Bitcoin-the digital currency that will disrupt the future financial world

In the 21st century, humans are facing a full-blown digital revolution! The emergence of Bitcoin has sent shockwaves through the world. Bitcoin has the potential to disrupt the traditional financial and banking industries.

Being the first digital currency, Bitcoin represents the future. It will create huge wealth and has massive investment value. It is worth learning about this new digital asset that will be traded on Qidax, the innovative trading platform based in Australia.

As a rising global currency, Bitcoin has become a major threat to traditional financial institutions and even central governments. Decentralized digital currency solves the fundamental problem of central banks’ control over currency issuance caused by the oversupply of currencies, which in turn triggers inflation and plunders the wealth of people and businesses.

The Problem of Conventional Currency

The Bitcoin Solution

The solution is a combination of digital signatures and a peer to peer (P2P) distributed system with no single point of failure. Users hold the crypto keys to their own money and transact directly with each other using a digital signature, with the help of the P2P network to check for double-spending. Satoshi called this e-currency Bitcoin.

Bitcoin is a decentralized digital currency without a central bank or single administrator. It can be sent from user to user on the peer-to-peer bitcoin network without the need for intermediaries. Transactions are verified by network nodes through cryptography and recorded in a public distributed ledger called the blockchain.

A Brief History of Bitcoin

Bitcoin was invented by Satoshi Nakamoto on 31 October 2008. That year, they posted a paper called Bitcoin — A Peer to Peer Electronic Cash System to a mailing list discussion on cryptography. Satoshi Nakamoto’s real identity remains a mystery to this day.

On 3 January 2009, the bitcoin network came into existence with Satoshi Nakamoto mining the genesis block of bitcoin (block number 0), which had a reward of 50 bitcoins generated at 18:15:05 (GMT). These 50 BTC were sent to the Genesis Block Address:

1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa (https://www.blockchain.com/btc/block/0)

The number of bitcoins owned by Satoshi Nakamoto is 1,148,800. The bulk of the first 36,000 blocks was mined by one computer which belongs to Satoshi. 63% of this was never spent, leaving Satoshi with a fortune of over 1.1 million BTC, equivalent to USD$11 billion today.

On Jan. 12, Hal Finney was the recipient of the first Bitcoin transaction when Satoshi sent ten coins to him as a test. He was also the first person besides Satoshi to run the bitcoin network. With no competition, he was able to mine as much as a hundred coins a day using only his old PC’s off-the-shelf CPU.

After mining a thousand coins, Finney turned the machine off, as he and his son were worried the computer was overheating. The stash of bitcoins sat on Finney’s hard drive and was later burned to a DVD, left to gather dust.

The next time he heard of Bitcoin was late 2010, when he was surprised to find that it was not only still going on, bitcoins had monetary value. He quickly dusted off his old wallet and was relieved to discover that his bitcoins were still intact. As the price climbed, he transferred his coins into an offline wallet.

On May 22, 2010, Laszlo Hanyecz, aka ‘Bitcoin Pizza Guy’, bought two Papa John’s pizzas (worth $30) for 10,000 BTC. At the time, that seemed like a bargain, given Bitcoin’s low value. Today, one BTC is worth $10,000. So that is $100 million for the pizza!

Bitcoin Halving

Unlike fiat currencies, which can be printed by central banks at will, the supply of bitcoin is limited algorithmically. There will only ever be 21 million bitcoins in existence. This makes it a deflationary asset, as opposed to an inflationary one.

The halving of block rewards is a feature programmed into bitcoin and occurs every four years (210,000 blocks). This process will continue until the last bitcoin is mined in the year 2140. The block reward has been reduced to 6.25 BTC from the previous 12.5 BTC.

The block reward halving tends to have long-term positive effects on the price of bitcoin. If fewer bitcoins are being generated, the newly increased scarcity automatically makes them more valuable. According to previous data, there should be huge room for Bitcoin’s price to rise.

When the first halving occurred, BTC went from $11 to $1,100, then back down to $220. For the second halving, BTC went from $230 to $20,000, back down to $4,000, then rose again to $10,000. What will be the price this time when the halving occurred in May? The current price is trading around $9200 but several Bitcoin experts have predicted it could rise above $10,000 and beyond soon.

You may have missed the opportunity to gain from the property market and the stock market boom, but there is no reason you should miss the high-speed bullet train of Bitcoin. Start trading Bitcoin at Qidax platform today!

Blockchain Architect

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store