What Is Bitcoin?
Bitcoin is an electronic payment system based on cryptographic proof enabling any two willing parties to transact directly with each other without the need for a trusted third party. It uses a cryptocurrency called bitcoin to transfer value over the internet or act as a store of value like gold and silver. Bitcoin was the first successful cryptocurrency created by the anonymous creator Satoshi Nakamoto to allow "online payments to be sent directly from one party to another without going through a financial institution."
Bitcoin is a peer-to-peer online currency, meaning all BTC transactions happen directly between equal, independent network participants without any intermediary permitting or facilitating them.
As a form of digital money that exists independently of any government, state, or financial institution, Bitcoin can be transferred globally without needing a centralized intermediary.
BTC Token
Bitcoin (BTC) is the Bitcoin ecosystem's native cryptocurrency. Each bitcoin comprises 100 million satoshis (the smallest units of bitcoin), making individual bitcoin divisible into smaller units, with each satoshi being worth 0.00000001 bitcoin. This means anyone can purchase a fraction of a bitcoin with as little as one U.S. dollar.
Bitcoin (BTC) is a digital currency that uses peer-to-peer technology to operate with no central authority or banks; BTC transactions are carried out collectively by the network.
Bitcoin has a fixed max. supply of 21,000,000 BTC coins, i.e., there will only ever be 21 million bitcoins. It means, unlike fiat currency, new bitcoin cannot be created by any official.
The highest price paid for Bitcoin since it was launched was $ 68,789.63.
How Much Bitcoin
Bitcoin is considered a "store of value," and new bitcoins are created through a process known as mining (up to a maximum of 21 million coins). Bitcoin mining is the process by which thousands of computers worldwide compete to record and verify transactions on the network.
Bitcoin has not been pre-mined, meaning no coins have been mined and/or distributed between the founders before it became available to the public. However, during the first few years of BTC’s existence, the competition between miners was relatively low, allowing the earliest network participants to accumulate significant amounts of coins via regular mining: Satoshi Nakamoto alone is believed to own over a million bitcoins.
How to Earn Bitcoin?
You can earn bitcoin tokens through mining. Bitcoin mining involves verifying new transactions and adding validated Bitcoin transactions to the Bitcoin blockchain using a global network of computers running Bitcoin's code.
At Bitcoin’s launch, the reward was 50 bitcoins per block: this number gets halved with every 210,000 new blocks mined — which takes the network roughly four years. As of 2023, the block reward has been halved three times and comprises 6.25 bitcoins.
Additionally, you can earn bitcoins through trading, where you can use your existing crypto assets to long or short Bitcoin, thus betting on its price increase or decrease.
How Much Will Bitcoin Be Worth In the Future?
Bitcoin is currently worth USD 21,721.76. BTC price in the future depends on its perceived value. Such innovations as the Lightning network have provided huge improvements for BTC.
The Bitcoin price prediction for 2023 - 2030 ranges between $109,442.30 and $206,724.34 by 2030.
Market analysts believe BTC could reach $85,121.79 by 2025. The Bearish Bitcoin market price prediction for 2023 is $19,456.41.
Bitcoin traders and investors use the Bitcoin rainbow chart to visualize the price performance of Bitcoin over time. It uses a color-coded spectrum to represent different price ranges and provides an at-a-glance indication of where Bitcoin's price is currently situated relative to historical trends.
What is Bitcoin's Highest Price?
Bitcoin (BTC) price history shows that the largest cryptocurrency by market cap reached an all-time high in 2021, as values exceeded over 65,000 USD in November 2021.
How Does BTC Work?
Bitcoin and other cryptocurrencies are digital assets transacted directly between the sender and the receiver without banking intermediaries facilitating the transaction. Bitcoin transactions are made through the transparent, immutable, distributed ledger technology called blockchain. The protocol uses Bitcoin digital signatures to verify the authenticity of a transaction.
Bitcoin is secured with a Proof-of-Work (PoW) consensus mechanism, which means millions of miners work together to secure the decentralized network. The process of crypto mining is done by solving complex cryptographic hash puzzles and results in the production of new bitcoins.
Solving these puzzles requires powerful computing power and expensive equipment known as application-specific integrated circuit (ASIC) chips to unlock the next block in the chain. In return for spending their computational resources, miners are rewarded with bitcoin for every block they successfully add to the blockchain.
A fee is attached to each transaction to incentivize the distributed network of people verifying Bitcoin transactions (miners). Fees work on a first-price auction system; the higher the fee attached to the transaction, the more likely a miner will process that transaction first.
Each miner keeps a record of all transactions, so forcing a transaction is impossible because they would have to control 51% of all miners.
The Proof-of-Work also solves the problem of determining representation in majority decision-making. If the majority were based on one-IP-address-one-vote, it could be subverted by anyone able to allocate many IPs. Proof-of-work is essentially one-CPU-one-vote.
The majority decision is represented by the longest chain, with the greatest Proof-of-Work effort invested. If a majority of CPU power is controlled by honest nodes, the honest chain will grow the fastest and outpace any competing chains.
Bitcoin's Energy Consumption
The process of creating new blocks to ensure the Bitcoin network's security comes at a price. In the past years, many people have become concerned about the energy consumption of Bitcoin and its effects on climate change. As such, a report states that each Bitcoin transaction takes 1,173 KW hours of electricity, which can "power the typical American home for six weeks."
Moreover, in May 2021, Tesla CEO Elon Musk announced that Tesla would no longer accept BTC as payment due to his concern regarding its environmental footprint.
On the other hand, BTC advocates have taken the opposite position, stating that Bitcoin is a complete financial system whose energy consumption can be measured and tracked, unlike the fiat system, which cannot be accurately measured and requires a range of additional layers to function, including ATMs, card machines, bank branches, security vehicles, storage facilities, and huge data centers. Plus, they argue that miners heavily rely on renewable energy sources, with estimates suggesting that Bitcoin's use of renewable energy may span anywhere from 40-75%.
Finally, some private sector crypto initiatives, such as the Crypto Climate Accord and Bitcoin Mining Council, are dedicated to solving environmental issues. In fact, the Crypto Climate Accord proposes a plan to eliminate all greenhouse gas emissions by 2040.
Bitcoin Founders
Bitcoin’s original inventor is known under the pseudonym Satoshi Nakamoto. To this very day, the inventor's real identity is yet to be revealed. The history of Bitcoin revolves around Satoshi Nakamoto.
On October 31, 2008, Nakamoto published Bitcoin’s whitepaper, which described in detail how the peer-to-peer, online currency could be implemented. It proposed the use of a decentralized ledger of transactions packaged in batches (called “blocks”) and secured by cryptographic algorithms — the whole system would later be dubbed “blockchain.”
Two months later, on January 3, 2009, Nakamoto mined the first block on the Bitcoin network, known as the genesis block, thus launching the world’s first cryptocurrency.
Nakamoto released the first open-source Bitcoin software client on January 9th, 2009, and anyone who installed the client could begin using Bitcoin.
Bitcoin price was $0 at launch, and most bitcoins were obtained via mining, which only required moderately powerful devices (e.g., PCs) and mining software.
However, while Nakamoto was the original inventor and first implementation of Bitcoin, they later handed the network alert key and the code repository control to Gavin Andresen, who became the lead developer at the Bitcoin Foundation. The Bitcoin Foundation, an American nonprofit founded in 2012, was to support the development and adoption of the Bitcoin protocol. After three years, however, the foundation eventually ran out of cash and was dissolved.
Over the years, many people have contributed to improving the cryptocurrency’s software by patching vulnerabilities and adding new features. Bitcoin’s source code repository on GitHub lists more than 750 contributors, with some of the key ones being Wladimir J. van der Laan, Marco Falke, Pieter Wuille, Gavin Andresen, Jonas Schnelli, and others.
How Was Bitcoin Technology Upgraded?
Bitcoin technology was upgraded using a hard fork. A hard fork in blockchain technology is a radical change to a network’s protocol that makes previously invalid blocks and transactions valid, or vice-versa. A hard fork requires all nodes or users to upgrade to the latest version of the protocol's software.
Forks may be initiated by developers or crypto community members dissatisfied with functionalities offered by existing blockchain implementations. They may also emerge as a way to crowdsource funding for new technology projects or cryptocurrency offerings.
Bitcoin had been hard forked to produce Bitcoin Cash, which was hard forked to create Bitcoin SV.
Where Can You Buy Bitcoin?
Bitcoin is, in many regards, almost synonymous with cryptocurrency, which means you can buy Bitcoin on virtually every crypto exchange — both for fiat money and other cryptocurrencies. Some of the major crypto markets for BTC trading and information on how to buy bitcoin are:
- Binance (the world's largest crypto exchange)
- Coinbase
- OKX
- Kraken
- Huobi Global
- Bitfinex
You can also sell Bitcoin on practically any crypto platform.
Check our step by step guide on how to buy bitcoin.
PREMIUM
