What Is Bitcoin (BTC)? Founder, Bitcoin Uniqueness
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What Is Bitcoin (BTC)?
Bitcoin is a decentralized cryptocurrency originally described in a 2008 whitepaper by an individual, or group of people, using the alias Satoshi Nakamoto. Soon after, it was launched in January 2009.
Bitcoin is a peer-to-peer online currency, meaning that all transactions take place directly between equal, independent network participants, without the permission or convenience of an intermediary. According to Nakamoto's own words, bitcoin was created "to allow online payments to be sent directly from one party to another without a financial institution."
Some concepts for a similar type of decentralized electronic currency predate BTC, but bitcoin holds the distinction of being the first cryptocurrency to be in actual use.
Who Are the Founders of Bitcoin?
The original inventor of bitcoin is known under the pseudonym, Satoshi Nakamoto. As of 2021, the true identity of the person – or organization – behind the surname remains unknown.
On October 31, 2008, Nakamoto published a whitepaper for bitcoin, which detailed how a peer-to-peer, online currency could be implemented. He proposed using a decentralized ledger of transactions packaged in batches (called "blocks") and secured by cryptographic algorithms – the whole system would later be dubbed the "blockchain".
Exactly two months later, on January 3, 2009, Nakamoto mined the first block on the bitcoin network, known as the Genesis Block, thus launching the world's first cryptocurrency. Bitcoin cost $0 when it was first introduced, and most bitcoins were obtained through mining, which required only moderately powerful equipment (such as a PC) and mining software. The first known bitcoin commercial transaction took place on May 22, 2010, when programmer László HanÃez traded 10,000 bitcoins for two pizzas. At the price of bitcoin today in mid-September 2021, those pizzas would be worth an astonishing $478 million. The event is now known as "Bitcoin Pizza Day". In July 2010, bitcoin first began trading, at which time the price of bitcoin ranged from $0.0008 to $0.08.
However, while Nakamoto was the original inventor of bitcoin, as well as the author of its first implementation, he handed over control of the network alert keys and code repository to Gavin Andresen, who later became the lead developer at the Bitcoin Foundation. Over the years a large number of people have contributed to improving cryptocurrency's software by removing vulnerabilities and adding new features.
Bitcoin's source code repository on GitHub lists more than 750 contributors, some of the prominent ones being Vladimir J. Van der Laan, Marco Falke, Peter Vuil, Gavin Andresen, Jonas Schnelly and others.
What Makes Bitcoin Unique?
The most unique advantage of bitcoin comes from the fact that it was the first cryptocurrency to hit the market.
It has managed to create a global community and spawn an entirely new industry of millions of enthusiasts who create, invest, trade and use bitcoin and other cryptocurrencies in their daily lives. The emergence of the first cryptocurrency created an ideological and technical basis that later inspired the development of thousands of competing projects.
The entire cryptocurrency market – now worth over $2 trillion – is based on the idea realized by bitcoin: money that can be sent and received anywhere in the world, without relying on trusted intermediaries such as banks and financial services companies.
Thanks to its pioneering nature, BTC remains at the top of this energetic market after more than a decade of existence. After the bitcoin price hit an all-time high of $64,863.10 on April 14, 2021, it remains the largest cryptocurrency with a market capitalization crossing the $1 trillion mark in 2021, even after it lost its undisputed dominance. has gone. It is largely due. Part of the growing institutional interest in bitcoin and the ubiquity of platforms that provide use cases for BTC: wallets, exchanges, payment services, online games, and more.
How Much Bitcoin Is in Circulation?
The total supply of bitcoin is limited by its software and will never exceed 21,000,000 coins. New coins are created during a process known as "mining": as transactions are transmitted across the network, they are picked up by miners and packed into blocks, which in turn perform complex cryptographic calculations. are protected by.
As compensation for spending their computational resources, miners receive a reward for each block they successfully add to the blockchain. At the time of bitcoin's launch, the reward was 50 bitcoins per block: this number halved with every 210,000 new blocks mined - which took the network about four years. As of 2020, the block reward has been halved three times and consists of 6.25 bitcoins.
Bitcoin is not pre-generated, which means that none of the coins are mined and/or distributed among the founders before they become available to the public. However, during the first few years of BTC's existence, competition among miners was relatively low, allowing early network participants to accumulate significant amounts of coins through regular mining: Satoshi Nakamoto alone believed to have over a million bitcoins. goes.
Depending on the current hash rate and the price of bitcoin, mining bitcoin can be very profitable for miners. While the process of mining bitcoins is complex, we discuss how long it takes to mine one bitcoin on CoinMarketCap Alexandria – as we wrote above, mining bitcoin is best understood as a block, as opposed to a bitcoin. How long does it take to mine? As of mid-September 2021, the bitcoin mining rewards have been limited to 6.25 BTC after the 2020 halving, which is roughly $299,200 worth of bitcoin today.
How Is the Bitcoin Network Secured?
Bitcoin is secured with the SHA-256 algorithm, which belongs to the SHA-2 family of hashing algorithms, used by its fork Bitcoin Cash (BCH) as well as many other cryptocurrencies.
What Is Bitcoin’s Role as a Store of Value?
Bitcoin is the first decentralized, peer-to-peer digital currency. One of its most important functions is its use as a decentralized store of value. In other words, it confers ownership rights as a physical asset or a unit of account. However, the latter store-of-value function has been debated. Many crypto enthusiasts and economists believe that mass adoption of the top currency will usher us into a new modern financial world where transaction volume will be represented in smaller units.
The smallest units of bitcoin, 0.00000001 BTC, are called satoshis (or sats for short), pseudonymous for the creator. Now at the price of bitcoin, 1 satoshi is roughly equal to $0.00048.
Top crypto is considered a store of value to many rather than a currency, such as gold. This idea of the first cryptocurrency as a store of value rather than a payment method means that many people buy crypto and hold it for a long period of time (or HODL) rather than spend it on items like they normally would. spend dollars - treat it as digital gold.
Crypto Wallets
The most popular wallets for cryptocurrency include both hot and cold wallets. Cryptocurrency wallets differ from hot wallets and cold wallets. Hot wallets can be connected to the web, while cold wallets are used to keep large amounts of coins out of the internet.
Some of the top crypto cold wallets are Trezor, Ledger, and CoolbitX. Some of the top crypto hot wallets include Exodus, Electrum, and Mycelium.
Still not sure which wallet to use? Check out CoinMarketCap Alexandria's guide on the top cold wallets of 2021 and the top hot wallets of 2021.
How Is Bitcoin’s Technology Upgraded?
A hard fork is a radical change in the protocol that makes previously invalid blocks/transactions valid, and therefore requires all users to upgrade. For example, if users A and B disagree on whether an incoming transaction is valid, a hard fork can make the transaction valid for users A and B, but not for user C.
A hard fork is a protocol upgrade that is not backward compatible. This means that each node (a computer connected to the bitcoin network using a client that performs the task of validating and relaying transactions) needs to be upgraded with a hard fork before the new blockchain and any changes from the old blockchain. Blocks or rejects the transaction. The old blockchain will continue to exist and accept transactions, although it may be incompatible with other new bitcoin clients.
A soft fork is a change in the bitcoin protocol in which only the first valid block/transaction is made invalid. A soft fork is backward-compatible since the old nodes consider the new blocks to be valid. Implementation of the new rules for such forks only required most miners to upgrade.
Some examples of major cryptocurrencies that have gone through hard forks are the following: Bitcoin hard fork resulting in bitcoin cash, Ethereum hard fork resulting in Ethereum classic.
With the creation of Bitcoin SV, Bitcoin Cash has been hard forked since its original forking.
What Is Taproot?
Taproot is a soft fork that combines BIP 340, 341, and 342 together and aims to improve the scalability, efficiency, and privacy of the blockchain by introducing a number of new features.
Two major changes are the introduction of Mercalized Abstract Syntax Tree (MAST) and Schnorr Signatures. MAST introduces a condition that allows the sender and recipient of a transaction to sign its settlement together. Schnorr Signature allows users to aggregate multiple signatures into one for a single transaction. This results in multi-signature transactions looking more similar to regular transactions or more complex transactions. By introducing this new address type, users can also save on transaction fees, as even complex transactions look like simple, single-signature ones.
While HODLers probably won't notice a major impact, Taproot could mark a significant milestone in equipping the network with smart contract functionality. In particular, Schnorr Signatures will lay the foundation for building more complex applications on top of existing blockchains, as users begin to primarily switch to Taproot addresses. If adopted by users, Taproot, in the long run, could see the network develop its own Defi ecosystem, which rivals those on alternative blockchains such as Ethereum.
What Is the Lightning Network?
The Lightning Network is an off-chain, layered payment protocol that operates a bidirectional payment channel that allows for instant transfers with instant reconciliation. It enables private, high volume and trustworthy transactions between any two parties. The Lightning Network measures transaction capacity without incurring the costs associated with transactions and interventions on the underlying blockchain.
How Much Is Bitcoin?
The current valuation of bitcoin is rising steadily, every day throughout the day. It is actually a global property. Beginning with less than one cent per coin, the price of BTC has increased by thousands of percent similar to what you see above. The prices of all cryptocurrencies are quite volatile, meaning one's understanding of how much bitcoin is worth will change by the minute. However, there are times when different countries and exchanges show different prices and understanding how much bitcoin is worth will be a function of an individual's location.
Where Can You Buy Bitcoin (BTC)?
Bitcoin is, in many ways, almost synonymous with cryptocurrency, which means you can buy bitcoin on almost every crypto exchange – both for fiat money and other cryptocurrencies. Some of the main markets where BTC trading is available are:
- Binance
- Coinbase Pro
- OKEx
- Kraken
- Huobi Global
- Bitfinex
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