When did bitcoin come out?Do you know the origin and development history of Bitcoin? This article will give you detailed answers.
What Is Bitcoin
Bitcoin, abbreviated as BTC, is an electronic currency generated by open source P2P software and is a network virtual currency. Bitcoin is not issued by a specific currency institution, it is generated by a large amount of calculation of a specific algorithm, and the Bitcoin economy uses a distributed database composed of many nodes in the entire P2P network to confirm and record all transaction behaviors. The decentralized nature of P2P and the algorithm itself can ensure that the value of the currency cannot be artificially manipulated by mass-producing Bitcoin.
Bitcoin (BTC) is a cryptocurrency with a decentralized transmission mode based on cryptography and relying on blockchain technology. Currently the number one market cap in the cryptocurrency market.
Origin of Bitcoin
In 2008, the US financial crisis broke out, triggering a global economic crisis. This storm appeared early in the US subprime housing credit market, and a large number of borrowers could not repay on time, which gradually caused a liquidity crisis. In addition, in order to alleviate the crisis, the US government issued a large number of US dollars to rescue the market, which further exposed the fatal shortcomings of the centralized model: due to the lack of trust between the two parties, a centralized agency is often required to guarantee, but this does not guarantee that both parties will perform the contract, or the central agency must have a positive effect.
On November 1, 2008, Satoshi Nakamoto released the Bitcoin white paper, which elaborated on the operation mechanism of Bitcoin. The paper expounds the theory of electronic money (now Bitcoin) based on cryptography. The paper points out: There are so many currencies in the world, and the currency of each country is just a circulation symbol. Once the country’s credit guarantee is lost, they are a pile of waste paper. Why not invent a currency system that is universal and has no national differences? As a result, the paper details how to use cryptography to create a method of virtual currency. This is the theory of Bitcoin.
Bitcoin uses blockchain technology to establish a decentralized payment system based on encryption technology, which solves the problem of transaction trust. The system records public transactions by using a workload proof mechanism and a peer-to-peer network, and both parties to the transaction can conduct bitcoin transactions normally without the need for a third-party organization.
The Bitcoin monetary system proposed in the paper has some of these properties:
- Decentralization: There is no issuer, and the entire network is composed of users, which are stored and run in P2P mode
- Worldwide circulation: Any computer in the world, as long as you download the Bitcoin client, can make, sell, buy, and receive Bitcoin
- Safe holding: Manipulating Bitcoin requires a private key, which can be isolated and stored in any storage medium. No one can get it except the user himself.
- Low transaction fees: Bitcoin can be remitted for free, but eventually a transaction fee of about 0.001 Bitcoin will be charged for each transaction to ensure faster transaction execution. The transaction fee collected will be used as a reward and sent to users who will subsequently create bitcoins.
- Convenient and fast transaction transfer: as long as you know the account address of the other party, you can transfer money, which is convenient and fast
- Prevent inflation: There are only 21 million bitcoins in the world. From the date of release, 50 bitcoins are generated every 10 minutes, but the output will be halved every 4 years, that is, after 4 years of release, every 10 25 bitcoins are generated every minute, and after 8 years of release, 12.5 bitcoins are generated every 10 minutes. These newly generated bitcoins belong to the people who made bitcoins.
The Official Appearance of Bitcoin
On January 3, 2009, the genesis block of the Bitcoin blockchain was dug by Satoshi Nakamoto, and a block reward of 50 BTC was generated, marking the official launch of Bitcoin.
On January 12, 2009, Hal Finney received 10 BTC from Satoshi Nakamoto, resulting in the first Bitcoin transfer transaction.
How Bitcoin Works
Every bitcoin transaction will be recorded by the nodes in the blockchain network to enhance the credibility of the transaction and protect the interests of both parties. However, if all nodes participate in the recording, it is easy to cause inconsistencies in the ledger information due to factors such as network delays, and it is difficult to prevent the bookkeeper from tampering with the transaction information.
Therefore, Bitcoin adopts the Proof of Work consensus mechanism, allowing all nodes to participate in the competition by solving the problem of Proof of Work, and the nodes that succeed in the competition have the accounting right of the new block and can broadcast the recorded information. After receiving it, other nodes will synchronize data according to this message to ensure that the ledger is consistent. This process of competing for accounting rights is called mining, and the nodes participating in mining are called miners. After successful mining, miners can obtain block rewards, that is, a certain amount of Bitcoin, and can also collect transaction fees on the block. Driven by interests, nodes will actively participate in mining and maintain the authenticity and effectiveness of transaction records.
There is only one way to issue bitcoins, that is, block rewards, which means that bitcoins are generated through mining. However, Bitcoin cannot be generated indefinitely through mining. Its algorithm stipulates that every 210,100 blocks (about four years) are generated, Bitcoin’s blockchain reward will be halved. Since the total number of bitcoins issued is constant at 21 million, it is expected to be mined in 2140. This regulation ensures that Bitcoin will not suffer serious inflation due to artificial issuance, and can protect the value of Bitcoin.
- In 2009, the Bitcoin system was officially released, but since few people knew it, the price of 1 Bitcoin was only a few cents.
- In April 2013, as more and more people recognized and discovered bitcoin, the price of bitcoin soared tens of thousands of times over the past four years, and the price of 1 bitcoin reached a maximum of $266.
- In November 2013, the price of Bitcoin surged to $1,000.
- In 2014, with the regulation of Bitcoin by the central bank, Bitcoin began to decline, but the related applications of Bitcoin continued to grow.
- In 2015, 2016, this is the 2 years of precipitation, Bitcoin is unknown or even forgotten.
- In 2018, Bitcoin did not have much ups and downs, and many blockchain media platforms went bankrupt, and the price always hovered between 20,000 and 25,000.
- On April 1, 2019, the price of Bitcoin suddenly skyrocketed, reaching $5,000 at one point.
- On June 20, 2019, the price of Bitcoin once again exceeded $10,000.
- In 2020, Bitcoin halved for the third time, and the price also rose.
- On February 9, 2020, the price of Bitcoin once again exceeded $10,000.
- On March 12, 2020, Bitcoin suffered Black Thursday, falling from $8,000 to $4,860.
- July 26, 2020, breaking through $10,000
- December 16, 2020, reached an all-time high of $21,500
- January 8, 2021 Another new high, reaching $40,000
- February 16, 2021, breaking through $50,000
- March 13, 2021 A new high, breaking through $60,000
- On February 19, 2021, Bitcoin reached a market cap of $1 trillion for the first time.
- In June 2021, El Salvador became the first country in the world to adopt Bitcoin as legal tender.
- On June 19, 2022, it fell below $18,000, a new low in nearly two years.
- Bitcoin price slightly recovers to $20,000 on June 20, 2022.