A short introduction to Bitcoin


A short introduction to Bitcoin


Published Date: 2021-04-14 | Source: INCE|Connect | Author: Andrew Ludwig, Head of Distribution @ CURRENCY HUB

A short introduction to Bitcoin

Click on the video link to watch the short interview with David Farelo, Head of Operations and Trading @ CURRENCY HUB: https://youtu.be/3JLHXqmbtQE.

Bitcoin is the most popular cryptocurrency and was one of the first digital currencies to use peer-to-peer technology to facilitate instant payments. It inspired a host of other cryptocurrencies, a type of digital gold rush into alternative investments, and hit the press for both good and bad reasons.

It ultimately ushered in the disruptive landscape enabled by blockchain technology and a revolutionary peer-to-peer mindset.

Bitcoin was created in 2009 by a person or group using the alias Satoshi Nakamoto.

They released the Bitcoin white paper, which outlined the principles for a cryptographically secure, peer-to-peer electronic payment system designed to be transparent and resistant to censorship. It would put financial control back in the hands of the individual at a time when faith in central banks was beginning to wane. The world was in the grips of a financial crisis fuelled by extensive speculation in the financial markets and banks risking millions of dollars' worth of depositors' money.

The Bitcoin white paper laid the foundation for what is generally considered the first functional digital currency powered by the blockchain. One of the many ground-breaking elements of Satoshi's electronic payments system was that it solved the longstanding "double-spend" problem that had plagued cashless spending. It was no longer possible for a person to spend the same funds twice. This would be verified by a motivated digital community who would earn Bitcoin by building and maintaining the blockchain ledger.

Fast forward about a decade, on the back of a growing network with greater access to technology and mobile apps, we witnessed the massive adoption of Bitcoin at a retail level. The pre-eminent cryptocurrency rose from $2,000 to $20,000 in a matter of months before its downhill slide in late 2017 where it lost half its value and left many doubtful of its future.

2020 ushered in the Coronavirus pandemic and uncertainty across traditional markets following one of the biggest market crashes in history. Investors were looking for a safe haven as an alternative to equities, gold and currencies.

As the months played out, we witnessed the greatest money printing event in history. The U.S. Federal Reserve System issued a stimulus package three times larger than during the 2010 QE (Quantitative Easing) as the world's preferred currency came under threat. One out of every five dollars in circulation had been printed in 2020, while China's central bank had ramped up reports of its own digital currency
The scene was set for the next phase of the Bitcoin cycle.

Companies such as Tesla and MicroStrategy were looking to protect their corporate balance sheets from a devaluing USD currency and rapidly bought up huge reserves of Bitcoin. The rise of the Bitcoin price was further boosted when platforms such as PayPal, Square and MasterCard announced they would support cryptocurrencies, giving rise to a massive network effect and accessibility. Shortly thereafter, Wall Street firms such as Goldman Sachs, Citigroup, BlackRock, Deutche Bank and local Investec Bank launched crypto services for derivatives, prime broking and custody, with ETF's also beginning appear.

In 2020, 87% of Bitcoin investments came from institutional investors, dominated by asset managers.

Retail investors were the early adopters with their influence on institutional adoption returning Bitcoin's price to the $20,000 highs of December 2020. Bitcoin experienced a meteoric rise to $60,000 over the next 6 months, leading many to compare it to the advent of the internet 15 years previously with speculations of a valuation of over $100,000 in 2021.

Disclaimer: This article does not constitute financial advice. While the author and his firms are regulated by the FSCA, cryptocurrencies are not a regulated investment. Please refer to CURRENCY HUB https://currencyhub.co.za/ a juristic representative of BLACK ONYX (FSP 47701) https://blackonyx.co.za/ for more information.


Ngovela @SirNgov (twitter handle) 3 weeks ago

Hi team. I am currency mining Bitcoin with four plans thus far. I would like to share my appreciation on this article.