The Backstory of Bitcoin

Posted on September 23, 2019

By Natalie Lord

There are hundreds of cryptocurrencies all vying for attention and market share. In a series starting this week, we look at the preferred five: Bitcoin, Ethereum, Ripple, Litecoin and Bitcoin Cash.

Bitcoin was invented in 2008 by an unknown person using the name Satoshi Nakamoto. Over the years there has been much speculation as to who Satoshi Nakamoto is, but so far no one has been able to identify the face of Bitcoin.

Bitcoin is a decentralized digital currency. It operates without a sole administrator or a central bank and can be sent from user to user through the Bitcoin network without the need for any intermediaries. Bitcoin transactions are verified by network nodes that use cryptography and are recorded in a public distributed ledger known as a blockchain.

Bitcoins are created through a process known as mining and can be exchanged for other cryptocurrencies, products and services. Bitcoin is by far the most recognised and widely acceptance cryptocurrency of them all, at least at present. The majority of Bitcoin transactions happen on cryptocurrency exchanges. Increasingly it is being accepted by merchants, although its uptake has been hampered by scalability issues and delayed transaction times. It is, however, seen as a sound solution for cross-border payments and is used increasingly for large-item purchases on sites like overstock.com.

Bitcoin has suffered greatly with volatility and seen its price skyrocket and plummet over the past few years. In 2017 prices hit US$998 before rising exponentially to hit a high of US$19,783.06 on December 17 2017.

The price of Bitcoin fluctuated between US$11,480 and US$5,848 in the first six months of 2018. On January 1 2019 the price of Bitcoin was at US$3,747, down more than 80% from its all-time high.

Bitcoin, and cryptocurrencies in general, have been negatively affected by a number of setbacks. In the first half of 2018, approximately US$761 million worth of cryptocurrencies were stolen. A string of hacks and thefts from cryptocurrency exchanges including Coincheck, Coinrail, Bithumb and Bancor between January and July of 2018 left investors fearful of the safety of their holdings and looking elsewhere to invest.

The cryptocurrency industry has also been blighted by its use in illegal transactions, and blasted for the high-electricity consumption generated by mining the currencies. It has also faced skeptism from traditional industries and push back from governing bodies around the world, who want to see some form of rule and regulation bringing structure to the cryptocurrency arena.

In spite of all of the above, Bitcoin continues to grow in popularity. It may be intangible, but it shows no signs of disappearing anytime soon.

Note: All five of the cryptocurrencies we’ll be looking at are traded on Kryptos-X in the following pairs: BTC/ETH, BTC/XRP, BTC/LTC, BTC/BCH, ETH/BCH. Kryptos-X has introduced zero trading fees, having waived their maker and trader fees. Other exchanges typically charge fees or have hidden costs.

 

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ACCESS

Singapore Cryptocurrency and Blockchain Industry Association

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