On October 31, 2008, on the eve of Halloween, an unknown person or group of people using the name Satoshi Nakamoto published the Bitcoin whitepaper, which is outlining a digital currency, secured by the blockchain.
The word “Bitcoin” is only used twice in the original whitepaper (in the title and a link to a web domain) and describe a system for electronic transactions without relying on trust. The medium of exchange for the system is a digital coin. Basically, Bitcoin is a triadic term that comprises fixed protocols, a digital coin, and also a decentralized blockchain forming an Electronic Cash System that works as a Peer-to-Peer Exchange.
Bitcoin enables a new payment system and a completely digital money. It is the first decentralized peer-to-peer payment network that is powered by its users with no middlemen, in order to facilitate transactions. And unlike the traditional currency, there is no local government or central bank controlling it.
Bitcoin transactions are immutable once added to the blockchain, so once a transaction has been verified and recorded, it cannot be reversed. It is ideal for those who want fast settlements and low fees, because anyone with an internet connection can use Bitcoin. People can safely send coins over a secured, distributed network directly to anyone else, without the need of traditional financial intermediaries. And also, the complete Bitcoin transaction history is available for anyone to view.
Bitcoin has many different values to people. Some see it as a store of value, having at the time of publishing an $11.1 Billion market cap it certainly is one and at the same time, some see it as a transaction system that allows individuals with less difficulty to purchase and sell goods and services. Alternatively, some concentrate on Bitcoin’s core technologies and the blockchain technology as the real value, with infinite applications to improve bank transactions through storing data.
The coronavirus pandemic triggered global economic and financial instability of a scale not seen since the Second World War and it will take years for the full impact of Covid-19 to be realized. In reaction to the financial crisis of 2007/8, Bitcoin has been established, but its market instability has made it a notoriously volatile investment. The latest price increases have prompted some to say that bitcoin has changed from a trading asset to a safe-haven asset, with some also identifying it as “digital gold.” As Nigel Green has said: “Up to now, gold has been known as the ultimate safe-haven asset, but bitcoin could potentially knock gold from its long-held position in the future as the world becomes ever-more tech-driven.”
Since starting this year (2020) trading at around $7,000, bitcoin saw steady gains before mirroring global markets in March by crashing to below $5,000. In the following five months, bitcoin’s gains have outstripped any other major asset and risen four-times faster than the Dow Jones Industrial Average.
“Bitcoin is currently realizing its reputation as a form of digital gold,” Nigel Green, CEO of finance firm deVere Group.