Bitcoin is the first cryptocurrency that has gained worldwide popularity. It is a peer-to-peer digital cash system.
What is Bitcoin?
- Launched in 2009, Bitcoin is the first blockchain-based currency, or cryptocurrency (also known as a digital asset).
- It follows a decentralized methodology and is based on Blockchain technology, which processes transactions and records them in a computer network through a distributed ledger system.
- It records transactions in a transparent manner on a decentralised network; allowing Bitcoin to be trackable, secure, and not under the control of a single authority or government.
- BTC is the first virtual currency to solve the double-spending issue by timestamping transactions before broadcasting them to all of the nodes in the Bitcoin network.
- Bitcoin’s whitepaper was published pseudonymously in 2008 by an individual, or a group called “Satoshi Nakamoto”, whose identity still cannot be verified.
- The Bitcoin protocol uses an SHA-256d-based Proof-of-Work (PoW) algorithm to reach network consensus. Its network has a target block time of 10 minutes and a maximum supply of 21 million tokens, with a decaying token emission rate.
|Total Token Supply||21,000,000|
|Current Circulating Supply||See Coinmarketcap|
|Market Capitalisation||See Coinmarketcap|
|Token Creation Date||Dec 2008|
|Can it be mined?||Yes|
Who is behind Bitcoin ?
BTC’s Creator Satoshi Nakamoto is still an anonymous person or group of people who authored the Bitcoin white paper in 2008.
Now Bitcoin is an open-source project with global development communities and more than 600 contributors on GitHub, as of the time of writing.
What is the purpose of Bitcoin?
Bitcoin was created with the purpose of facilitating online payments in a fast and cost-efficient way. It is a decentralized digital currency on the peer-to-peer network where transactions can be done between users on the worldwide computer networks without the need for intermediaries or the intervention of financial institutions.
The Bitcoin protocol utilizes the Nakamoto consensus, and nodes validate blocks via Proof-of-Work mining. The bitcoin token was not pre-mined and has a maximum supply of 21 million. The initial reward for a block was 50 BTC per block. Block mining rewards halve every 210,000 blocks. Since the average time for block production on the blockchain is 10 minutes, it implies that the block reward halving events will approximately take place every 4 years. As of May 12th 2020, the block mining rewards were 6.25 BTC per block. Transaction fees also represent a minor revenue stream for miners.
- Bitcoin is the first cryptocurrency in the world
- Bitcoin Mining is a process that takes place when a transaction is made. Miners get BTC tokens as a reward for solving the mathematical equations.
- Bitcoin is one of an excellent Store of Value instead of being a medium of exchange.
- Demand for Bitcoin fluctuates due to the price movement according to the invisible hand directly influencing the price of Bitcoin.
- The coming of new advanced technology that may be better than Bitcoin. For instance, Proof of Work requires intensive energy leading to high cost for miners, therefore, Proof of Stake was invented for a new approach.
News and Updates
- Many large well-known companies are planning on Bitcoin projects i.e.
o Tesla invests $1.50 billion in Bitcoin and announced to accept payments by Bitcoin
o MicroStrategy, a data software company, invests in Bitcoin
o Grayscale, a digital asset investment firm by Grayscale Bitcoin Trust, invests in Bitcoin
Assets under Management (AUM) for currently $31,926.6 billion. (As of February 16, 2021):
- There are some Bitcoin Future trading in Chicago Mercantile Exchange (CME) in 2017
- Involvement of financial Institutions:
o PayPal is planning to accept cryptocurrency by 2021 supporting 4 currencies: BTC, ETH, BCH, and LTC.
o Visa together with its partners is planning to have a digital wallet and trading website so that visa cardholders can trade, withdraw and convert cryptocurrency to Fiat currency for making transactions.
o Mastercard is planning to offer cryptocurrency transactions to Mastercard holders and had registered a patent of many related cryptocurrencies.
- Bloomberg, a financial media, believes Bitcoin will eventually replace gold as investors are rapidly shifting from trading gold to Bitcoin which is held as a Store of Value.
*As cryptocurrency and digital tokens involve high risks, investors may lose all their investment money and should study information carefully, making investments according to their own risk profile.
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