The history and purpose of Bitcoin begins with the question: What is Bitcoin and how does it work? Bitcoin is a digital or virtual currency that never needs any central banks or mediators to control it. It depends on peer-to-peer software and cryptography. The transactions are made through the bitcoin network (a peer-to-peer network) and are verified and recorded on a blockchain. Bitcoins can be used for the exchange process. It is the same as the way we keep cash in our wallet and use it for exchange. These are the virtual currencies that are held in the digital wallet and accessed through the online mode of transaction. The major purposes are to send money over the internet and to be free from central authority. The idea of Bitcoin was introduced to the world on October 31, 2008. The inventor of bitcoin remains a mystery because the inventor never revealed himself, but when a person posted a message in a paper titled “A Peer-to-Peer Electronic Cash System”, everyone assumed the author would be the inventor. It was published in a cryptography mailing list
However, the author, Satoshi Nakamoto, has never disclosed any of his personal information, so it has been a bit difficult to confirm his identity. Many people have started to believe that it is a pseudonym name. In this paper, Nakamoto outlaid the concepts of bitcoin as a decentralized digital currency. Decentralized means there is no particular administration or forum to control; instead, there will be a public ledger that records all the financial transactions that can be stored by anyone on their computers. In the history and purpose of bitcoin, the first time it was used is in 2009. On January 3, 2009, the first block, called the genesis block, was mined and the blockchain was launched. The blockchain is a distributed ledger containing transaction history and records that are reinforced by complex mining processes, and the transactions can be viewed by the public. The first version of the Bitcoin software was released on January 12, 2009. One week after launching the blockchain, the first test transaction took place one week later as Nakamoto sent 10 Bitcoins to Hal Finney, a noted computer programmer and developer.
The second version of the Bitcoin software was released in December by Nakamoto. It took more than one year for the first economic transaction to take place. It was on May 22, 2010, when the programmer Laszlo Hanyecz purchased two Papa John’s pizzas valued at a total of $25 by sending 10,000 Bitcoins to a London man. By November, the market capital for Bitcoin had exceeded $1 million for the first time. But the history and purpose of Bitcoin took a step back when someone spotted a susceptibility in the protocol of Bitcoin that allowed for transactions without proper verification. The transaction was soon deleted and it fixed the issue. For the first time, after passing the one-cent threshold in 2011, one bitcoin was worth one dollar. When TIME magazine published an article claiming that Bitcoin is used as a payment method in the dark web drug market, word spread quickly. By June, Bitcoin was at a value of $30, but soon it crashed back to $10 and Mt. Gox dealt with serious security issues, which is not for the first time.
Due to the black market, several countries have enacted regulations for the use of cryptocurrency. As of November, no other nations have legalized cryptocurrency. In countries like the US and Canada, digital currencies are legally permitted for trading purposes, but other countries prohibit cryptocurrencies, including bitcoin, even for trading purposes. Rather like 2011, in the history and purpose of Bitcoin, 2012 was a very good year. Since then, it has become the world’s top digital coin and crossed the $100 threshold in April. In 2013, it passed the value of $1000 for the first time, which is simply amazing and became the most successful. Throughout the years, it has experienced ups and downs, with 2017 being the most notable and busiest year for Bitcoin, with a value of nearly $3000.By 2017, Bitcoin became the fifth-largest cryptocurrency. As the price rises, more and more companies are involved in it. Again in 2018, many coins were sold and the price dropped. As of 2020, one bitcoin’s worth is nearly $12,000. But as of today, no one knows who Satoshi Nakamoto is or was. Can anyone guess the future of Bitcoin? No one can predict what the future will bring, but the lesson that we could take from this is, anything is not permanent and life is accustomed to ups and downs and we should.