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Bitcoin () is a cryptocurrency, a type of electronic money. It is a decentralized electronic currency with no central bank or single administrator that can be sent out of user-to-user on the peer-to-peer bitcoin network without the need for intermediaries.7
Transactions are confirmed by network nodes via cryptography and listed in a public dispersed ledger called a blockchain. Bitcoin was invented by an unknown person or group of individuals using the name Satoshi Nakamoto9 and released as open-source applications in 2009.10 Bitcoins are created as a reward for a process known as mining.
Research generated by the University of Cambridge estimates that in 2017, there were 2.9 to 5.8 million unique users using a cryptocurrency wallet, most of them using bitcoin.12.
Bitcoin has been criticized because of its use in prohibited transactions, its own high power consumption, cost volatility, thefts from exchanges, and also the chance that bitcoin is an economic bubble.13 Bitcoin has also been utilized as an investment, even though many regulatory agencies have issued investor alerts 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 software as open-source code and released it in January 2009.171810 Nakamoto's identity remains unknown.9.
In January 2009, the bitcoin network was created when Nakamoto mined the very first block of the chain, known as the genesis block.1920 Embedded in the coinbase of this cube was the following text:"The Times 03/Jan/2009 Chancellor on brink of second bailout for banks. "10 This note has been interpreted as both a timestamp and a comment on the instability brought on by fractional-reserve banking.21:18.
The recipient of the initial bitcoin transaction was cypherpunk Hal Finney, that created the first reusable proof-of-work platform (RPOW) in 2004.22 Finney downloaded the bitcoin applications on its release date, and on 12 January 2009 obtained ten bitcoins from Nakamoto.2324 Other early cypherpunk fans were founders of bitcoin predecessors: Wei Dai, creator of b-money, and Nick Szabo, creator of little golden.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 to Gavin Andresen. Andresen later became lead programmer at the Bitcoin Foundation.2829 Andresen then sought to decentralize control. This left opportunity for controversy to develop over the future development path of bitcoin.3029.
After ancient"proof-of-concept" transactions, the first major 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, worth roughly $214 million.31:222
In 2011, the price started at $0.30 each bitcoin, growing to $5.27 for year. The cost rose to $31.50 on 8 June. Within a month the price fell to $11.00. The next month it dropped 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 its calendar year.32 By 9 January the cost had risen to $7.38, but then dropped by 49 percent to $3.80 over the next 16 days. The price then rose to $16.41 on 17 August, but dropped by 57% to $7.10 within the next 3 days.35.
In March 2013 the blockchain temporarily split into two independent chains with different rules. The 2 blockchains operated simultaneously for half an hour, each using its own version of the transaction history. Normal operation was restored when the majority of the network downgraded to version 0.7 of their bitcoin software.37 The Mt.
Gox experienced processing delays due to insufficient capacity44 resulting in the bitcoin cost dropping from $266 to $76 prior to returning to $160 within six a knockout post hours.45 The bitcoin cost rose to $259 on 10 April, but then dropped by 83 percent to $45 within the next three days.35 On 15 May 2013, US government captured accounts associated with Mt.
881.48 This marked the first time a government agency had captured bitcoin.4950 The FBI captured about 26,000 bitcoins in October 2013 in the dark web website Silk Road during the arrest of Ross William Ulbricht.515253 Bitcoin's cost rose to $755 on 19 November and dropped by 50 percent to $378 the same moment.
In 2014, prices started at $770 and dropped to $314 for the year.32 In February 2014 that the Mt. Gox exchange, the most significant bitcoin exchange at the time, said that 850,000 bitcoins had been stolen from its own clients, amounting to almost $500 million. Bitcoin's cost fell by nearly half, from $867 to $439 (a 49% drop).