it was built for. Which was to create a digitally exclusive currency that had no need for a middleman or central authority. It set out to achieve peer-to-peer transactions that were private, (your personal information was not attached to the transactions), transparent (all transactions can be viewed on the blockchain, a publicly distributed ledger) and provided an alternative to traditional currency and transferring funds.
Bitcoin’s emergence came in August of 2008 when the domain for bitcoin.org was registered. Later, in October of the same year, the whitepaper was introduced and by January 2009 Nakamoto launched the Bitcoin network by mining the genesis block (block 0) of bitcoin. In order for Bitcoin to not be put into a ‘one man to rule it all’ category, a system was put into place where bitcoin users were given the reins. Therefore, Bitcoin can only work with a complete consensus amongst all the users and of course is equally protected by strong peer-reviewed cryptographic algorithms. These users also known as miners were created in order to support, validate/approve and monitor the Bitcoin network.
Originally, no one apart from those in the know, understood what the true potential of BTC was. There were many nay-sayers. However, it was back in 2010 when BTC started gaining some traction and was viewed as something more than just a novelty. This was especially apparent when news broke in May of that year, that a man by the name of Laszlo Hanyecz decided to trade his 10,000 BTC for two pizzas. At that time the price of one BTC was less than $0.01. Therefore, Hanyecz’s transaction had cost him roughly around $40. If he had decided to do the transaction a couple of month prior, in March, which would have been easily possible since the appearance of the first ever BTC exchange was created called Bitcoin Market, the price per one BTC would have been $0.003. Slowly, as people started to see the benefits of a decentralised system, new contenders, otherwise known as altcoins started to trickle in. From 2011 onwards, these rivals, such as Litecoin wanted to challenge and improve upon Bitcoin’s design.
So what could be some of the reasons of why Bitcoin appeals to people? Well for one thing, it offers payment freedom. Anyone using this form of currency can send payments at any time. That means no waiting on traditional banks and their respective holidays. It’s borderless and there is no bureaucracy involved, which means, users are in full control of their money. Other potential perks are it minimises risk to merchants since it’s open for all to see. No personal information is given which reduces identity theft and losses caused by fraud. And lastly, because no organisation, or individual for that matter, can manipulate or control BTC protocol due to it being cryptographically secure, it allows the essence of it, it’s core, to be trusted. Meaning it is seen as being effectively transparent and neutral.
Now, in 2020 there are thousands upon thousands of cryptocurrencies out there. Some can even be deemed as having created very worthy opponents. But, let’s face it, there will always be only one Bitcoin. The original disruptor, which started a movement into a new era of blockchain technology. And of course, with the price of one Bitcoin currently standing at $9,797.43 we think Nakamoto could have been on to something.
As far as what’s in store for Bitcoin in the future, well, we’ll leave that one to the analysts.