Bitcoin has become synonymous with crypto, but how did it become so successful and what did it set out to achieve when created?
In the midst of the fallout of the 2008 financial crisis, a lack of trust in traditional banking systems and a wariness of financial instability crystallized to pave the way for the launch of Bitcoin.
Bitcoin’s Beginnings: The Dawn of a New Era
Bitcoin’s pseudonymous creator, Satoshi Nakamoto, introduced the new cryptocurrency with a white paper published on October 31, 2008. The document outlined Bitcoin’s concept as a decentralized digital currency, operating as a peer-to-peer network of secure and efficient electronic transactions and without the need for intermediaries such as banks.
Bitcoin officially launched as a network on January 3, 2009, when Nakamoto mined the starting block of the chain.
Solving Issues, Challenging Tradition
At the heart of Bitcoin’s mission was the desire to bypass traditional banking establishments and the trust that had been placed in them to date. By removing a central authority (decentralization), Bitcoin was able to empower users to transact directly with one another in a far more accessible manner.
With a capped maximum supply of 21 million coins, Nakamoto also sought to hedge against inflation and provide a provably scarce asset. The “double spending” problem - where the same single coin of a digital currency can be spent multiple times - would be addressed by blockchain technology.
Growth and Success: Becoming the Crypto of Reference
Bitcoin’s growth and success is down to many factors. At the heart of its dominance of the crypto landscape is its innovative technology. Blockchain and the proof-of-work consensus mechanism allowed Bitcoin to establish trust with early adopters, which led to exponential interest in Bitcoin.
The dedicated community around Bitcoin and its acceptance of the cryptocurrency as a meaningful medium of exchange fed further traction and wider adoption, as its value continued - and continues - to increase.
The descriptions provided above are all based on publicly available information, and as such cannot be considered as financial advice or encouragement to invest. Sources of information used in this post include bitcoin.org, Investopedia and Forbes. All transactions involving digital assets involve certain risks, which you should familiarize yourself with prior to any investment.