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Bitcoin (BTC) is a decentralized, peer-to-peer digital currency and monetary system created in 2009 by a person or group using the pseudonym Satoshi Nakamoto.
It’s referred to as a cryptocurrency because it uses cryptography to secure and verify transactions and create new units.
Bitcoin can be separated into two distinct parts. The first part is the larger concept and system (or network) representing a decentralized digital currency, the underlying technology that powers it, the community that uses it, and the broader ecosystem that supports it.
When referring to this aspect of Bitcoin, the word is usually capitalized as the entire concept, and infrastructure is a proper noun.
The second part of Bitcoin is the individual unit of the cryptocurrency, and it’s often written with a lowercase “b” denoting a specific amount of the digital currency.
It’s an important distinction that helps clarify whether one refers to the broader concept of Bitcoin or a specific amount of the cryptocurrency itself.
Overview of Bitcoin
Bitcoin is the first and best-known cryptocurrency and has served as a blueprint for creating thousands of other digital currencies collectively known as altcoins. At its core, Bitcoin runs on blockchain technology, a transparent and tamper-proof ledger that records every transaction made with the cryptocurrency across a distributed network of computers.
One of Bitcoin’s key features is its scarcity. Its total supply is pegged at 21 million coins, with new units created through a process called “mining.”
Bitcoin mining involves powerful computers churning huge amounts of data to find valid solutions for incredibly complex mathematical problems within parameters set by the Bitcoin network. Participants in the exercise, often referred to as miners, earn newly minted bitcoins and transaction fees if they are the first to solve the mathematical problems.
BTC transactions are peer-to-peer, meaning they are conducted directly between two parties without intermediaries. The transactions are also pseudonymous in that the personal details of the parties involved are never revealed. Instead, they are identified by unique cryptographic keys.
Another key BTC feature is its high divisibility. One bitcoin can be broken down into 100 million of its smallest units called satoshis, making it more practical for everyday transactions than fiat currency.
Founders of Bitcoin
The true identity of Bitcoin’s founder is shrouded in mystery. Publicly available information shows that, in 2008, an individual or group of people using the pseudonym Satoshi Nakamoto published a whitepaper titled “Bitcoin: A Peer-to-Peer Electronic Cash System,” which introduced the concept of Bitcoin to the world.
A year later, the mysterious entity released the original version of the BTC software and even mined the first batch of bitcoins. Satoshi was actively involved in Bitcoin’s nascent years. But in late 2010, they withdrew from the project and cut off all communication, leaving Bitcoin’s subsequent development in the hands of its community.
Over the years, there have been concerted efforts to uncover the identity of Bitcoin’s founder, with several individuals claiming they were Satoshi Nakamoto. Some of the more notable people who’ve been speculated to be Satoshi include Australian businessman Craig Wright, Japanese-American physicist Dorian Nakamoto, computer scientist Nick Szabo, and Hal Finney, recipient of the first-ever Bitcoin transaction. But as of the time of writing, there’s been no conclusive proof of Satoshi Nakamoto’s real identity.
Unique features of Bitcoin
Bitcoin boasts several standout features that differentiate it from the traditional financial system and the fiat currencies that power it.
- Decentralization: The Bitcoin network is a vast, distributed system of computers or nodes, with no single authority or entity controlling it. Each of these nodes can independently validate BTC transactions, allowing the network to operate without intermediaries or central points of failure.
- Security: Bitcoin transactions are protected using cryptographic techniques, including hash functions and digital signatures. These techniques and the decentralized nature of the network enable Bitcoin to ensure integrity, authenticity, and non-repudiation of stored data and make it near-impossible for bad actors to tamper with transactions.
- Accessibility: The Bitcoin network transcends national borders allowing anyone, anywhere, to send and receive bitcoins as long as they have an internet connection.
- Limited supply: The Bitcoin protocol has a built-in scarcity that caps the coin’s total supply at 21 million bitcoins. This scarcity, coupled with the high demand for Bitcoin, is one of the reasons for the growth of the cryptocurrency’s value over time.
- Divisibility: Each bitcoin can be divided into much smaller units called satoshis, allowing for microtransactions not possible with fiat currency.
- Pseudonymity: Bitcoin transactions are identified by unique cryptographic keys, meaning the parties’ personal information is not tied to the transactions. While the system does not make you completely anonymous, it offers a certain level of privacy and pseudonymity, which may be enough to keep prying eyes away from you.
Circulating supply of Bitcoin
In the crypto context, circulating supply refers to the number of coins or tokens publicly available in the market. There are currently %curculating_supply% bitcoins that are either held in private wallets or are being traded on crypto exchanges. That number is more than about 90% of Bitcoin’s entire supply, which is expected to become fully available by 2140.
Security measures for the Bitcoin network
Security is a key aspect of any blockchain network, and Bitcoin has a system for ensuring the integrity of transaction data wgich is hemmed by several measures, including:
- Blockchain technology: As previously stated, Bitcoin runs on a decentralized public ledger known as a blockchain. The technology verifies and records transactions, with each transaction, added to a new block of data linked to a previous block to form a chain. It ensures that no one can tamper with data on the network, as any attempt to modify one block will invalidate the entire chain.
- Proof-of-work: Bitcoin employs the proof-of-work (PoW) consensus mechanism to ensure the security and decentralization of its network. The process requires miners to solve complex mathematical puzzles that involve finding a 64-digit hexadecimal number called a hash. Solving the puzzle adds new blocks to the blockchain while verifying the transaction data within them. PoW also makes it near impossible to commit fraudulent activity on the Bitcoin network, as it would require a lot of time and ruinously expensive amounts of computational power to tamper with data on the blockchain.
- Cryptographic encryption: The network uses advanced cryptographic techniques to create unique digital signatures for every transaction carried out on it. This ensures that only the rightful parties can authorize and sign off transactions.
- Mining difficulty: This is a measure of how hard it is to solve the mathematical problem that allows miners to find new bitcoins while maintaining consistent block generation times. An algorithm adjusts the mining difficulty every time 2,016 new blocks are added to the Bitcoin network, which happens roughly every two weeks. The process is meant to prevent bad actors from manipulating the network by creating blocks faster than everyone else.
- Network consensus: On Bitcoin, a majority of participants must agree on the validity and order of a transaction before it’s added to the blockchain. It ensures that all participants run a consistent and agreed-upon copy of the Bitcoin network, making it difficult for anyone to create and profit from a doctored version.
However, its worth noting that despite all these layers of security, exploitable vulnerabilities can still exist, meaning Bitcoin users need to exercise the greatest caution to protect themselves from scams, phishing attacks, and malicious software.
Bitcoin as a store of value
Many Bitcoin proponents often refer to the cryptocurrency as a store of value, given its supposed ability to retain its purchasing power over long periods.
In the years it has existed, Bitcoin has shown some characteristics similar to traditional stores of value like gold, including scarcity and durability. Only 21 million bitcoins will ever exist, creating a perception of scarcity akin to precious metals.
Furthermore, the decentralized nature of Bitcoin, coupled with the security measures mentioned above, has made it one of the more durable digital assets in existence today.
Nonetheless, Bitcoin’s status as a store of value is still the subject of furious debate in crypto and financial circles. The biggest stain on its reputation is its price volatility, which has fluctuated between rapid growth and sharp corrections on numerous occasions over the years.
Technology upgrades: Taproot and Lightning Network
Bitcoin has received several upgrades over the years to improve its scalability, privacy, efficiency, and functionality.
Two of the blockchain’s most notable upgrades are Taproot and the Lightning Network, which have made it more practical for everyday transactions, accessible to more users, and enabled new applications and innovations within its ecosystem.
This Bitcoin upgrade, activated on Nov. 14, 2021, aimed to improve the network’s privacy, scalability, and security through a Merklized Abstract Syntax Tree (MAST) technique. This technique combines several transactions and signatures into one, making them faster and less costly to verify.
Taproot also introduced Schnorr signatures, a digital signature scheme that can be used to verify the authenticity and integrity of messages. This scheme is more flexible and secure than the elliptic curve digital signature algorithm (ECDSA) previously used to verify messages on Bitcoin.
Schnorr signatures enable key aggregation, which allows multi-signature transactions and smart contracts to look like regular transactions, thereby improving Bitcoin’s privacy.
This layer-2 payment protocol operating on top of the Bitcoin network is designed to allow fast, low-cost off-chain transactions. It operates by establishing bi-directional payment channels that allow users to conduct multiple transactions without having to broadcast them to the main blockchain, thus reducing congestion and lowering transaction fees.
The Lightning Network was proposed by Thaddeus Dryja and Joseph Poon in 2016, and later developed by Lightning Labs, led by Elizabeth Stark. Like the main Bitcoin network, the Lightning Network is designed to be scalable, secure, and private, allowing users to make transactions without intermediaries or trusted third parties. A beta version of the Lightening Network was launched in March 2018 by Lightning Labs company.
Corporate holders of Bitcoin
Bitcoin has become more mainstream in the last few years, and its soaring value before the extended bear market of 2022 made it a viable investment option for many institutional investors. Data from Buy Bitcoin indicates that as of July 2023, the top five private corporate holders of bitcoin include Grayscale, Mt. Gox, Block.one, MicroStrategy, and Tether Holdings.
Together, these five entities hold nearly 1.2 million BTC valued at about $36 billion at the current price. This is more than 5.6% of Bitcoin’s total supply. Among the corporate holders, Grayscale has the largest stash of bitcoins; about 643,000, with a market value just north of $19 billion.
According to Buy Bitcoin, bankrupt Japan-based crypto exchange Mt. Gox, which lost more than 650,000 BTC to hackers between 2011 and 2014, has 200,000 bitcoins in its coffers, making it the world’s second-largest BTC holder.
MicroStrategy, which famously converted most of its treasury into bitcoin under the guidance of CEO Michael Saylor, currently holds more than 152,000 BTC valued at about $4.6 billion. It is followed by blockchain technology provider Block.one, which reportedly holds 140,000 BTC similarly worth upwards of $4 billion.
Tether Holdings rounds up the top five biggest corporate holders of BTC, with 53,000 coins costing no less than $1.6 billion in the current market.
Political implication of Bitcoin
Bitcoin’s potential to disrupt the traditional financial system and challenge the centralized control of money governments enjoy has made many fiscal policymakers wary of the technology.
It operates outside the control of central authorities, giving people greater autonomy over their finances and potentially empowering those in countries with unstable financial systems or limited access to banking services.
The cryptocurrency’s pseudonymous nature has also made it easier for people with privacy and surveillance concerns to make transactions away from prying eyes. However, it has also raised the ire of governments worldwide concerned about the network’s potential use for money laundering, tax evasion, terrorism funding, and other illicit activities.
Some analysts believe that Bitcoin’s resistance to censorship and manipulation by central authorities could cause it to disrupt a country’s monetary policies, especially those designed to raise or lower the value of fiat currency.
Bitcoin’s decentralized and borderless nature makes it difficult for regulators to streamline its use to protect consumers and prevent criminals from leveraging it to move and hide illicit funds. For that reason, different jurisdictions have taken differing approaches to governing Bitcoin use, ranging from outright bans to saddling it with punitive regulatory frameworks.
Current price of Bitcoin
The price of bitcoin in its early days was worth a mere dollar in 2011. Since then, bitcoin’s value has dramatically risen, with its highest price reaching nearly $69,045.00 on November 10, 2021. The BTC price in USD today is $43,313.00 per bitcoin. As an investor, keeping yourself updated with bitcoin news and events is important as it impacts bitcoin price.
Follow crypto.news for up-to-date information on all bitcoin-related news and events.
Where to buy Bitcoin (BTC)
Purchasing BTC involves some easy steps. First, choose a cryptocurrency exchange based on location, payment options, and security measures. You can also buy bitcoin on decentralized exchanges (DEX) which allow users to be anonymous and don’t require providing personal information. In some countries, it’s possible to buy BTC in bitcoin ATMs.
If you choose to buy bitcoin on a centralized exchange, register and verify your identity, and link your payment methods, such as a bank account, debit/credit card, or PayPal account.
Order placement varies with different exchanges, but it generally involves entering the amount of bitcoin you want to buy before confirming your purchase. Once the purchase is complete, transfer the bitcoin to a secure wallet.
Binance, Coinbase, and Kraken are examples of popular centralized exchanges where you can buy bitcoin. Major decentralized exchanges include UniSwap, PancakeSwap, and Curve.
Bitcoin’s energy consumption
Bitcoin’s energy consumption is determined by examining its hash rate, which means the combined processing power utilized to mine bitcoin and process transactions. In 2022 BTC used about 110 Terawatt Hours or about 0.55% of the world’s electrical output.
Crypto wallets for bitcoin
Crypto wallets are software applications or hardware devices where you can store and manage the private keys and public addresses of your bitcoin holding. They allow you to send and receive bitcoin and manage your balances and transactions.
These wallets come in three types: software, hardware, and paper.
- Software wallet: This is an online app, also known as a hot wallet, that you can access through your computer or mobile device that allows you to send and receive bitcoins and store your private keys. Some popular bitcoin hot wallets include CryptoWallet, Electrum, Exodus, BRD, and Atomic Wallet.
- Hardware wallet: This small device, commonly called a cold wallet, keeps your private keys offline, making it less vulnerable to hacks and viruses that could compromise your bitcoins. Some of the most commonly used BTC cold wallets include Ledger Nano X, a crypto hardware that connects to iOS, Android, and desktop computers, and the Trezor Model T, which comes from the oldest crypto security company that made the first bitcoin wallet in 2011, and Ellipal Titan, an air-gapped cold wallet that keeps your private keys away from any internet or Bluetooth connection.
- Paper wallet: This type of wallet involves printing your public and private keys on physical documents. It is also offline and offers better protection against digital attacks compared to software wallets. However, you’ll need to take extremely good care of your paper wallet lest the document gets damaged or falls into the wrong hands. If you are interested in using paper wallets for your bitcoin, you can use Bitaddress.org, a website that lets you generate random BTC addresses and corresponding private keys, which you can print or save as a PDF file.
Bitcoin price analysis
Bitcoin’s price is influenced by a variety of factors. Supply and demand dynamics play a key role, as with any asset: when demand for Bitcoin increases while supply remains fixed, the price tends to rise. Other influences include market sentiment, technological advancements, and regulatory developments. Major world events, like economic downturns, can also trigger price changes as investors seek out digital assets like Bitcoin as “safe havens.” Additionally, the built-in halving events, which cut the reward for mining bitcoin in half roughly every four years, can create anticipatory price increases due to the impending reduction in new bitcoin supply.
Bitcoin, introduced in 2009, first saw significant price movement in 2010, spiking to $0.09. In 2011, BTC price peaked at $29.60 in June before dropping to $2.05 by November.
Fast forward to 2013, Bitcoin started at $13.28 and reached a high of $1,237.55 in December after experiencing sharp fluctuations. By the start of 2015, it was valued at $315.21.
From 2016 through 2020, Bitcoin price saw steady growth, ending 2016 above $900 and shooting to an all-time high of $19,345.49 by December 2017. Though the next couple of years were less eventful, Bitcoin took off again in 2020, largely due to economic uncertainty driven by the COVID-19 pandemic. Starting 2020 at $6,965.72, Bitcoin ended the year just under $29,000.
2021 marked another spectacular year for bitcoin, hitting $40,000 by January and later in April, reaching over $60,000 when Coinbase, a cryptocurrency exchange, went public. However, by July, the price had fallen by 50% to $29,796. Bitcoin reached another high of $68,789 in November 2021 before it dipped to $46,164 in December due to uncertainties around inflation and the Omicron variant of COVID-19.
The first half of 2022 was less kind to bitcoin, with its price steadily declining to a low of $23,000 in June, the first drop below $30,000 since July 2021. As the “crypto winter” set in, bitcoin ended 2022 below the $20,000 mark.
What does Bitcoin halving mean for BTC price?
Bitcoin halving takes place roughly every four years. This event sees the rewards that bitcoin miners receive for successfully mining a block reduced by 50%. The rationale behind this mechanism is to uphold bitcoin’s character as a deflationary asset. By controlling the production of new bitcoins, it aims to avert long-term devaluation that can occur in currencies susceptible to inflation.
Historically, the approach to a halving event has seen bitcoin’s price rise, as market participants predict a forthcoming contraction in supply. Post-halving, if demand persists or even grows, and surpasses the diminished supply, the price often continues to ascend. It’s important to remember, however, that bitcoin’s price can be influenced by a variety of factors, including market mood, regulatory changes, and world affairs.
How Bitcoin works
As previously stated, Bitcoin is based on a decentralized database known as a blockchain, which is maintained and updated by a network of individuals known as miners. Anyone can join the Bitcoin network and contribute to its upkeep by installing specialized software and downloading a copy of the blockchain.
A user with a Bitcoin wallet and a valid private key can start a transaction on the Bitcoin network, which is then broadcasted to all network members, who validate it by confirming its accuracy, authenticity, and compliance with the blockchain’s protocol.
When the transactions are validated, they are grouped into blocks and added to the network chronologically.
To secure Bitcoin and add new transactions to the blockchain, participants compete to solve complex mathematical problems in a process known as mining that uses substantial computational power. The first miner to solve the problem gets to add the new block to the network and receives the newly minted BTC as a reward. This reward is reduced by half every time 210,000 new blocks are added to the Bitcoin blockchain, which takes about four years until Bitcoin’s entire supply is finally released.
Additionally, these miners need to reach a consensus on the valid state of the Bitcoin network through a majority vote, where the longest block is often regarded as the valid chain, and participants work to extend it. This way, all participants are guaranteed to run a shared and agreed-upon version of the Bitcoin blockchain.
Management of Bitcoin
Being a distributed system, Bitcoin operates without the need for a central authority. However, it’s managed through a combination of decentralized processes and the consensus of its network participants.
These participants, who include developers, miners, and general users, collectively make decisions affecting the network, including proposed upgrades or changes to its protocol. They discuss and debate proposed changes, ultimately putting them to a vote, with those receiving majority votes getting passed, adopted, and implemented. The implementation of an approved proposal may be done through a hard or soft fork, where a soft fork introduces backward-compatible changes and a hard fork introduces changes that are not backward-compatible and may even result in the creation of a new branch of the Bitcoin ledger as well as new cryptocurrencies such as Bitcoin Cash (BCH) and Bitcoin SV (BSV).
It’s important to note that while the management of Bitcoin is decentralized, there are several major stakeholders, including developers, miners, exchanges, and large private holders of the coin, also known as whales, who play key roles in its development and ecosystem, and who may have far greater influence in its growth, governance, and direction.
Resources for Bitcoin
This page may have covered a vast array of Bitcoin-related information, but the sheer size and complexity of the subject require much more learning. To that end, here are some key resources for anyone interested in knowing more about BTC:
- Bitcoin whitepaper: Written by the pseudonymous Satoshi Nakamoto, this document outlines the concept and principles behind Bitcoin and serves as a foundation for anyone looking to understand the network’s design and functionality.
- Official BTC website: Bitcoin.org provides a wealth of information regarding the oldest cryptocurrency, including guides and basic explanations to get newbies started.
- Forums and social media communities: Online BTC forums and communities on platforms like Twitter and Reddit are great places for discussions, sharing knowledge, and asking questions about Bitcoin.
- Online courses and educational platforms: Many online platforms offer courses, tutorials, and other educational resources focusing on Bitcoin, including Coursera, Udemy, and Khan Academy.
- News outlets and publications: The internet is replete with news websites and publications dedicated to crypto and blockchain technology, including crypto.news, which offers valuable insights into BTC-related news, market trends, and industry developments.
Bitcoin mining process
Bitcoin mining can be likened to a digital treasure hunt, where powerful computers compete to solve complex mathematical puzzles and earn rewards through bitcoins for their trouble.
These computers are called miners, and they collect and verify information, such as who sent or received bitcoins. The information gathered is organized into blocks, which are interconnected to form a chain, hence the term “blockchain.” This process of bundling data involves grouping the information into blocks and linking them together.
To add a block to the existing chain, miners compete to solve a complex mathematical problem associated with each block of data. The first miner to successfully solve the problem earns the privilege of appending the block to the chain and receives freshly minted bitcoins as a reward.
Once a new block is incorporated into the chain, it becomes an immutable part of the permanent record. This characteristic makes it extremely challenging to modify previous transactions without expending significant computational power and attracting attention.
Moreover, the competitive nature of solving the mathematical problem ensures the security of the Bitcoin network. It makes altering the historical records within the blockchain incredibly difficult.
As the Bitcoin blockchain expands in length and more miners join the network, the mathematical problems become increasingly intricate to solve. This difficulty adjustment mechanism guarantees a predictable rate of adding new blocks to the blockchain, typically occurring approximately every ten minutes. The problem’s difficulty automatically adjusts after every 2,016 new blocks, which generally happens every two weeks.
Mining bitcoin demands substantial resources, including specialized hardware that consumes substantial electricity and generates a significant amount of heat.
Value proposition of Bitcoin
Decentralization, security, programmability, anonymity, limited supply, and financial independence are some of the principles supporting Bitcoin’s value proposition.
It gives people more control over their financial resources, provides some measure of privacy, and it transcends international borders to enable quick, reasonably priced transactions.
Some people also view it as a way to hold value, a medium of exchange, a tool for financial innovation, or even a way to protect themselves against inflation.
How can I invest in bitcoin?
There are two main ways to invest in bitcoin: buying and holding it directly or purchasing shares in bitcoin investment funds or bitcoin mining companies. You can buy bitcoin on centralized or decentralized exchanges, some traditional stockbrokers and financial platforms like Revolut, and in special bitcoin ATMs.
You can follow the steps below to buy bitcoin on a crypto exchange:
1. Select a reputable crypto exchange that supports bitcoin and create an account.
2. Link your bank account or card to the crypto exchange and deposit fiat money you’ll use to buy bitcoin.
3. Head to the exchange’s bitcoin trading section and place a buy order for whatever quantity of bitcoin you want to purchase.
4. Store it securely in a digital wallet.
You can also invest in bitcoin through BTC investment funds managed by professionals who make investment decisions on behalf of clients.
By investing in such funds, individuals can gain exposure to bitcoin’s potential returns without directly owning and storing the crypto asset.
What are the advantages of using bitcoin?
Decentralization: Bitcoin is governed by a global community of users, meaning it is outside the control of any government or financial institution. As such, the coin is not subject to the same overbearing regulations and oversight as traditional currencies, thus promoting financial freedom and giving users complete control over their funds.
Lower transaction fees: Because bitcoin transactions do not involve intermediaries like banks and payment processors, the fees associated with them are negligible. It makes BTC appealing for people and organizations wishing to cut transaction costs such as cross-border payments.
Fast transactions: Besides being cheap, bitcoin transactions are relatively quick compared to the traditional financial system. The decentralized nature of the Bitcoin network allows for transactions to be verified, validated, and settled within minutes, regardless of the amount of funds being moved.
Privacy and pseudonymity: Contrary to popular belief, bitcoin transactions are not completely anonymous; instead, they provide pseudonymity. It means that bitcoin users can only be identified by their unique wallet addresses rather than their personal information, thereby giving them a modicum of privacy since they can make transactions without revealing their identities. No one can link transactions to specific users unless wallet addresses are publicized. This privacy surpasses traditional currency systems, where personal financial data can be accessed by third parties more easily.
Security: BTC transactions are safeguarded by a global computer network that verifies and verifies them through mining. Miners solve complex mathematical problems to add new blocks to the bitcoin chain, ensuring the integrity of the network’s transactional history. Additionally, since Bitcoin is decentralized and distributed, any attempt to tamper with the blockchain would require massive computational power and consensus from the majority of the network, a near-impossible feat to accomplish.
How do I store my bitcoin securely?
There are several ways you can store your bitcoins securely:
Software wallet: This is an online software application running on a computer or mobile device that allows you to send and receive bitcoins as well as store your private keys, secret codes that prove ownership and give you access to your bitcoins.
Hardware wallet: This is a physical device that often looks like a USB drive that stores your private keys offline. Hardware wallets are more secure than software wallets since they usually work offline, making them less susceptible to hacks and viruses.
Paper wallet: A third way to store BTC is to use paper wallets, which are physical documents with your public and private keys printed on them. Paper wallets are also offline and secure from digital attacks, but they need to be handled with care so as not to be damaged or lost.
Can I mine bitcoin on my personal computer?
Yes, but it is not profitable in the current landscape. In the early days, it was possible to make money mining BTC using CPUs (central processing units) found in personal computers (PCs). However, the increased mining difficulty, which regulates the rate at which new bitcoins are created, has rendered most PCs inefficient and impractical due to their high electricity consumption, low hashing power, and extremely limited chances of successfully mining a block.
What are the risks associated with investing in bitcoin?
There are several risks that come with bitcoin investment, including:
Volatility: The value of BTC can fluctuate significantly over short periods, resulting in substantial losses.
Market manipulation: Because of their speculative nature, cryptocurrencies, including bitcoin, are susceptible to manipulative activities such as pump-and-dump schemes, rug pulls, fake news, and coordinated trading, which can all inflate or deflate their value and lead to potential losses for unsuspecting investors.
Regulatory uncertainty: Like most cryptocurrencies, bitcoin is currently operating in an evolving regulatory environment. Many jurisdictions worldwide have yet to make hard-and-fast rules to govern bitcoin and other crypto assets. Policies, including potential bans on bitcoin, could negatively affect the cryptocurrency’s legal status, lessening its value, impacting crypto markets, and dampening investor sentiment. Additionally, the lack of regulations aimed at protecting investors leaves them at the mercy of scammers, fraudsters, and unreliable platforms, often without recourse for getting their funds back in case they are stolen or mishandled.
Security risks: Bitcoin transactions have been touted as highly secure, but there are gaping holes in the manner of their storage and management that bad actors can exploit. Hackers have been known to target crypto exchanges as well as individual users to gain access to wallets and steal millions of dollars worth of bitcoins.
Loss of access: Losing your private keys may cause you to lose access to your bitcoin holdings permanently.
Is bitcoin anonymous?
No. It is pseudonymous, meaning that it does not directly reveal the identities of parties in a transaction, but the transactions are linked to unique addresses whose histories are publicly available and can be analyzed to reveal real-world identities potentially.
Can I use bitcoin for everyday purchases?
Yes. While bitcoin’s adoption as a mainstream payment method is still evolving, it is increasingly possible to use it for everyday purchases in various contexts. You can find online and offline businesses, including giant retailers, mom-and-pop shops, restaurants, hotels, travel agencies, and service providers, that accept bitcoin.
Some payment processors, such as CoinGate and BitPay, also allow merchants to accept bitcoin payments and convert them into local currency, thus simplifying the integration of BTC as a payment option.
There are also mobile wallet apps that allow you to make BTC payments using your smartphone. Some companies also offer cards linked to your bitcoin wallet that convert your bitcoin into the local currency during a transaction, thus allowing you to make purchases just like with a regular debit or credit card.
What is the difference between bitcoin and other cryptocurrencies?
Bitcoin stands out from other cryptocurrencies on the market for several reasons:
Pioneering role: BTC was the first cryptocurrency to hit the market in 2009, gaining significant recognition, adoption, and a community built around it.
Dominance: Because of its longevity, name recognition, adoption, and underlying mechanism, BTC has grown to have the lion’s share of the crypto industry’s market capitalization and liquidity. Currently, BTC alone has a higher market cap than the 25 next-biggest cryptocurrencies combined.
Monetary policy: Bitcoin has a finite supply capped at 21 million coins. It means that it is a deflationary asset, which sets it apart from other cryptocurrencies, which may have unlimited or variable supplies with different emission rates or mechanisms for controlling inflation.
Consensus mechanism: BTC uses a proof-of-work (PoW) consensus mechanism, which requires miners to compete to solve complex mathematical problems to validate transactions and secure the network. Other cryptocurrencies use different consensus mechanisms such as proof-of-stake (PoS), delegated proof-of-stake (DPoS), or some variation of them that are more energy-efficient and scalable than PoW.
How can I protect myself from bitcoin scams?
Always stay up-to-date with information regarding the latest trends and techniques used by scammers and fraudsters.
Use reputable and secure bitcoin wallets, preferably hardware wallets that stay offline. Additionally, make sure your wallet has robust security features, including two-factor authentication (2FA) and high-grade encryption.
Regularly update your devices, operating systems, and software applications. Use strong passwords for your BTC-related accounts and enable 2FA whenever possible.
Fraudsters increasingly resort to phishing attacks by mimicking popular BTC platforms and services; therefore, you’ll have to exercise great caution when visiting websites or using online services. Double-check URLs, use bookmarks, or search for official websites through trusted sources.
Make sure to do your own research before investing. If an investment opportunity sounds too good to be true, it probably is. Let skepticism be your default attitude when faced with promises of high-yield investments and guaranteed returns.
Double-check payment addresses when making BTC transactions. Additionally, exercise caution in peer-to-peer transactions and make sure to use reputable platforms with escrow services. If possible, consider meeting in person for high-value transactions, always making sure to prioritize your personal safety.
When did Bitcoin start?
Bitcoin came into public consciousness in October 2008 following the publication of a whitepaper titled “Bitcoin: A Peer-to-Peer Electronic Cash System” by the pseudonymous Satoshi Nakamoto. In the whitepaper, Satoshi outlined the concept of cryptocurrency and the blockchain technology that would power it.
Satoshi mined the first block of the Bitcoin blockchain on Jan. 3, 2009, a date that officially launched the Bitcoin network and marked the start of its transactional history.
Who owns Bitcoin?
No one owns Bitcoin. It is a decentralized digital network with no central authority, meaning ownership is distributed among its users globally.
People who hold bitcoin are, in essence, owners of the coins in their respective wallets (as long as they have the private keys to prove it). Still, the network is maintained by a decentralized community of users who secure it and validate transactions through mining.
The ownership of individual bitcoins constantly changes as more transactions take place, and their overall distribution is not centrally controlled or managed by a specific entity.
BTC Price Statistics
|Price Change 24h||-1.6%|
|Price Change 7d||14.61%|
|Trading Volume 24h||$26,893,270,124|
Bitcoin Market Cap
|Market Cap Rank||#1|
|Market Cap||$847,155,100,438 -1.69%|
|Fully Diluted Valuation||$909,356,468,574|
Bitcoin Price History
|All-Time High November 10, 2021||$69,045.00 -37.4%|
|All-Time Low July 6, 2013||$67.81 63643.74%|