Great Reason Bitcoin Was Invented

Published by Abdulmujeeb A. Owolabi on

In some ways, bitcoin was born ten years ago today. Bitcoin’s first lines of code were added to the blockchain on January 3, 2009. it was a few months after the original white paper was released. They are called the “genesis block,” written by the person or people known as Satoshi Nakamoto or Satoshi Nakamoto.

On January 12, Nakamoto sent ten bitcoins to Hal Finney, and a new kind of money was born. At this point, the value of bitcoins was meager. Users gave each other bitcoins as a reward for good comments on forums. The first “real” transaction took place on May 22, 2010. Laszlo Hanyecz paid about $30 for two pizzas that he got for 10,000 bitcoin or about $30 in cash. If 10,000 bitcoin were worth $38 million right now, that would be a lot of money. If the pizza was good, I hope you liked it.

Three groups came together for most of the time bitcoin was around: the original investors and believers, the blockchain technology geeks, and the people who want to make money. Recently, a new group of people has been: old-fashioned, stodgy finance people.

What Is Bitcoin?

Bitcoin is a new currency made in 2009 by an unknown person who used Satoshi Nakamoto. It was made that year. It doesn’t use banks, so there are no middlemen. Bitcoin can be used to book hotel rooms on Expedia, buy furniture on Overstock, and play Xbox games, among other things. But a lot of the talk is about making money by trading it, which is not valid. The price of Bitcoin went up into the tens and hundreds in 2017.

Why Was Bitcoin Created?

People came up with the idea of Bitcoin as a response to the Great Financial Crisis and how much money was spent on banks as intermediaries for all financial transactions, so they came up with Bitcoin in 2008.

There was an idea for a payment system that didn’t need third-party approval. Satoshi Nakamoto came up with the idea. So, banks didn’t have to get into every single deal.

It would use a standard called “proof of work,” which uses mathematical algorithms to verify transactions without relying on a single person or group (banks). It comes in instead of the leading network.

People Are Often Asked, “What Is A Blockchain?”

The blockchain is a type of data structure that stores transaction records and makes sure that every transaction is safe. As a result, everyone can use the blockchain, eliminating the need for centralized friction and adding “proof” that each transaction is confirmed. For and by the people exchanging money, this makes Bitcoin a currency that everyone can use and trust.

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Why Is It Relevant Now?

Since the COVID-19 pandemic, the idea of scarcity of units has taken hold in the financial world. It is partly because of the pandemic. Investors are looking for a haven or “insurance policy” to protect them from possible inflationary pressures. Central banks are weakening their currencies around the world. As inflation rises, investors keep their money in places other than central banks, so their funds would not be affected. it is called “insurance.”

In the past, gold and other precious metals provided that insurance, and it has worked well for about 5,000 years. It wasn’t until 2008 that Bitcoin became a part of the history books. Investors are now looking at Bitcoin as a possible partner to precious metals as insurance against inflation. People are trying to change the name of Bitcoin so that it’s known as “digital gold,” but that’s not all.

Arguments for Bitcoin doing this job are that it has a limited size, which means it can’t go above the mathematical algorithms that make up the blockchain, which means there won’t be any inflation. It is also elementary to move around. “Virtual wallet”: Any phone or device can use as a virtual wallet. It’s more modern and convenient than a raw bar of gold. Many people don’t like this campaign because it doesn’t have the history of gold or the value of gold itself. Some people say it doesn’t have value because it isn’t tied to anything.

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Where Is Bitcoin Headed?

As we speak, this tug of war is taking place in the market. It went up more than 250 percent in 2020 alone, which is a lot. It started as a tool for people to use at home, but now it’s being used by big businesses. Many well-known portfolio managers and people in the financial world either praise Bitcoin’s features or take positions in it. Michael Saylor, the CEO of Microstrategy, has changed all of his cash to Bitcoin. In addition, Square bought $50 million worth of Bitcoin, and PayPal has also let people use Bitcoin to pay for things.

Regardless, the need for a store of value is being rethought around the world all the time. There has never been a way to make money like Bitcoin before when it comes down to it. The question is: will Bitcoin replace or complement precious metals, or is it just a fad that will soon fade away after having its moment in the sun?

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