Bitcoin

• Bitcoin (BTC) functions as a decentralised cryptocurrency, not governed by any central authority or administrator.

• It facilitates direct peer-to-peer transactions, bypassing intermediaries, with transactions secured through cryptography and recorded on a blockchain.

• Introduced in 2008 by an entity known as Satoshi Nakamoto, its software was released as open-source in 2009.

• The supply of Bitcoin is capped, with new coins introduced at a decreasing rate via halving events every 210,000 blocks or about every four years.

• Halving reduces the mining reward by half, aiming to emulate the scarcity of precious metals and prevent inflation.

As of today 21 December 2024, the price of Bitcoin is ₹91,59,314.81 INR, with a 24-hour trading volume of 78163307814.85 USD. The market capitalisation for Bitcoin is 1944354731337.09USD. The circulating supply is 19799115 Bitcoin, with the total supply also being 19799115 Bitcoin.

Pros:

• Bitcoin operates without central authority control, reducing censorship and manipulation risks.

• It is secured by cryptography, making the network highly resistant to attacks.

• The maximum supply of 21 million coins sets a limit, rendering Bitcoin deflationary and possibly increasing its value as time progresses.

Cons:

• The coin experiences significant price volatility.

• Bitcoin faces scalability issues, affecting transaction fees and speeds during peak times.

• Bitcoin mining’s large energy consumption raises environmental concerns.

• Bitcoin is considered a potential store of value akin to gold, with its scarcity and growing use in payments and as an investment bolstering its appeal.

• Investors should weigh its volatility and regulatory uncertainties.

• Bitcoin’s unique selling point is its status as the first decentralised cryptocurrency, noted for its security, limited supply, and broad acceptance for payment and investment.

• Bitcoin addresses the issue of trust in financial transactions by eliminating the need for intermediaries, thus facilitating secure, transparent, and uncensored peer-to-peer transactions.

• Created by the pseudonymous Satoshi Nakamoto, whose identity remains unknown, Bitcoin is now maintained by a decentralised network of developers.

• Bitcoin was not launched through an ICO; it was directly available for mining.

• Its first recorded price in July 2010 was $0.0008 per coin.

• Investing in Bitcoin involves risks like price volatility, regulatory shifts, potential technological and security flaws, environmental impact from mining, and its use in illegal activities.

The Bitcoin whitepaper, titled “Bitcoin: A Peer-to-Peer Electronic Cash System,” was published by Satoshi Nakamoto in 2008. The paper presents the idea of a decentralised digital currency, facilitating online transactions directly between two parties without the intermediation of financial institutions. It highlights the issues associated with the conventional trust-dependent model, where financial institutions serve as trusted intermediaries for electronic payments. This model's fundamental flaws are outlined, such as the risk of fraud and the unnecessary reliance on trust.

Nakamoto proposes a solution to these problems through the use of a peer-to-peer network that timestamps transactions by hashing them into an ongoing chain of hash-based proof-of-work, forming a record that cannot be changed without redoing the proof-of-work. This process ensures the integrity and chronological order of the blockchain.

The whitepaper details the process of transactions, timestamp server, proof-of-work, network, incentive for nodes, reclaiming disk space through a Merkle tree, simplified payment verification, combining and splitting value, privacy, and calculations on the security of the network. It concludes that a system for electronic transactions without relying on trust can be established, allowing any two willing parties to transact directly with each other without the need for a trusted third party.

This groundbreaking concept laid the foundation for the development of Bitcoin and the proliferation of blockchain technology, revolutionising the way financial transactions are conducted and giving rise to the cryptocurrency industry.