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Bitcoin () is a cryptocurrency, a type of electronic money. It is a decentralized electronic currency without a central bank or single administrator which can be sent from user-to-user on the peer-to-peer bitcoin network with no need for intermediaries.7
Transactions are verified by network nodes via cryptography and listed in a public distributed ledger known as a blockchain. Bitcoin was invented by an unknown person or group of people using the name Satoshi Nakamoto9 and released as open-source applications in 2009.10 Bitcoins are made as a reward for a procedure known as mining.
Research produced by the University of Cambridge estimates that in 2017, there were 2.9 to 5.8 million unique users using a cryptocurrency wallet, the majority of them using bitcoin.12.
Bitcoin has been criticized because of its use in prohibited transactions, its high electricity consumption, cost volatility, thefts from exchanges, and also the possibility that bitcoin is an economic bubble.13 Bitcoin has also been used as an investment, although many regulatory agencies have issued investor alarms about bitcoin.14
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The domain name"bitcoin.org" was registered on 18 August 2008.15 On 31 October 2008, a link to a paper authored by Satoshi Nakamoto titled Bitcoin: A Peer-to-Peer Electronic Cash System5 was submitted to some cryptography mailing list.16 Nakamoto implemented the bitcoin applications as open-source code and published it in January 2009.171810 Nakamoto's identity remains unknown.9.
In January 2009, the bitcoin network was created when Nakamoto mined the first block of this chain, known as the genesis block.1920 Embedded in the coinbase of the block has been the following text:"The Times 03/Jan/2009 Chancellor on brink of second bailout for banks. "10 This note has been interpreted as either a timestamp and a comment on the instability brought on by fractional-reserve banking.21:18.
The receiver of the first bitcoin transaction was cypherpunk Hal Finney, that made the first reusable proof-of-work system (RPOW) in 2004.22 Finney downloaded the bitcoin applications on its launch date, and on 12 January 2009 obtained ten bitcoins out of Nakamoto.2324 Other early cypherpunk supporters were creators of bitcoin predecessors: Wei Dai, founder of b-money, and Nick Szabo, creator of little gold.25 In 2010, the first known business transaction using bitcoin occurred when developer Laszlo Hanyecz purchased two Papa John's pizzas for 10,000 bitcoin.26.
Nakamoto is estimated to have mined one million bitcoins27 before disappearing in 2010, when he handed the network alert crucial and control of the code over Gavin Andresen. Andresen afterwards became lead developer at the Bitcoin Foundation.2829 Andresen then sought to decentralize control. This abandoned opportunity for controversy to develop over the future development path of bitcoin.3029.
After early"proof-of-concept" transactions, the first significant users of bitcoin were black markets, for example Silk Road. During its 30 months of existence, beginning in February 2011, Silk Road exclusively accepted bitcoins as payment, transacting 9.9 million in bitcoins, home worth roughly $214 million.31:222
In 2011, the price started at $0.30 per bitcoin, growing to $5.27 for year. The price rose to $31.50 on 8 June. Within a month the cost fell to $11.00. The next month it fell to $7.80, and in another month to $4.77.32
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Litecoin, an early bitcoin spin-off or altcoin, appeared in October 2011.33 Many altcoins have been made since then.34
In 2012, bitcoin prices started at $5.27 growing to $13.30 for the calendar year.32 By 9 January the price had risen to $7.38, but then dropped by 49% to $3.80 over the next 16 days. The cost then rose to $16.41 on 17 August, but dropped by 57 percent to $7.10 over the next 3 days.35.
In March 2013 the blockchain briefly split into two independent chains with different rules. The two blockchains operated simultaneously for half an hour, each using its own version of the transaction history. Normal operation was restored when the vast majority of the network downgraded to version 0.7 of their bitcoin applications.37 The Mt.
Gox experienced processing delays due to insufficient capacity44 resulting in the bitcoin price dropping from $266 to $76 prior to returning to $160 within six hours.45 The bitcoin cost rose to $259 on 10 April, but then crashed by 83% to $45 home within the next 3 days.35 On 15 May 2013, US authorities captured accounts associated with Mt.
881.48 This marked the first time a government agency had seized bitcoin.4950 The FBI captured about 26,000 bitcoins in October 2013 in the dark website Silk Road during the arrest of Ross William Ulbricht.515253 Bitcoin's cost climbed to $755 on 19 November and crashed by 50% to $378 the same moment.
In 2014, prices began at $770 and dropped to $314 for the year.32 In February 2014 the Mt. Gox exchange, the largest bitcoin exchange at the moment, stated that 850,000 bitcoins had been stolen from its own clients, amounting to nearly $500 million. Bitcoin's price fell by almost half, from $867 to $439 (a 49% drop).