Bitcoin is a cryptocurrency and global payment system. This is the first decentralized digital currency because the system works without a central bank or a single administrator. The network is peer-to-peer, and transactions are conducted directly between users without intermediaries. These transactions are verified by network nodes through the use of cryptography and recorded in a public distributed ledger called a blockchain.
Bitcoin was created as a reward for a process called mining. They can be exchanged for other currencies, products and services. As of February 2015, more than 100,000 merchants and suppliers accept Bitcoin as payment.
Research by the University of Cambridge estimates that in 2017, between 2.9 million and 5.8 million unique users used cryptocurrency wallets, most of whom used Bitcoin. The term Bitcoin first appeared in the white paper published on October 31, 2008 and gave a definition.
It is a compound word of the two words bit and coin. White papers often use shorter coins. There is no uniform convention for Bitcoin capitalization.
On August 18, 2008, the domain name “bitcoin.org” was registered. In November of the same year, a link to a paper entitled “Bitcoin. Peer-to-Peer Electronic Cash system” (Peer-to-Peer Electronic Cash system) written by Satoshi Nakamoto was posted.
Nakamoto implemented the Bitcoin software as open source code and released it on SourceForge in January 2009. The identity of Satoshi Nakamoto is still unknown. In January 2009, after Satoshi Nakamoto mined the first block on the chain, the so-called genesis block, the Bitcoin network emerged. The following text is embedded in the coin library of this block:
The Times 03/Jan/2009 Chancellor on brink of second bailout for banks
This note was interpreted as both a timestamp of the founding date and a mocking comment on the instability caused by partial reserve banks.
One of Bitcoin’s first supporters, adopters and contributors was Hal Finney, the programmer and recipient of the first Bitcoin transaction. Finney downloaded the Bitcoin software on the day it was released and obtained 10 Bitcoins from Satoshi Nakamoto, which was the first Bitcoin transaction in the world. Other early supporters include Wei Dai, the creator of Bitcoin’s predecessor b-Money, and Nick Szabo, the creator of Bitcoin’s predecessor Bit Gold.
It is estimated that in the early days, Satoshi Nakamoto had mined 1 million bitcoins. In 2010, Nakamoto handed over control of the network alert key and the Bitcoin core code base to Gavin Anresen, who later became the lead developer of the Bitcoin Foundation. Satoshi Nakamoto then disappeared from any involvement with Bitcoin. Anderson stated that he subsequently sought to delegate control, stating:
“So, if I get hit by a bus, it would be clear that the project would go on”
This leaves an opportunity for development in the controversy surrounding the future development path of Bitcoin. The value of the first batch of Bitcoin transactions was negotiated by individuals on the Bitcoin Talk Forum, and one of the notable transactions was 10,000 BTC for the indirect purchase of two pizzas from Papa John’s.