What is Bitcoin? Everything about the #1 cryptocurrency

Bitcoin is the world’s most famous cryptocurrency. It was introduced in 2008 in a whitepaper by an unknown author with the pseudonym Satoshi Nakamoto.

The special thing about Bitcoin is that this currency is controlled and managed in a decentralized way. This is in contrast to classic fiat currencies such as the euro or the US dollar, whose monetary policy is controlled by a central bank. Bitcoin’s success also lies in its clear aversion to central banks, which had come under heavy criticism as a result of the financial crisis of 2007-2008. Bitcoin has a maximum spending limit of 21 million BTC, which is intended to prevent monetary depreciation (inflation). With Bitcoin, this is decided decentrally via many thousands of nodes in the Bitcoin network.

With Bitcoin, it is possible to send money to recipients all over the world within seconds without revealing one’s own name. In addition, Bitcoin is accepted as a means of payment at some stores and merchants. However, most users use it for investment or investment.

Basics & Security
Of course, you can buy and send Bitcoin without knowing all the details of the Bitcoin blockchain. It is important to know the concept of bitcoin wallet. Bitcoins are stored in a wallet and can be sent to the wallet addresses of strangers, acquaintances or even strangers. If you install a wallet as an app on your smartphone, you generate a wallet address. This is similar to an account number, and anyone who wants to send money must know the wallet address of the recipient. Each wallet also includes a private key that must be kept secret. Many wallet providers manage this key for a user, so you do not have to worry about it.
Transactions via Wallets
Bitcoins are stored in digital wallets; transactions take place between two wallets. A wallet always consists of a matching key pair, which includes a public and a private key. The public key is also the address of the Bitcoin wallet; it is needed so that friends and acquaintances can send you Bitcoin. The private key is used to sign a transaction, but is never revealed to other parties in the process. Signing proves that you are the owner of the wallet from which Bitcoin are sent. A signed transaction is confirmed and validated in the course of mining within just under 10 minutes. As the owner of a wallet, you must always keep your private key secret. If a hacker knows both keys, he could loot a Bitcoin wallet. It is important that a public key cannot be used to infer the corresponding private key.
Transactions
Actually, the Bitcoin blockchain is a digital and distributed account book in which all transactions are noted with sender and recipient. However, the sender and recipient are not known by name, but by their wallet address. The current account balance of each wallet is noted in the account book. Then a user can only transfer or send those BTC that actually belong to him. All miners active in the network have the same current version of the account book stored on their computers, there is agreement on the current state of the account book. Through the process of mining, all processed transactions are ranked and stored in blocks encrypted by cryptography in the blockchain.
Processing (Bitcoin Mining)
In the decentralized Bitcoin network, participants known as nodes must decide whether a transaction is valid or not through a collective vote. The rules by which this is determined are called the consensus mechanism. This distributed process is called mining, in reference to gold mining. In this process, transactions are ordered in a chronological sequence and finally stored together in a block. This block complies with cryptographic rules, and the block is encrypted using a mathematical hash function. Each block contains a reference to all preceding blocks. This creates a chain of blocks (=blockchain), previous blocks cannot be processed. In mining, each active miner proposes a solution to the mathematical process of encryption, a miner is chosen at random. This process, known as proof-of-work, is energy-intensive but represents independence and freedom from censorship or tampering. Selected users are compensated for their computing power with BTC as a mining reward.

Value of Bitcoin in 2009
Since the first Bitcoins were issued in 2009, the Bitcoin price has experienced enormous price increases, but also periods of strong price fluctuations. At the end of 2009, one Bitcoin was worth about 0.08 euros.

Value of Bitcoin 2010 until today

YearDevelopmentYear-end course
2010In 2010, Bitcoin then became known mainly among IT-savvy people and programmers. This increased demand and the Bitcoin price, which rose to €0.25 by the end of the year, which is still a 300% increase in price.0,25€

2011With a further price increase, the €1 mark for 1 BTC was exceeded for the first time in April 2011. By June 2011, Bitcoin had even risen to €22.59, but by the end of the year it had fallen back into single digits. Some critics were already predicting the “death of Bitcoin”, but were soon proven wrong.22,59€

2012In 2012, the bitcoin price hovered below the 10 euro mark for most of the time, and only in the last months of the year did the price start to rise slightly; at the end of the year, 1 BTC was worth 13.05 euros.13,05€

2013In 2013, things started to look up again; increasingly accepted as a means of payment, BTC rose above the 100 euro mark for the first time in April. With a real price explosion, BTC was able to skyrocket to just under 900 euros. Many analysts see the first Bitcoin halving of the mining reward from 50 to 25 BTC as a co-trigger of the price increase.544,73€

2014However, 2014 saw the opposite development, with the Bitcoin price gradually falling, initially to just under €650 by the end of June, and by the end of the year 1 BTC was even worth only €260.50. Analysts are divided as to whether it was a consolidation following the previous year’s rally or a hesitant adaptation of Bitcoin as a means of payment that dragged the price down so deeply.260,50€

2015In 2015, the share price continued to fall, reaching a meager 250 euros in the first half of the year. This was followed by months of unspectacular sideways movement before the share price began a new upswing in December, reaching 393.46 euros at the end of the year.393,46€

2016In 2016, Bitcoin became more and more known, even the first mainstream media and magazines reported about the interesting cryptocurrency for the first time. This was associated with an increased demand for Bitcoin, the price rose to about 650 euros by the end of June. After a short slump, it continued to climb towards the end of the year, reaching a price of 912.26 euros.912,26€

20172017 was a sensational bull year that catapulted Bitcoin into new spheres. In February, the 1,000 euro mark was broken for the first time, and in May, the 2,000 euro mark. Many new buyers began to invest in Bitcoin. Just four months later, 4,000 euros had been reached, in October the 10,000-euro mark was broken through, and at the beginning of December the 20,000-euro mark was even surpassed. Then, however, a momentous bear phase set in, and many investors decided to take profits.11630,78€

2018The year 2018 was characterized by constant price decline, in February Bitcoin fell below 10,000 euros, a protracted downward trend let the year end at a weak 3252.63 euros.3252,63€

2019More rosy should be the year 2019, Bitcoin could find new strength. After the rumors about an end of cryptocurrencies were dispelled, BTC could climb above 13,000 euros in June. However, a decline followed by frequent price fluctuations between 9,000 to 12,000 euros. By the end of the year, Bitcoin had reached 6411.12 euros.6411,12€

20202020 has also already shown enormous volatility; from a high of 10,100 euros in February, it went down slowly at first and then abruptly to just under 5,000 euros in mid-March with the onset of the Corona crisis. Since then, Bitcoin has gradually fought its way back to the 10,000 euro mark.9.157,68€

Advantages and disadvantages of Bitcoin


Advantages


Less risk for businesses: Bitcoin transactions are not reversible, such as PayPal or credit cards. Also, no personal information is required for Bitcoin transactions, which is beneficial for customers.

Independence: with Bitcoin, you are your own bank and have complete control over your own money. You don’t have to rely on instances that could freeze your money. No limits, no holidays, no time or location limits. Also, it is not possible to have a la

(Relatively) Low fees and fast transactions: A bitcoin transaction basically takes only 10 minutes, and with low fees. Provided that the Bitcoin network is not busy.


Disadvantages


Volatility: anyone who follows the price of Bitcoin and other digital currencies knows that cryptocurrencies are extremely volatile. Certain events and activities can greatly affect the price.

Novelty: Bitcoin and the technology is still novel and complex. Bugs can creep in with new systems, there is always that risk.

Trust and acceptance: People need to trust Bitcoin for the digital currency to establish itself as a means of payment.

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