In 2009, a man under the pseudonym Satoshi Nakamoto officially released the first in a long list of digital currencies which have come to be known as cryptocurrencies. A year prior to officially releasing Bitcoin, Satoshi Nakamoto published a paper titled Bitcoin: A Peer-to-Peer Electronic Cash System, where he espoused the virtues of cryptographic encryption, from which cryptocurrency gets its name.
When it first appeared, Bitcoin was only a humble, internet experiment. A theory is put into practice. Today, Bitcoin has evolved into a dominant force in the financial market. There are currently millions of investors worldwide, with that number expected to rise in the future, as younger generations seem far more likely to invest in Bitcoin than trust any investment institutions. Bitcoin has become so popular, that recent surveys have shown that almost a fifth of the American adult population are Bitcoin investors, with many of them incorporating their Bitcoin gains in future plans.
There are a number of factors contributing to Bitcoin’s popularity, foremost being its proven success rate. Bitcoin began in 2009, with a value of only 0.0008 dollars, and it took a whole year for it to even start approaching $1. In only a decade, Bitcoin’s price has skyrocketed to $35.000, with the record high being $40.000.
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Factors that Made Bitcoin Popular
A contributing factor to the popularity of Bitcoin may have been the great number of crypto trading sites that have been appearing lately all over the internet. Trading sites make it easy and simple to start investing, as they offer an easily accessible, and easy way to invest. They offer investment tutorials, safety tips, and security measures to make sure your anonymity is always safe and incorporate artificial intelligence technology, the goal of which is to predict the market’s fluctuating prices.
Another reason for Bitcoin’s success has to do with its popularization in the mainstream. For example, plenty of businesses have embraced cryptocurrency as a valid payment method. The most notable industry to embrace crypto is the iGaming industry. You can play casino games while funding your account with Bitcoin, Ethereum, or Tether.
But, even knowing all this, many are still wondering, how exactly does cryptocurrency work? The main reason that Bitcoin and other cryptocurrencies can work and function the way they do, is thanks to the blockchain technology, which is used to maintain the systems and validate transactions.
What is a Blockchain?
To put it plainly, a blockchain is a series of cryptographically linked blocks. Each of these blocks contains algorithms, the function of which is to map the arbitrary-sized data, to a fixed-size bit array. These algorithms are called cryptographic hashes. Apart from a cryptographic hash, each block also contains a timestamp and the transaction data.
Blockchains are based on a peer-to-peer network and are used as a publically distributed ledger. The nodes in the ledger communicate according to a set protocol, and through this process, new blocks are validated. Blockchain records may be altered, for example, if two or more of the developers disagree with newly installed protocols. When a developer, or a group of them, disagree with given protocols and decide to split the blockchain, a hard fork occurs.
The Blockchain was created by Satoshi Nakamoto in 2008, with the goal of serving as a ledger for Bitcoin. Through blockchain technology, and the process of mining, Satoshi Nakamoto solved a problem which had long plagued digital currency, known as double-spending. With this, Bitcoin became the first ever digital currency to have solved this problem, which ensured it was a viable investment option and a viable option for transactions.
Hard Forks
As said before, a hard fork occurs when blockchain developers don’t agree on a change in the system protocol. So when this happens, a group of developers may choose to split off from the blockchain, incorporating their own protocols, and so the blockchain forks.
Bitcoin has had a number of hard forks in its short history, some successful, some less so. The most successful Bitcoin hard fork, by far, has to be Bitcoin Cash, which today has a value surpassing $400, and a market capitalization exceeding $5 Billion.
Conclusion
The crypto market has shaken up the world of finance in 2023. There are some incredible factors that go into making a successful crypto. However, the most important aspect of the industry is certainly the blockchain technology, on which cryptocurrencies run. We hope that this article can help you better understand what blockchains are, and how Bitcoin works.
