By Maddox Brown
Salutations fellow readers!
Due to this unforeseen lockdown, the use of cryptocurrency is at an all time high. One of the most popular forms of cryptocurrency is called Bitcoin. In this article, I will be discussing how Bitcoin was created, who created it, it’s rise into conquering the cryptocurrency market, and it’s fall from grace. But before we get started, to get familiar with the topic of cryptocurrency, I will explain what the term ‘cryptocurrency’ means and how it is currently used in society.
What is Cryptocurrency?
Cryptocurrency is a form of digital currency that can only be exchanged online for goods and services; one simple example is transferring value to anyone around the world. An example many of you may know is when your favorite game has their own form of currency(often referred to as ‘tokens’ or ‘bucks’) that you can exchange real life money to get. They can only be used in that particular game though. Anyways, back to the main topic. There are over 5,000 forms of cryptocurrency to choose from on the internet, astounding right?. The fact that there are this many cryptocurrencies flowing throughout the internet just boggles my mind. The main way to obtain cryptocurrency is to exchange real life money for it, but before you hastily do that, you need an official ‘wallet’.
Digital wallets basically act like regular, physical wallets but instead of holding paper money, they hold cryptocurrencies. Most transactions can not be completed without these necessities. This is because they contain and store public as well as private keys that are required for cryptocurrency-related transactions. Some of the top crypto wallets are Coinbase, Exodus, Ledger Nano X and S, Mycelium, and MetaMask. Similarly, some of the most popular forms of cryptocurrency are Ethereum, Litecoin, Ripple, Stellar, and of course, Bitcoin. In fact, when people think of cryptocurrency, most likely, what instantly comes to mind is Bitcoin due to how well-known and mainstream it is. With the progression of technology into our everyday lives, it is without doubt that cryptocurrency is the way of the future and will soon out rank even that of paper money.
What is Bitcoin?
Bitcoin was the first form of cryptocurrency ever to be dispersed throughout the internet. One Bitcoin at the time of writing this article equates to around $39,480. The amount fluctuates based on supply and demand. To further explain, it is dependent on how much Bitcoin is available, the market’s demand for it, the availability of the currency and how their crypto-competitors stand. All in all, it is unpredictable to know what the next price would be unless you can somehow tell the future.
Satoshi Nakamoto, the founder and creator of Bitcoin, is said to have around one million Bitcoin stored in his wallet which is estimated to be around 38.2 billion U.S. Dollars at the time of me writing this, absolutely incredible. This makes him the richest man in terms of Bitcoin.
Here is a fun fact, did you know that the first purchase that ever used Bitcoin was for two Papa John’s Pizzas? On May 22nd, 2010, a purchase was made for two full pizzas for 10,000 Bitcoins which at the time was only $41. Today, the same 10,000 Bitcoins now equate to around $377 million dollars!
The Rise of Bitcoin
As time progressed, more and more people started to realize the possible values and potential uses of cryptocurrency, specifically Bitcoin. In 2009, Satoshi created the first forum for people to talk about anything Bitcoin, called ‘Bitcointalk’. As a result of this implementation, on January 15th, 2010 a Bitcointalk user with the name of ‘dwdollar’ proposed the idea of a site where users can trade and sell Bitcoin with one another as well as exchange dollars for the commodity. It is with this aspiration where the first market for trading and exchanging Bitcoin was instated, BitcoinMarket.com.
In addition to Bitcoin gaining it’s own market for trading, it has also garnered many loyal supporters, one of them being a software developer named Hal Finney. Finney was the first user to receive a transaction from Satoshi himself. He also allegedly lived in the same town as Satoshi which led multiple people to believe that he actually was the face of Bitcoin, which Finney later declined to be the case. He was one of the first people to express actual interest in Bitcoin and before his saddening death on August 28th, 2014, was the only one other than Satoshi himself to actually run Bitcoin.
One of the biggest moments in Bitcoin’s history was when it finally hit $1 on February 9th, 2011. This was a huge milestone for Bitcoin, as it is incredibly difficult to reach $1, especially in the timeframe they’ve reached it in. It was only the beginning for the young cryptocurrency and not long after hitting $1, in January 2014, Bitcoin surpassed the $1000 threshold.
Bitcoin’s Decline
Nothing can stay on the positive forever, and the same terminology goes for Bitcoin as well. Recently, China announced that it is forbidding it’s financial and payment service providers from accepting cryptocurrencies as ways of payment. This caused a severe drop in the value of several cryptocurrencies, which obviously includes Bitcoin. Due to this, on Wednesday, Bitcoin has plummeted by 30% to nearly $30,000, the lowest it had been since January 28th 2021. However, Bitcoin was able to rise from the ashes and reach about $37-38,500. Nonetheless, Bitcoin had lost many of it’s investors and that is a wound that will be hard to heal.
That is not the only cause of its downfall though. Earlier in May, Elon Musk, CEO of Tesla, SpaceX, and Neuralink stated that Tesla will now reject Bitcoin as a form of payment for its cars due to the massive carbon footprint. He believes that Bitcoin mining and transactions leave a severely damaging impact to the environment and will, from now on, not permit the use of Bitcoin as payment for his products in his Tesla.
To further elaborate, nowadays, Bitcoin mining requires the use of super sophisticated and high-powered computers in order to run it’s various difficult computational/math puzzles as well as their frequent tasks, and with the use of these computers, comes the heavy usage of electricity. For example, the mining of one bitcoin block consumes enough electricity to power more than 20 U.S. homes for a full day. The electricity they use is generated from fossil fuels, the most prominent one being coal, the dirtiest one of them all. As somewhat expected, the result of this was a huge decline in the price of Bitcoin, falling about 10% of what it originally was. This will possibly be the start of what I will call, ‘the Fall and End of Bitcoin’.
This was, I guess you could call, the ‘History and Present State of Bitcoin’. I hope you have learned more about this type of cryptocurrency from reading this article, I sure have. Share this with your friends and family and spread the knowledge!