The ABC's Of Bitcoin - A Three Step Primer On The Daddy Of Crypto
When it comes to Cryptocurrency, Bitcoin is king. Its market cap dwarfs that of its nearest competitor Ethereum, and is still largely the only Crypto asset that attracts institutional money. If you are new to Crypto and are keen to dip your toe, here’s three things you need to know.
A is for Alternative
I’ll assume you know nothing about Bitcoin, so here’s a quick primer on the last eleven years.
According to Wikipedia, a mysterious guy named Satoshi Nakamoto registered the first Bitcoin domain in August 2008. Satoshi’s identity has remained a mystery since, despite a number of attempts of people trying to claim his identity and ultimately ownership of the worlds first Digital Currency.
Bitcoin was developed in order to provide an alternative to traditional currency, and the reliance on big banking institutions for the safeguarding our assets. Bitcoin is the embodiment of peer to peer transfers, removing the third party by way of a direct, encrypted transfer of currency from one digitally secure wallet, to another.
The idea is simple — Bitcoin is a digital form of cash, a store of value like any other that you can use to buy with, transfer or retain as an investment.
In January 2009, Bitcoin was born with the first digital transfer taking place. The timing couldn’t have been more symbolic. In September 2008, Lehman brothers famously failed, it was the biggest bankruptcy case in history and provided the perfect backdrop for the Bitcoin revolution.
Bitcoin was a new form of money, born from distrust for the old, for a world that seemed ready to accept a counter culture in money.
The digital currency spent the next eight years steadily finding its feet. By 2011 the Cryptocurrency space had developed into a variety of different currencies or “coins”, had reached parity with the US Dollar, and had given birth to a wide variety of startup businesses who saw the development of the space as the single biggest development in the history of finance.
By 2016 there had been scandals, bankruptcies, lawsuits and an increasingly parabolic rise in price. The Bitcoin bubble was well under way. The next year saw the highest all time price of Bitcoin, circa $20,000 USD per Bitcoin in December of 2017.
Word had gotten out. Bitcoin was everywhere, you heard about it in the bars you drank in, the McDonalds you ate in and it was everywhere in the financial media. People either loved it and saw it as the next coming of finance, or they hugely distrusted it, dismissing it as a fad.
2018 would see a dramatic decline in prices as the speculative bubble burst. The naysayers came out in force and smugly turned their backs. Those who saw Bitcoin (and what has become a vibrant, diverse and firmly established part of modern finance) for its long term value however, were buying.
Early 2019 saw the emergence of another bull market, prices rose to $12,500 USD before sliding back to current prices just below the $10,000 USD level. Everyday speculation has somewhat died away, the market seems more stable, with more buy and hold investors entering the market. It seems a new era in the life of Crypto is upon us, and big money is starting to listen.
What does the future hold? As ever in finance, no one knows with any certainty, but Bitcoin and the Crypto market is here to stay. The space continues to see resistance from legislative bodies and those that stand to loose from Bitcoin’s wider adoption, but the Crypto space is solidifying ground in the eyes of investors by the day.
There are definitely head winds ahead, but with a worsening economic picture underlaying global finance, the emergence of interest from bigger and bigger institutions, and the shift in focus of individual investors from quick profits to long term value, the future seems bright for Bitcoin.