What is Bitcoin?

Bitcoin is the first distributed consensus-based, censorship-resistant, permissionless, peer-to-peer payment settlement network with a provably scarce, programmable, native currency. Bitcoin (BTC), the native asset of the Bitcoin blockchain, is the world's first digital currency without a central bank or administrator. The Bitcoin network is an emergent decentralized monetary institution that exists through the interplay between full nodes, miners, and developers. It is set by a social contract that is created and opted into by the users of the network and hardened through game theory and cryptography.

Bitcoin is a peer-to-peer online currency, meaning that all transactions happen directly between equal, independent network participants, without the need for any intermediary to permit or facilitate them. Bitcoin was created, according to Nakamoto’s own words, to allow “online payments to be sent directly from one party to another without going through a financial institution.”

Some concepts for a similar type of a decentralized electronic currency precede BTC, but Bitcoin holds the distinction of being the first-ever cryptocurrency to come into actual use.

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Who created Bitcoin? (The history of Bitcoin)

Bitcoin’s original inventor is known under a pseudonym, Satoshi Nakamoto. As of 2021, the true identity of the person or organization that is behind the alias remains unknown.

On October 31, 2008, Nakamoto published Bitcoin’s whitepaper, which described in detail how a peer-to-peer, online currency could be implemented. They proposed to use a decentralized ledger of transactions packaged in batches (called “blocks”) and secured by cryptographic algorithms — the whole system would later be dubbed “blockchain.”

Just two months later, on January 3, 2009, Nakamoto mined the first block on the Bitcoin network, known as the genesis block, thus launching the world’s first cryptocurrency. Bitcoin price was $0 when first introduced, and most Bitcoins were obtained via mining, which only required moderately powerful devices (e.g. PCs) and mining software. Satoshi Nakamoto released Version 0.1 of bitcoin software on Sourceforge on 9 January 2009. He created a website with the domain name bitcoin.org and continued to collaborate with other developers on bitcoin software until mid-2010. The first known Bitcoin commercial transaction occurred on May 22, 2010, when programmer Laszlo Hanyecz traded 10,000 Bitcoins for two pizzas.

In July 2010, Bitcoin first started trading, with the Bitcoin price ranging from $0.0008 to $0.08 at that time.

In August 2010, a major vulnerability in the Bitcoin protocol was spotted and exploited in the Bitcoin network, allowing users to create an infinite amount of bitcoins. The transactions exploiting the vulnerability were quickly spotted and erased for the Bitcoin blockchain, with the vulnerability being patched in a network upgrade of the Bitcoin protocol. This was the only major security flaw found and exploited in Bitcoin's history.

However, Satoshi Nakamoto only brought the concept of Bitcoin and did the basic development, and it was thanks to Gavin Andresen, who is the chief scientist of the Bitcoin Foundation, that Bitcoin became "a real product" and was used by people.

Gavin Andresen is originally a developer of 3D graphics and virtual reality software. He became involved in developing products for the bitcoin market in 2010. In December 2010, amidst rising publicity from Bitcoin's use in financing Wikileaks, Satoshi Nakamoto, disappeared from involvement with Bitcoin. It is unknown why Satoshi disappeared from the project, although some believe Satoshi, cognizant of past struggles to launch a digital currency, recognized that a leader of the Bitcoin project could be a central point of failure. Before he left, Satoshi handed over control of the source code repository and network alert key to Gavin Andresen, and transferred several related domains to various prominent members of the bitcoin community. Gavin Andresen was declared by Satoshi Nakamoto as the lead developer of the reference implementation for bitcoin client software then. It is estimated that Nakamoto had mined about one million bitcoins before disappearing in 2010.

In 2012, Gavin Andresen founded the Bitcoin Foundation to support and nurture the development of the bitcoin currency. And by 2014, Gavin Andresen left his software development role to concentrate on his work with the Foundation.

Apart from Satoshi Nakamoto and Gavin Andresen, another person who also has made outstanding contributions to the development of Bitcoin is Martti Malmi, the founder of the Bitcoin Forum. Martti Malmi was the second Bitcoin developer. Martti is known for being a developer who supported the development of the Bitcoin project from the very beginning, and with his support, Satoshi Nakamoto succeeded in releasing version 2.0 of the Bitcoin project. Malmi’s participation in the project also meant the creation of the first Bitcoin community forum. This forum later became what we know today as BitcoinTalk, the best-known cryptocurrency forum. Malmi also collaborated in the administration of the Bitcointalk and Bitcoin.org domains.

The above are the main members of the founding team of Bitcoin, in addition to Saïvann Carignan, Will Binns, and Craig Watkins, who were the developer and maintainer of the Bitcoin website.

Over the years a large number of people have contributed to improving the cryptocurrency’s software by patching vulnerabilities and adding new features. Currently, the Bitcoin core maintainer team is led by Wladimir van der Laan. Its members are Pieter Wuille, Marco Falke, Michael Ford and Samuel Dobson. Note that being a maintainer is not necessarily a permanent position, as network participants can choose to remove maintainers that they believe to be working against the community’s common vision of the Bitcoin network.

Where to buy Bitcoin?

You can buy Bitcoin (BTC) on almost every crypto exchanges, both for fiat currency and other crypto currencies. Some of the main markets are listed below:

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Bitcoin Cash Hard Fork

In 2017, Bitcoin experienced its most contentious fork to date. Amidst rising transaction fees on Bitcoin and increasingly divergent views on scaling Bitcoin, an agreement was reached amongst prominent Bitcoin stakeholders in what is now known as the "New York Agreement". The agreement was to support a set of network upgrades called SegWit2x. The proposal was backed by over 80% of Bitcoin's hash rate. However, despite the desires of miners, users wanted to activate SegWit without the 2MB block size increase, the philosophy underpinning this decision being that the users controlled the network, not miners and Bitcoin businesses. Subsequently, they set a date (August 1, 2017) where Bitcoin would soft fork to support SegWit and keep the 1MB block size. Enough nodes signaled support for it that they forced miners to accept or have their blocks rejected by the network. A faction of the bigger blocks camp, rejected SegWit altogether, citing frustrations with the prioritization of SegWit over bigger blocks, and on August 1, 2017, they launched a hard fork of Bitcoin called Bitcoin Cash, with 8MB block limits. These events marked, one end, a landmark demonstration of power by the users of the Bitcoin network, and on the other end, the first great schism within the Bitcoin community.