What is Bitcoin? How does it work? What is its history? If you want to know this and much more about the cryptocurrency that leads the cryptocurrency market, here in Crypto-Economy we bring you this guide where you can learn and get to know all the secrets of Bitcoin (BTC).
First of all, Bitcoin is a currency like any other but the main difference is that it is a digital currency. This cryptocurrency has been created based on a sequence of codes known as “blockchain”, which is a cryptographic variant of computer programs on which it works.
History of Bitcoin
When was Bitcoin created?
The Bitcoin story begins in November 2008, when a certain Satoshi Nakamoto published an article on the mail-archive website titled: “A Peer-to-Peer electronic cash system”.
But it was not until 2009 when the software of this new cryptocurrency was released to the public and its network began to function.
Who is Satoshi Nakamoto?
Satoshi Nakamoto is the alias used by the creator of bitcoin. His true identity is mostly unknown, his anonymity is one of the great mysteries that surrounds this cryptocurrency.
It is speculated if it is a person, several or a group of companies, but only a few people know who is actually the author and creator of bitcoin.
On some occasion, it has been rumored about whether he may have died or even people wanting to attribute the authorship of the creation of bitcoin, as happened in May 2016 when Craig Wright said he was satoshi nakamoto and he announced it in an exclusive interview on the BBC:
“I was the main part of it (Bitcoin) but other people helped me”
One year later, Craig Wright himself retracted his words because of the pressure to which he was subjected and did not want to give further evidence of whether or not he was the creator of Bitcoin. After these statements there were also many doubts about whether he really was or not satoshi nakamoto.
“I believed that I could put the years of anonymity and hiding behind me. But, as the events of this week unfolded and I prepared to publish the proof of access to the earliest keys, I broke. I do not have the courage.”
The only known data (which may or may not be true) are those extracted from Nakamoto’s profile in the P2P foundation.
In the attempt to discover the true identity of satoshi several names have been shuffled, as for example Nick Szabo or Hal Finney both prominent cryptographers, although none has been verified.
When it comes to imagine about the name, the most imaginative were not lacking, and have found at the beginning of the name of big companies the answer to the biggest question: Who is Satoshi Nakamoto?
Samsung – Toshiba – Nakamichi – Motorola
Satoshi Nakamoto’s Collaborators in the creation of Bitcoin.
Satoshi did not create bitcoin alone, he was helped by several people, the names of some of those people have been made public, among which we can highlight:
Gavin Andresen: A Software Developer, who was in charge of developing a part of the bitcoin digital currency project.
Martti Malmi: It is said that Martti was Nakamoto’s first collaborator, who disassociated himself from the project in 2011, since according to his statements:
“I felt like bitcoin had already gone from zero to one, so to say. It was already up and running with a growing community and had lots of great developers working on it”
Jeff Garzik: One of the Bitcoin Core developers.
Greg Maxwell: Also participated in the development of Bitcoin Core
Laszlo Haynecz: Was one of the developers who worked on the Bitcoin project from the beginning, although he is best known for being the author of the first purchase with this cryptocurrency, with which he bought a pizza for 10,000 BTC.
Laszlo recently made some statements talking about the Bitcoin project and his relationship with Satoshi Nakamoto.
“I thought bitcoin was awesome, and I wanted to be involved, but I had a regular developing job… Nakamoto would send me emails like ‘Hey, can you fix this bug?’ ‘Hey, can you do this?’” , commented Laszlo.
About Satoshi he said that his communications with him were sometimes quite strange, that he was a rather peculiar and somewhat paranoid type.
Wladimir J. van der Laan: Developer in the Bitcoin Core project
There are many other people who collaborate or have collaborated in the Bitcoin Project, you can see a more complete list in this BitcoinWiki link.
What is Bitcoin?
You could say that bitcoin is a cryptocurrency, an electronic currency or virtual money, during this time it has earned many nicknames, but in the end they all refer to the same. Bitcoin together with blockchain, is a technology that will change the economy as we know it today.
Bitcoin allows you to make transactions without an intermediary (that is, without a bank). It is created through an algorithmic process known as “mining” and is carried out directly by computers, and there is no need to reveal your true identity since the transactions are anonymous and are recorded digitally.
The technology that drives the Bitcoin system is known as Blockchain; it is a computer program that is usually compared to a record book, which automatically processes transactions and creates a perfect and reliable digital record, which is a measure in the right direction to achieve more transparency.
How is a Bitcoin created?
Bitcoins are created through a process called mining. Mining what it does is reward the members of the bitcoin network (miners), whose function is to protect, help maintain the network and verify the transactions that take place in it , and for this work they are rewarded with an amount of bitcoin for each operation they complete.
Mining is a process by which the computational power of a computer is used to perform, verify and maintain the network operational and synchronized.
When people who do not know about the subject think about investing in bitcoin they often back out because they say that “it’s very expensive” and they can not afford it.
But one of the characteristics of Bitcoin is that it is divisible, so it is not necessary to acquire a complete unit of the cryptocurrency to invest in it, you can buy fractions.
The bitcoin as a currency consists of 100 million satoshi (minimum unit of bitcoin) per unit, an expression that constitutes its unit of measure, as much as the cents are to the dollar.
- 1 bitcoin = 100,000,000 Satoshi
- 0.1 bitcoin = 10,000,000 Satoshi = 1dBTC (deci bitcoin)
- 0.01 Bitcoin = 1,000,000 Satoshi = 1 cBTC (centi bitcoin)
- 0.001 Bitcoin = 100,000 Satoshi = 1 mBTC (milli bitcoin)
- 0.0001 Bitcoin = 10,000 Satoshi
- 0.00001 Bitcoin = 1,000 Satoshi
- 0.000001 Bitcon = 100 Satoshi = 1 uBTC (micro bitcoin)
- 0.0000001 Bitcoin = 10 Satoshi
- 0.00000001 Bitcoin = 1 Satoshi
Another important fact is that bitcoin is not an unlimited currency, since in no case there will be more than 21 million coins circulating at a given time, a figure that will be reached on May 7, 2140, which adds more value to the project, since by not being able to create bitcoin “out of the blue” as it happens with fiat money, makes this “shortage” of cryptocurrencies more valuable.
Its biggest difference compared to other currencies is that it is a decentralized currency, so it is not controlled by any State, bank, financial institution or big capital as it happens with fiduciary money.
Bitcoin does not have a central issuer as it happens with the currencies of the countries. The cryptocurrency is produced by people and companies around the world dedicating a large amount of resources to the mining of this through their own computers.
Other features of bitcoin (BTC).
In addition to the above, Bitcoin is also characterized by:
- It does not belong to any particular State and can be used all over the world equally.
- You can change bitcoins to any other currency and vice versa.
- No intermediaries: Transactions are made directly from person to person.
- It is impossible to falsify or duplicate thanks to its sophisticated cryptographic system.
- The transactions are irreversible and traceable.
- It is not necessary to reveal your identity when doing business and therefore preserve privacy.
- The money belongs to you 100%; it can not be intervened by anyone or accounts can not be frozen.
Thanks to its complex cryptographic system it is possible to make sure that nobody cheats and that the currency is safe against attacks, attempts of forgery or duplication.
Use of bitcoin
The use of bitcoin is simple, the different applications simplify the process in such a way that sending and receiving bitcoins is as easy as sending and receiving an email.
To send bitcoins, we only need a bitcoin wallet of our own where we have stored the bitcoins and a personal wallet or of another person to send them.
In addition, the Bitcoin protocol is totally open and transparent, anyone can check it and make sure everything is going well. In fact, this has earned the trust of millions of people around the world who use it for their business, make purchases or send money to their families.
More information about bitcoin:
We have a series of tutorials on bitcoin that may be of interest to you, in which we will solve the many doubts that arise when you start in the world of cryptocurrencies.
- How to get free bitcoins?
- Key steps to know how to get bitcoins
- What is bitcoin’s exchange rate and how to find out?
- Where and how to convert bitcoins into real money?
- Where can I pay with bitcoins?
- How to buy and sell bitcoins?
- How do bitcoin transactions work?
- What is a Bitcoin Hard Fork?
- How does Bitcoin mining work?
- Learn about the main bitcoin wallets
- How to open your blockchain account to receive and send bitcoins?
- The value of Bitcoin: Everything you need to know
Bitcoin’s maximums and minimums of each year.
- 2009 – $ 0.0007639
- 2010 – Minimum $ 0.01 – Maximum $ 0.50
- 2011 – Minimum $ 0.289 – Maximum $ 31.90
- 2012 – Minimum $ 3.87 – Maximum $ 15.40
- 2013 – Minimum $ 72.00 – Maximum $ 1,156.14
- 2014 – Minimum $ 304.23 – Maximum $ 1.017.12
- 2015 – Minimum $ 171.51 – Maximum $ 469.10
- 2016 – Minimum $ 354.91 – Maximum $ 979.40
- 2017 – Minimum $ 755.56 – Maximum $ 20,089.00
- 2018 – Minimum $ 3191.30 – Maximum $ 17,712,40
- 2019 – Coming soon
Highlighted Events timeline:
Since its inception, bitcoin has been the protagonist of multiple news, these are a list of the most important.
- 2008 – Bitcoin Whitepaper publication.
- 2009 – The Bitcoin network is put into operation and satoshi registers the first block known as Genesis.
- 2010 – First purchase, Laszlo Haynecz one of the developers of the bitcoin project, bought a pizza with 10,000 bitcoins.
- 2011 – Altcoin are born, new cryptocurrencies begin to appear
- 2012 – The Bitcoin Foundation is created
- 2013 – Robocoin and Bitcoiniacs launch the first bitcoin ATM
- 2014 – Bankruptcy of Mt-Gox after suffering a theft of 744,000 bitcoins
- 2015 – The United States declares bitcoin as merchandise and the European Union dictates it free of taxes.
- 2016 – Craig Wright says he is Satoshi Nakamoto
- 2017 – First Bitcoin Hard Fork – Bitcoin Cash
- 2018 – The Bitcoin [BTC] ETF is delayed
As an anecdote we can also see how bitcoin has appeared or been named in different television series or movies, such as:
- The Simpsons
- Family Guy
- The paper house
- The Big Bang Theory
- House of cards, among others.
Bitcoin.org is a platform managed by the creators of Bitcoin core and by other members of the community, whose mission is to help and inform the community, give visibility to the Bitcoin ecosystem, show events … as they say from the web.
“Bitcoin.org is not an official website, just as no one owns the technology of email, no one owns the Bitcoin network, therefore, nobody can pretend to speak in the name of Bitcoin.”
The Bitcoin Foundation, is a non-profit organization founded in 2012, with the mission of helping the project carried out by Satoshi Nakamoto reach its destination. For this purpose they protect and promote the use of this technology, in order to obtain a global benefit.