Bitcoin is a digital currency that has revolutionized the way people think about money. Bitcoin is what some refer to as an "Internet of Money." This means it's what we use for quick, secure and reliable transactions between any two people in the world with access to an Internet connection. It also makes it possible for us to send value without needing a bank or other financial institution acting as middlemen.
*[Pexels](https://www.pexels.com/photo/person-holding-silver-bitcoin-coin-1447418/)*
There're not many blogs that's are talking about the history of Bitcoin and cryptocurrencies. So, I thought, why not write an article that will help newbies learn about the past!
Brief History of Bitcoin
Bitcoin was created in 2009 by an unknown person or group of people using the name "Satoshi Nakamoto." The goal of the cryptocurrency Bitcoin and other cryptocurrencies like Ethereum and Litecoin is to create a new form of money that doesn't rely on governments.
In this way, they are trying to combat what happened in 2008 when banks were bailed out with taxpayer's money while the average Joe was left without jobs or homes.
Bitcoin is based on blockchain technology which means transactions are recorded publicly for everyone to see. This is what gives Bitcoin and cryptocurrencies their security, as well as what prevents counterfeiting by anyone who might want to try it out.
Bitcoin is the first cryptocurrency. Since its release, there have been over 1500 other cryptocurrencies introduced. The prices of these currencies can often change, which is what makes them so appealing to investors.
*[Source](https://blog.liquid.com/who-is-satoshi-nakamoto)*
One of the first people to mine Bitcoin was Satoshi Nakamoto - no one knows who he or she is. They might be a group, though, because when they mined their coins back in 2009, there were only a few other miners working on the project.
Learn about Blockchain - What is Blockchain? Simplest Explanation of Blockchain Technology Ever
The idea for bitcoin was first introduced back in 2008. Satoshi Nakamoto published a paper outlining what the idea was and how it would work. This is what most people refer to as "Bitcoin's whitepaper."
The currency has been on an upswing for quite some time, but there have also been plenty of dips and crashes along the way too. Some other cryptocurrencies that are worth checking out: Etherium, Ripple, Litecoin, Hive, etc.
What is Bitcoin Mining?
Bitcoin mining is what people in the cryptocurrency community do to generate new coins. Your goal as a miner is to solve difficult math problems with your computer, which serves two purposes:
First, you're helping validate transactions and enrich yourself by earning Bitcoin;
Second, when you find the answer to these mathematical puzzles - what's called a 'block' - you're rewarded with a certain number of new Bitcoin.
So what miners do is form small groups and compete to solve these puzzles first - the winner takes all (I'll explain that more in-depth later). The group then shares what they've earned among themselves according to how much work.
When Bitcoin first launched in 2009, the original reward was 50 bitcoins per block. In July 2012, Bitcoin's mining reward was halved to 25 bitcoins. In 2016, it halved again to 12.5 bitcoins. As of February 2021, miners are rewarded with 6.25 bitcoins for each new block they mine—equal to approximately $294,168.75 based on the latest value at that time.
Bitcoin's Price History
Bitcoin's first price boom occurred in 2010 when the value of a Bitcoin jumped from about $0.008 to $0.08.
The second Bitcoin boom occurred in November 2013 and its value jumped about $180 at the beginning of November.
After this surge, the cryptocurrency's price began to stabilize, but what happened next is what really caused the Bitcoin community a lot of grief. After reaching an all-time high of approx $1160 on December 17th, 2013, the currency quickly lost half its worth by February 18th, 2014, when it dropped back down to around $560.
Bitcoin has had its share of success and failures. At the end of 2017, it was valued at over $17000 per bitcoin but then in early 2018; it plummeted to a low point of around $6000.
If you had invested $1000 US approximately when each coin cost about that much, your investment would be worth about thirty times what it was originally! The graph below reveals this trend:
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In order to buy bitcoins, people either invest by buying them outright or through an exchange like Coinbase, Binance where users link their bank account so they can purchase coins with dollars.
The Aftermath
If you are new to bitcoin or have been watching it without committing anything more than observation, there are plenty of reasons behind what people say about investing in it.
Bitcoin and all other cryptocurrencies are what some people call "the future." We see a lot of great things happening in this industry, but there is also plenty of bad news too. You saw what happened this May 2021, I am talking about the crash of the market. Bitcoin almost lost 50% of its price. As you can imagine, many investors said it was an amazing opportunity to invest because they knew that eventually, Bitcoin would go back up again - just like what we've seen with past crashes and dips throughout its history.
However, even though if the price comes back up (at least for now), not everyone will be able to take advantage of the situation as much as others: those who invested when it was low were able to make a fortune.
Final Verdict
In summary, Bitcoin and cryptocurrency are still relatively new concepts in terms of finance, economics, and technologies, but they will be the next generation of currencies soon. The good news for those who understand what it takes to invest: now's a great time to get started!
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