Bitcoin and cryptocurrencies are still on everyone’s lips. We explain what this digital currency is, how it works and how to invest in bitcoin in Spain this 2022 that begins.
Digital currencies emerge as an alternative to traditional fiat currencies and have in bitcoin their maximum exponent. Cryptocurrency has become one of the best long-term investments (full of risks, mind you). Someone who had invested 1,000 euros in 2010 today would be a millionaire.
[Do not miss our showcase where you can acquire bitcoin and other cryptocurrencies, compare and then decide which one best suits you.] Here you can see different platforms where you can buy bitcoin and other cryptocurrencies, tokens… What is Bitcoin
Bitcoin is an independent and intangible digital currency. What differentiates this cryptocurrency from a currency to use such as dollars or euros is that it does not belong to any State. In other words, what is Bitcoin and how does it work? They are basically decentralized currencies, as there is no central bank, government or financial institution or company acting on it.
In the case of the euro, the Central Bank can intervene to affect the price through massive issues of money or through interest rates. This is not possible with Bitcoin. What’s more, its creators have already set a limit for the number of bitcoins in circulation: 21 million.
Control of Bitcoin rests with the users themselves. It is these who validate any operation through exchanges (Point to Point P2P), without state intervention or any institution. In fact, the structure itself makes it impossible to manipulate its value. To make any change it is necessary that the entire community of users approves it.
Bitcoin is the first digital currency to become popular. What differentiates Bitcoin from other attempts is its blockchain technology – later we will explain better what it consists of and leave you an easy guide on blockchain, how it works and its relationship with cryptos.
- August 2008 marks the birth of Bitcoin with the registration of the domain bitcoin.org.
- Two months later, in October, the first document explaining the design of the digital currency is published and in January 2009 the bitcoin network is officially born with the publication of the first open source of a client. It is at that moment when the first block of Bitcoin is mined with 50 bitcoins of prize and the first shipment of this currency is made -later we explain what bitcoin mining consists of-.
- In October 2009 the first transaction in dollars is made with a price of 1,309.03 BTC (Bitcoin) for one dollar.
- The first bitcoin exchanges for dollars are made as early as 2010 at a price of 1 BTC for $0.003. Also in 2010 Mt Gox was created, one of the largest Bitcoin brokers, which would later be famous for starring in the largest scam with this digital currency.
- In May 2010 the first purchase in bitcoin takes place. Specifically, 10,000 BTC was paid for two pizzas. We can say that these are the most expensive pizzas in history. At the current price, we are talking about 30 million dollars for two pizzas.
- In 2011 other cryptocurrencies begin to emerge and the growth of Bitcoin continues until 2013, when it receives a new push and its price reaches $ 3,000.
- It is not until 2015 when Bitcoin begins to be legislated as a payment method – remember that this is its main function. That year the EU exempts from VAT the operations with this virtual currency, while advancing the technology that allows mining and obtaining bitcoins faster. In addition, it elevates it to the rank of payment method.
- But the real Bitcoin boom doesn’t come until 2017. It is at the beginning of the year when it exceeds 2,000 dollars and even 3,000 dollars per BTC. The reason, according to experts, is that BTC would be ceasing to have value as a means of payment and would begin to have it as a financial asset, something similar to what happens when investing in gold.
- Throughout 2017 the value of bitcoin reached over $20,000, marking a milestone.
- In 2018, volatility reached the electronic currency and registered a fall of more than 80% from its highs, to approximately $ 3.00.
- During 2019 the value of bitcoin stabilized again around 8,000 dollars.
- In 2020, with the coronavirus crisis, bitcoin became an ally for investors and at the end of the year traded close to $ 30,000.
- In 2021 the cryptocurrency pulverized all its records. At present, Bitcoin has reached over $46,000. And in 2022 it was expected to remain so, although for now it has followed a volatile dynamic.
- To this is added another relevant question: how many bitcoins are mined? At present, the 18.8 million units of mined bitcoin have already been exceeded, which brings us closer to the maximum threshold of 21 million bitcoin that will be created.
- In fact, its production and value is based on the law of supply and demand. Another interesting detail is that Bitcoin has a set limit of 21 million coins.
Who created Bitcoin
The creator of Bitcoin is anonymous, but it is believed that it was Satoshi Nakamoto. It is a pseudonym, so it is not known if it is a person or a group of people.
Satoshi Nakamoto is the name listed as the creator of the bitcoin protocol, who mines the first block of bitcoin and makes the first transaction to Hal Finney.
This user made his last public contribution to the development of digital currency in 2010.
Until 2016 Gravin Andresen was the most visible figure of Bitcoin.Who controls the bitcoin network
Although Bitcoin has developers who act as spearheads, no one controls the digital currency like no one can control the development of email in the sense that it does not have a single owner.
Programmers can improve Bitcoin’s software, but they can’t impose a change in the protocol. This must follow the same rules for everyone and these are created in consensus among all users with their decisions on which platforms they choose to operate, for example.
In fact, when discrepancies arise about Bitcoin they are solved among the entire community. For now there has only been one occasion in which no consensus was reached and resulted in the creation of Bitcoin Cash, a new fork in technical language. For the ordinary public it would be a new separate version of the base cryptocurrency with which it shares the same history of blocks until separation.
From there, the ‘control’ of transactions is done through the users themselves, who are the ones who validate the blocks of the chain and the security of the transaction. Since this chain cannot be altered because it is present in thousands of computers around the world and that everyone must approve each change the real control of bitcoin users.
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For the end user Bitcoin is one more means of payment, as can be the euro and an asset in which to invest, such as a stock or oil. So, is it safe to invest in bitcoin or not? Faced with this question, it is convenient to know that behind this entire market there is a technology that is what allows the system to be reliable. It is the blockchain technology that, among other things, prevents the double expenditure of the currency, that is, that someone can spend the same bitcoin again.
In a very brief way, the Bitcoin network is a public accounting system of which each user keeps a copy. Every time someone makes a transaction it is stored on the computers of the users, so that what is known as the double expense is avoided.
The following video that we share summarizes how bitcoin and other cryptocurrencies work,their strengths and weaknesses: What is the blockchain