The Bitcoin Network and Bitcoin (BTC)

Bitcoin is the first permissionless peer-to-peer payment settlement network based on distributed consensus. Transactions on the network are cryptographically verified and recorded by network nodes. In a public distributed ledger called a blockchain. The Bitcoin network was invented in 2008 by an anonymous person named "Satoshi Nakamoto", but Satoshi Nakamoto's true identity is still unknown.

What is blockchain? What qualities does it have? Please refer to the entry "What is Blockchain".

In the white paper of the Bitcoin network, Satoshi Nakamoto described it as a "peer-to-peer electronic cash system". The so-called peer-to-peer means that transactions occur directly on equal and independent network participants. There is no need for any centralized institution (such as a bank) to allow or facilitate them.

The native asset of the Bitcoin network is Bitcoin (BTC). The process of validating transactions on the Bitcoin network is called mining, and Bitcoins serve as a reward to incentivize transaction validators (miners) to verify transactions and maintain the security of the Bitcoin network.

What is mining? What does mining mean for Bitcoin? Please refer to the entry "What is Mining".

What is the difference between Bitcoin and fiat currency?

Bitcoin was originally designed as a substitute for legal tender, and Satoshi Nakamoto hoped that Bitcoin could be recognized and used by people around the world. The biggest difference compared with traditional currencies issued by central banks is that Bitcoin is not controlled by central banks. Its financial system is controlled by tens of thousands of computers distributed around the world. Therefore, Bitcoin is decentralized and anyone can participate in the Bitcoin ecosystem by downloading open source software.

In addition, another difference compared with traditional currencies is that the maximum supply of Bitcoin is designed to be fixed at 21,000,000, which means that new Bitcoins cannot be created at will, while traditional currencies generally do not. There is a supply cap.

Is Bitcoin a currency or a commodity?

By definition, Bitcoin is a cryptocurrency.

As a currency, Bitcoin has the basic attributes of currency, namely means of circulation, means of storage, etc. People may hold and use Bitcoin for a variety of reasons: like traditional currency, some people use Bitcoin as a means of trading for other cryptocurrencies; others buy and hold Bitcoin as an investment instrument in the hope that its value will increase to obtain additional income.

In fact, because the price of Bitcoin fluctuates so violently, it carries high risks. At present, some countries regard Bitcoin more as a speculative commodity rather than a currency. In addition, because Bitcoin is unregulated and has spawned a lot of criminal activities, the purchase and transaction of Bitcoin or other cryptocurrencies is strictly prohibited in some countries and regions (such as China, Egypt, and Morocco); however, there are also countries that are optimistic about Bitcoin. For example, El Salvador has adopted Bitcoin as its legal currency along with the US dollar, believing that Bitcoin can better conduct banking business and improve the economy.

The development history of Bitcoin

On January 3, 2009, Satoshi Nakamoto mined the Bitcoin network The first block of Bitcoin is called the genesis block, where Bitcoins were mined and rewarded to miners. In the following years, Gavin Andresen, Martti Malmi and Saïvann Carignan successively joined the team to participate in the development and maintenance of bitcoin.org. However, Satoshi Nakamoto announced his withdrawal from the development of Bitcoin in 2010 and disappeared from the network.

The first well-known and interesting Bitcoin commercial transaction occurred on May 22, 2010, when programmer Laszlo Hanyecz exchanged 10,000 Bitcoins for two pizzas. The 22nd becomes Bitcoin Pizza Day for cryptocurrency enthusiasts. Bitcoin was launched with a price of less than $0.10, and by early 2011, the price of Bitcoin had risen to $1.

In March 2013, due to a bug in Bitcoin software version 0.8, the Bitcoin blockchain temporarily forked into two independent chains with different rules, which ran simultaneously for 6 hours. It was later restored after miners downgraded the Bitcoin software to version 0.7. The incident sent the price of Bitcoin on Mt. Got down 23% to $37.

What is a fork? What impact will it have on blockchain networks? Please refer to the entry "What is a fork".

In 2016, the Bitfinex cryptocurrency trading platform was hacked, resulting in the theft of approximately 120,000 Bitcoins worth approximately US$72 million, which became the second most serious breach in Bitcoin history. event. In the following years, the price of Bitcoin also continued to be negatively affected by several hacks on cryptocurrency exchanges.

At the end of 2017, the price of Bitcoin soared, peaking at nearly $20,000; as the 2021 bull market begins, its value once exceeded $60,000. Then, affected by the bear market and events such as Terra and FTX, its price fell back to around $17,000 at the end of 2022.

You can view the latest price of Bitcoin and other related information on the Bitcoin page of the TokenInsight official website.

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