What users of Yellow Finance think about Bitcoin: token overview, price predictions, market trends, technology review and updates. Read and share your thoughts, too!
The Cryptocurrency That Shaped The Entire Crypto Industry. Bitcoin (BTC) Fact Sheet Bitcoin (BTC) is the first decentralized open-source cryptocurrency in existence. Bitcoin is a representation of a Layer-1 Peer-to-Peer (P2P) digital asset exchange system that enables the transfer of digital currencies from one person to another without relying on a central authority such as a bank, brokerage, or any other institution. Bitcoin (BTC) was initially launched in 2009 by a pseudonymous person or group of people that used the alias "Satoshi Nakamoto," who published the original Bitcoin whitepaper titled "Bitcoin: A Peer-to-Peer Electronic Cash System" in 2008. Bitcoin is secure and prevents the double-spending issue in a decentralized way by utilizing a unique consensus mechanism known as Proof-of-Work (PoW), which uses SHA-256d-based cryptography to reach consensus. Within this system, miners compete against one another in a race to verify the next blockchain block, which, once confirmed, gets added to the previous block, forming a chain. The winning miner wins a newly mined BTC cryptocurrency. This process typically takes 10 minutes to complete. The maximum supply of Bitcoin (BTC) is capped at 21 million tokens. To ensure that they are not mined quickly, there is Bitcoin halving, where ever 210,000 blocks (or four years based on estimates), the mining rewards get cut in half. Bitcoin (BTC) is not controlled by any company, government, or other entity, and is completely decentralized. Bitcoin nodes are run by the community and the code is open-source and guided by a consensus of top contributing developers. Bitcoin Historical Data Price Chart in the U.S. Dollars (USD) ![Bitcoin Historical Data Price Chart in the U.S. Dollars (USD). Source: TradingView ](https://yellow.com/api/storage/v1/object/public/articles/cd1f34c6-42f2-4781-ac76-326521336298.png) What is Bitcoin (BTC)? Bitcoin is a Peer-to-Peer (P2P) payment system created to fully operate without relying on a central authority to facilitate payment processing. It means that nobody controls Bitcoin, as all of it is based on a distributed ledger, where a set of computers spread out on a global scale are responsible for running the blockchain. The distributed ledger ensures that the network is entirely immune to manipulation, as every computer responsible for mining the BTC cryptocurrency has a full copy of its public ledger. All of the transactions within the network can be viewed publicly as a result, and users are allowed to buy and sell BTC directly through one another. The miners within the network are also referred to as validators, and nodes, among other names, are responsible for ensuring the network is secure. The Proof-of-Work (PoW) consensus mechanism achieves tamper-proofing based on the SHA-256d hash algorithm. How is Bitcoin (BTC) Used? Bitcoin (BTC) as a network is currently being used to transfer digital currencies, specifically, its native cryptocurrency that goes by the ticker symbol BTC. A person with a cryptocurrency wallet with a public address can send a specific BTC balance to another person with a public address. The transaction time, known as the mining time, is typically around 10 minutes. Bitcoin (BTC) has a maximum supply of 21 million tokens. Another intriguing aspect surrounding Bitcoin is that it has implemented halving to ensure that all 21 million tokens aren't mined too quickly. Within the blockchain, we have the distributed ledger – a shared database responsible for storing the data. Data within the blockchain gets scared by the encryption method utilized by Bitcoin. The information from the previous block is copied to the new block alongside the latest data. Then this block gets encrypted, and the transaction is finalized through the verification process done by the miners of the network. When a transaction is fully verified, a new block gets opened, and a Bitcoin (BTC) cryptocurrency is created and given as a form of reward to the miner that verified the data successfully. This way, Bitcoin is used by users who want to make transactions online and miners who want to monetize their hardware by contributing it as a form of security for the blockchain. Every 210,000 blocks, the mining rewards get cut in half. The reward began with 50 BTC in 2009; then the first halving was in 2012, where it split to 25 BTC, then in 2016 when the third halving occurred, meaning that the reward was split again to 12.6, and as of 2020, to an estimated length to 2024, the mining reward is at 6.25 blocks, after which it will decrease to 3.125 BTC. Bitcoin is also censorship-resistant. It cannot be censored or controlled by a government or corporate entity. This aspect of Bitcoin makes it a genuinely free ecosystem. Transactions throughout the Bitcoin network get verified by the nodes through cryptography. Additionally, every transaction on the Bitcoin network is stored on a block linked to a previous block of transactions. Bitcoin is fully immutable, and no entity can erase or alter any information that has already been recorded and approved on the network. Use-Cases of Bitcoin (BTC) Since its creation, numerous use-cases have emerged surrounding the Bitcoin (BTC) cryptocurrency. As the cryptocurrency industry evolved, so did the ways Bitcoin has been utilized thus far. The blockchain network that the miner's power through the incentive of the BTC cryptocurrency provides a secure way through which people can quickly and efficiently conduct transactions on a global scale. Anyone from anywhere in the world can send BTC as a cryptocurrency to any other person. What this also means is that the unbanked can also get access to financial services. For example, suppose someone could not access a traditional bank or banking system due to struggles surrounding political instability, hyperinflation, or any other issue. In that case, they could utilize a cryptocurrency wallet and send Bitcoin instead. El Salvador became the first country on a global scale to make Bitcoin (BTC) legal tender, which means that the population can use the cryptocurrency to pay bills, taxes, or anything else in the country. When we look at the business applications and use-cases surrounding the Bitcoin (BTC) cryptocurrency, we can also see that it has been utilized in various ways. The immutable ledger in the blockchain makes it well suited for completing tasks, such as real-time tracking of goods as they move and even change hands throughout the supply chain. Then there’s the ability to store health data on the blockchain, including general information such as age, gender, medical history, or anything else, all of which gets permanently recorded on the blockchain and cannot ever be tampered with. Usability & Primary Features of Bitcoin (BTC) There are numerous features found within Bitcoin which have been added throughout its lifespan as a blockchain-based project. Specifically, we have the following major updates and upgrades to the Bitcoin network: Segregated Witness (SegWit) is a protocol upgrade that initially went live in August 2017. The primary purpose of this upgrade was to separate witness signatures from transaction-related data. Witness signatures within legacy Bitcoin blocks typically take over 50% of the block size. By removing them, the protocol increased the number of transactions stored within a single block. Ultimately, this led to the network's ability to process many more transactions per second. Lightning Network is a Layer-2 micropayment solution specifically created to increase the scalability of the Bitcoin network. Its main goal is to enable near-instantaneous and low-cost payments between merchants and customers that aim to utilize the Bitcoin network. The Lightning Network was introduced in 2015 by Joseph Poon and Thaddeus Dryja. When we look at the Real-Time Lightning Network Statistics, there are currently 17,664 nodes that power the Lightning Network, making it one of the most significant developments within the blockchain. While a Bitcoin node must verify every transaction in the network, a Lightning Network node only has to check the validity of transactions with which it interacts directly. Schnorr Signatures and Taproot - When Schnorr Signatures are implemented, multiple parties can collaborate to produce a signature valid for the sum of the public keys. This benefits network scalability. Taproot is the upgrade that introduced the Schnorr digital signature scheme into Bitcoin and contributed to upgrading its overall cryptography. Ultimately, it is clear that all of these updates and upgrades to the Bitcoin blockchain had the primary purpose of increasing the transactions per second (TPS) and lowering the overall costs associated with conducting transactions on top of the Bitcoin network. Protocol The Bitcoin protocol is a peer-to-peer (P2P) network that operates on a cryptographic protocol. In a traditional sense, P2P relates to a network where each computer can act as a server for the others using the network and allows shared access to data without the need for a centralized server. The users can send or receive Bitcoin (BTC) as a cryptocurrency by broadcasting digitally signed messages to the network using a cryptocurrency wallet. Ledger The Bitcoin ledger is fully responsible for anonymously maintaining the participants' identities and their cryptocurrency balances. Furthermore, it also keeps a record of all of the genuine transactions executed between the network participants. Smart-Contract Support By default, at its original state and development, Bitcoin (BTC) as a network does not support smart contracts. Simple contracts that are indeed able to get executed on Bitcoin are typically low in terms of the functionality they can provide and normally highly costly. Over the years, numerous developers and teams have been aiming to provide Bitcoin with the functionality and support for smart contracts in the form of a Layer-2 solution, something that sits above the main blockchain, or even as Layer-1 solutions connected to Bitcoin directly. Some examples include Rootstock (RSK), Liquid Network, Stacks, RGB, and Lightning, to name a few. Tokenomics & Supply Distribution When we look at the tokenomics and supply distribution surrounding Bitcoin (BTC), we need to go over the fact that the primary way through which the network reaches consensus and new blocks get created through the utilization of the Proof-of-Work (PoW) consensus mechanism. Satoshi Nakamoto is the person or group responsible for mining the Genesis Block, which is essentially the very first block of the blockchain network. Through mining this block, Nakamoto essentially created the chain itself. However, Bitcoin is not pre-mined, and a cap of 21,000,000 BTC can ever be mined and brought into a digital existence. There is currently 19.076 million Bitcoin (BTC) mined and in circulation. Source: Blockchain.com It is essential to mention that Bitcoin halving occurs every 210,000 blocks and that the initial block reward was 50 BTC per block. As of June 24, 2022, the current block reward is 6.25 BTC per block. It is expected that the next halving will occur by 2024 when we see a decrease to 3.125 BTC. Team & History An anonymous person or group created Bitcoin under the pseudonym "Satoshi Nakamoto." Bitcoin project is open-source and has a global development community. As of 2022, there have been 872 contributors to the code of Bitcoin, and the chance is likely that this number will grow as the years move on. Bitcoin open-source contributions to the master branch. Source: GitHub You can refer to GitHub for the list of some of the most significant contributors to the Bitcoin code from August 30, 2009, to June 24, 2022. Activities & Community Bitcoin is the largest cryptocurrency in terms of market capitalization and popularity. It has the highest follower count, indicated by Bitcoin’s unofficial Twitter page, where the project had over 5.3 million followers at the time of writing. Development Activity and GitHub Repositories According to Bitcoin code data from GitHub, there have been 48 Active pull requests and 9 active issues from June 21, 2022, to June 28, 2022, in Bitcoin code. Of those, 14 authors have pushed 46 commits to the master branch and 46 to all branches. On master, 88 files have changed, and there have been 777 additions and 1,726 deletions. On-Chain Activity The average on-chain activity of the Bitcoin cryptocurrency is 243k tx within the last 7 days, with a high of 255.47k txs and a 7-day low of 199.78k txs. There is a 30-day average of 41.22 million addresses, with its high point at 41.41 million and low point at 41.08 million addresses. There have also been a total of 650.157k unique addresses used on the blockchain. Source: Blockchain.com When we go over Bitcoin’s ownership over time ratio, we can see that there are 28.27 million addresses that are hodlers for over one year, which makes up 61.15%. 15.15 million addresses are cruisers, 32.77%, and 2.81 million addresses are traders, which make up 6.08%. Activities and Partners The partners of the Bitcoin network include: Bitcoin Lightning Network - The Lightning Network depends upon the blockchain's underlying technology. Using genuine Bitcoin/blockchain transactions and its native smart-contract scripting language, it is possible to create a secure network of participants who can transact at high volume and speed. Bitcoin Cash - the main goal of this project is to provide digital money to the world by fulfilling the original promise of the Bitcoin network. Merchants can utilize it for low fees and reliable confirmations. Blockchair - a blockchain search and analytics engine for Bitcoin and Bitcoin Cash that can enable users to filter blocks, transactions, and outputs by 60 different criteria and perform text searches over the blockchains. FEE - Foundation for Economic Education is a think tank in the U.S. that reaches hundreds of millions of users globally and has 20,000 students through classroom programs. References & Reports References Bitcoin: A Peer-to-Peer Electronic Cash System Wikipedia – Double Spending Wikipedia – Proof-of-Work (PoW) Wikipedia – SHA-2 (Secure Hash Algorithm 2) Wikipedia – Blockchain Wikipedia – Peer-to-Peer Computing or Networking PWC – El Salvador’s law: a meaningful test for Bitcoin Wikipedia – Segregated Witness (SegWit) The Bitcoin Lightning Network: Scalable Off-Chain Instant Payments Wikipedia – Schnorr Signature Investopedia - Bitcoin’s Taproot Update Technopedia – Transaction per Second (TPS) Wikipedia – Smart Contracts Investopedia – Genesis Block Wikipedia – Open-Source GitHub - Bitcoin code repositories Twitter - Unofficial Bitcoin profile Investopedia – HODL Definition Market Reports Bitcoin TradingView Report Blockchain.com Bitcoin Explorer IntoTheBlock - Bitcoin
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