The explosion of cryptocurrencies from the period before the pandemic compared to last year till today has been pretty remarkable! Which has left many asking the same question: what is bitcoin?
That's the same question I asked myself in 2017 when I was researching blockchains. The price for 1 BTC on September 1, 2017, was $ 5,013.91. Crazy, right? The virtual coin, which no central bank controls, was worth more than $5000 for the first time in 2017. The exciting part was, the price spiked to $19,783.06 in December that same year!
Years later, we're still reading news of Bitcoin being DIGITAL GOLD— and my family still doesn't understand what Bitcoin is. After almost four years of researching and investing a little bit myself, I think I know. Or at least, I know enough to help you map out the chronicles of Bitcoin to gain some basic understanding.
What is Bitcoin?
Before delving into the unfolding events that brought about this cryptocurrency, it is essential to have a fair idea of what it is. Bitcoin is a cryptocurrency that frees your finances from the claws of governments and banks.
That's an intriguing yet confusing one-liner, isn't it? My apologies. Let me break it down a bit more.
Cryptocurrencies are digital tokens that are neither backed by assets or issued by governments. This means you are your bank and do not need the approval of any branch manager to make transactions.
Now, let us see the timeline of the inception of Bitcoin.
2008: Birth of Bitcoin
Central banks incorporated an unconventional monetary policy and began injecting liquidity into the system to address the financial crisis that started in 2008 with the collapse of subprime mortgages in the United States. The economic crisis was the perfect storm that laid the groundwork for the birth of Bitcoin (BTC), a new electronic currency.
A pseudonymous person named Satoshi Nakamoto presented the concept of Bitcoin to the world on October 31, 2008, amid the financial crisis. "Bitcoin P2P e-cash paper," and a white paper titled "Bitcoin: A Peer-to-Peer Electronic Cash System" was posted by Satoshi.
2009: First transaction
In January 2009, Satoshi Nakamoto mined the first block of Bitcoin, known as the genesis block, for which he received 50 Bitcoin. Nakamoto then sends 10BTC to the late Hal Finney. 1BTC was worth $0 in January 2009, shocking, right?
● What is mining?
Not your typical underground digging to find precious goodies but using fast computers to solve complex equations to receive rewards—BTC.
2010: The $618,681,000 Papa John's Pizza!
Yeah, you read that right! $618 million or 10,000 BTC for two boxes of Pizza. Don't judge. The rate of bitcoin then was around $0.004 to 1 BTC. Laszlo Hanyecz didn't know 1 BTC would be worth $62,000 on October 18, 2021. May 22 is Bitcoin Pizza Day, and it is celebrated by the crypto community, our very own "Don't be like..." meme.
2021: Fast forward to Legal tender
El Salvador shocked the world when it became the first government to accept Bitcoin as legal tender. This news sparked a debate in the country and worldwide about the benefits and risks of cryptocurrencies. Businesses will be required to accept cryptocurrency as a form of payment.
What's my take on Bitcoin?
I am not a financial advisor, and any information you get from this article shouldn't necessarily be to push you to invest in BTC. That being said, I own some crypto, as I believe they make an excellent investment and the beginning of new financial freedom, and you should consider doing so too.