Listen to this Article in Audio format
Bitcoin is a decentralized peer-to-peer electronic exchange; in other words, it means people can send money to each other without a bank or third party. In 2008 the Great Recession increased financial turmoil and the lack of trust in banks, where the bailouts additionally increased their role in the propped-up economic system. It may have been this factor that initiated the creation of Bitcoin. An individual or group of people going by the name Satoshi Nakamoto issued a white paper to address the centralized control of money and the trust required in handling citizens’ cash; this individual or group’s identity is unknown to date.
On Jan. 3, 2009, the blockchain launched when the first block, the genesis block, was mined. The first test transaction took place about one week later. Bitcoin’s maximum supply is 21 million — and that’s all there will be. Bitcoin is also much more transferable and more easily stored compared to a resource like gold. If you want to move gold, it’ll cost a lot of money (armored transport, security, storage in a secure facility, etc.). Any individual can essentially store Bitcoin on a USB stick or in something known as a cold or hard wallet.
Once Bitcoin became available on exchanges in 2010, it became easier to buy, sell, trade and store. Thanks to these exchanges, Bitcoin has a reliable price against the U.S. dollar. It even has been officially adopted as legal tender in El Salvador alongside the dollar and the Central African Republic alongside the CFA Franc. The only way you can acquire bitcoin is to buy or mine it from a mining computer.
After Bitcoin became immensely popular in 2011, miners and coders built other networks, like Ethereum and Litecoin. They began to improve the code behind Bitcoin’s blockchain, adapting it for different uses. The price of Bitcoin changes continuously; the lowest recorded at $0.9 in 2010.
This is a guest post by Muhammad Giza. You can follow him on Twitter @gixamuhammad. Opinions expressed are entirely their own and do not necessarily reflect those of Satoshi’s Journal or Satoshi’s Entertainment Company.