History Of Bitcoin (Know More About: Bit Coin)

Bitcoin – $11,748.90(Jun 27 2019)

Bitcoin (₿) is a cryptocurrency, a form of electronic cash founded by Satoshi Nakamoto. It is a decentralized digital currency without a central bank or single administrator that can be sent from user to user on the peer-to-peer bitcoin network without the need for intermediaries.

Creation of Bit Coin

On 3 January 2009, the bitcoin network was created when Nakamoto mined the first block of the chain, known as the genesis block. Embedded in the coinbase of this block was the text “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks“.

The receiver of the first bitcoin transaction was cypherpunk Hal Finney, who created the first reusable proof-of-work system (RPoW) in 2004. Finney downloaded the bitcoin software on its release date, and on 12 January 2009 received ten bitcoins from Nakamoto.

In 2010, the first known commercial transaction using bitcoin occurred when programmer Laszlo Hanyecz bought two Papa John’s pizzas for ₿10,000.

Blockchain analysts estimate that Nakamoto had mined about one million bitcoins before disappearing in 2010, when he handed the network alert key and control of the code repository over to Gavin Andresen. Andresen later became lead developer at the Bitcoin Foundation. Andresen then sought to decentralize control. This left opportunity for controversy to develop over the future development path of bitcoin, in contrast to the perceived authority of Nakamoto’s contributions

Bitcoin price started at $0.30 per bitcoin, the price of bitcoins has gone through cycles of appreciation and depreciation till now 2019, $13,000 is now the price per bitcoin.

Bitcoin prices were negatively affected by several hacks or thefts from cryptocurrency exchanges, including thefts from Coincheck in January 2018, Coinrail and Bithumb in June, and Bancor in July. For the first six months of 2018, $761 million worth of cryptocurrencies was reported stolen from exchanges. Bitcoin’s price was affected even though other cryptocurrencies were stolen at Coinrail and Bancor as investors worried about the security of cryptocurrency exchanges.

Block Chain

In the blockchain, bitcoins are registered to bitcoin addresses. Creating a bitcoin address requires nothing more than picking a random valid private key and computing the corresponding bitcoin address. This computation can be done in a split second. But the reverse, computing the private key of a given bitcoin address, is mathematically unfeasible. Users can tell others or make public a bitcoin address without compromising its corresponding private key.

To be able to spend their bitcoins, the owner must know the corresponding private key and digitally sign the transaction. The network verifies the signature using the public key; the private key is never revealed.
If the private key is lost, the bitcoin network will not recognize any other evidence of ownership; the coins are then unusable, and effectively lost.

To ensure the security of bitcoins, the private key must be kept secret. If the private key is revealed to a third party, e.g. through a data breach, the third party can use it to steal any associated bitcoins. As of December 2017, around 980,000 bitcoins have been stolen from cryptocurrency exchanges.

Satoshi Nakamoto stated in his white paper that: “The root problem with conventional currencies is all the trust that’s required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust.”

Is bitcoin legal?

The legal status of bitcoin varies substantially from country to country and is still undefined or changing in many of them. Regulations and bans that apply to bitcoin probably extend to similar cryptocurrency systems.

According to the Library of Congress, an “absolute ban” on trading or using cryptocurrencies applies in eight countries: Algeria, Bolivia, Egypt, Iraq, Morocco, Nepal, Pakistan, and the United Arab Emirates. An “implicit ban” applies in another 15 countries, which include Bahrain, Bangladesh, China, Colombia, the Dominican Republic, Indonesia, Iran, Kuwait, Lesotho, Lithuania, Macau, Oman, Qatar, Saudi Arabia and Taiwan.

Are bitcoins ponzi scheme and pyramid scheme?

Various journalists, economists, and the central bank of Estonia have voiced concerns that bitcoin is a Ponzi scheme. In April 2013, Eric Posner, a law professor at the University of Chicago, stated that “a real Ponzi scheme takes fraud; bitcoin, by contrast, seems more like a collective delusion. A July 2014 report by the World Bank concluded that bitcoin was not a deliberate Ponzi scheme.

In June 2014, the Swiss Federal Council examined the concerns that bitcoin might be a pyramid scheme; it concluded that, “Since in the case of bitcoin the typical promises of profits are lacking, it cannot be assumed that bitcoin is a pyramid scheme.” In July 2017, billionaire Howard Marks referred to bitcoin as a pyramid scheme.

Bitcoin is vulnerable to theft through phishing, scamming, and hacking. As of December 2017, around 980,000 bitcoins have been stolen from cryptocurrency exchanges.

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