Bitcoin: Past, Present, and Future

Recently, Bitcoin became a hot topic in many forms of media, both mainstream and alternative. It became the headline of many news outlets (well, both good and bad) gaining more popularity. Bitcoin has even made it onto the popular TV show, “The Big Bang Theory”. Remember the Bitcoin Entanglement episode?

While bitcoin is a popular cryptocurrency, there are still many people who are unaware or confused by its notion. This is the main reason why we created this blog post.  

Let’s first define what Bitcoin is. To start, Bitcoin is the world’s first cryptocurrency. It is considered as an innovative payment network that can be used by anyone to buy or sell goods and services. People can use bitcoin to buy foods, pay bills or play at a bitcoin casino.

The most important characteristic of bitcoin is the decentralized system. There is no middle man or central authority and the sellers are in charge. The system can continue to operate as long as there are members in its peer-to-peer network. With the decentralized network also, there will be no interest fees. 

To keep the system organized, a new type of database called blockchain was created to keep track of the history of all the bitcoin transactions. All users can download, inspect, and review transactions keeping it transparent to everyone.

 The origin of Bitcoin

How Bitcoin started is clouded with mystery. As mentioned above, bitcoin is the first cryptocurrency. It was registered in the year 2008 in a domain name “bitcoin.org”. In 2009, the bitcoin software was launched as an open-source code. On January 3, 2009, the bitcoin was created when the creator mined the first block of the chain, known today as the genesis block.

One of the interesting facts about the advent of Bitcoin is that its creator remains unknown until today. In October 2008, two months after the domain bitcoin.org was registered, a whitepaper entitled ‘Bitcoin: A Peer-to-Peer Electronic Cash System’ was published on the site. It was Satoshi Nakamoto, who wrote the Bitcoin paper. The identity of Satoshi Nakamoto is still unknown today. Some even say it is a pseudonym for a group of people.

The bitcoin software was first launched way back in 2009, but do you know that the bitcoin origin can be traced back a few decades before that? In 1982, computer scientist David Chaum proposed the concept of e-Cash and published a paper entitled “Blind signatures for untraceable payments”.

In the year 1990, he founded DigiCash, a company that aimed to create a safe and secure online currency. Unfortunately, the company went bankrupt and did not succeed. In the following years, different people attempted to create cryptocurrencies like Wei Dai with his “b-money” and Nick Szabo with his “Bit Gold”. But like David Chaum, the two didn’t succeed.

The present day

In just a short time after the first block was mined, well-known businesses started to accepted the currency; giant businesses including Dell, Expedia, PayPal, Microsoft and many more. In addition to this, Opera, a Norway-based internet browser company has launched Opera Touch which has a built-in cryptocurrency wallet and Web 3 Support. And just recently, tech giant company Samsung released a new line called “KlaytnPhone” which is compatible with other crypto and blockchain technology.

After bitcoin gained so much popularity, many were inspired to create other cryptocurrencies built on a decentralized peer-to-peer network.  Other cryptocurrencies like Litecoin, Ethereum, Zcash, Dash, Ripple, Monero follow the footsteps of Bitcoin.

One of the milestones of Bitcoin happened in February 2011. This was the first time when 1 Bitcoin worth $1. In the succeeding years, bitcoin prices increased consistently but it was 2017 which was the biggest year for bitcoin users.  Bitcoin hit a peak of $19,783 by the end of December.

After bitcoin gained so much popularity, many were inspired to create other cryptocurrencies built on a decentralized peer-to-peer network.  Other cryptocurrencies like Litecoin, Ethereum, Zcash, Dash, Ripple, Monero follow the footsteps of Bitcoin.

Following the consistent price increase, Bitcoin users experienced a rough year in 2018. Bitcoin’s price steadily dropped all year. The price dropped more than 80 percent of its value and recorded $3,689.556 price on December 18, 2018.

Bitcoin showed positive performance in the opening of 2019.  Starting from February, the Bitcoin price showed a five-month winning streak. In June 2019, Bitcoin reaches $10 908. However, the Bitcoin price dropped again to $8.085.71 at the end of September 2019.

  The Future

Many people want to know what will happen to Bitcoin in the future? Predicting the future of Bitcoin isn’t an easy task.  For instance, the price of a cryptocurrency is very volatile. The value of the coin can go up or down really fast without any sign or explanation as to why. To give you an example, Bitcoin increased its price by more than 2000% in 2017 but in 2018 it dropped more than 80 percent of its value. Its value is dependent on what investors are willing to pay for it at a point in time.

Many experts have tried to predict the future of bitcoin. John McAfee, the creator of the popular anti-virus software McAfee predicted in 2017 that bitcoin would reach $500,000 in 2020. McAfee claims that his prediction is based on his price prediction model. Another expert, who made a price prediction was Tom Lee. Lee works for the cryptocurrency research organization Fundstrat. According to his forecast, Bitcoin will be valued at $91,000 in 2020.

One of the important and unique characteristics of Bitcoin is that it is not controlled or regulated by a middle man. However, regulating bitcoin is undeniably important to gain the trust of more people. Fortunately, this is exactly what is happening today. In 2017, Japan became the first nation in the world to completely regulate Bitcoin. 

Nowadays, Japan has the highest trading volume in the world. The country also has 200,000 stores that accept bitcoin as a currency. Many countries around the world, especially in Europe, followed the strategy of Japan. If this continues, more and more companies and people will accept Bitcoin. If bitcoin usage were to consistently increase, we would likely see more a higher bitcoin price in the future.

While many experts have forecasted a price hike of Bitcoin in the future, Jason Calacanis, a well-known venture capitalist warned that bitcoin price could fall as low as zero. He added that it will be likely replaced by new technology.

The future of bitcoin is still a debate. The most important question that needs to be answered is, how long will bitcoin last? Right now 25 Bitcoins are created every 10 minutes and will be capped at 21 million. At this level a level, bitcoin is expected to reach 2140. If you are considering investing in bitcoin, experts’ advice is to recognize the risk.