Bit of history on the cryptocurrency market

In 2008, after the outbreak of the global economic crisis and with it the write-off of the huge funds that took place around the world, a person (or group) named Satoshi Nakamoto arose and decided that the time had come for a new currency.

A decentralized currency that is not controlled by governments and can not be nationalized or devalued without the mediation and distribution of a bank or a central body based on cryptography technology and transmitted through the P2P network.
In the first two years of existence of the currency, Levitokin had little value, but an active community of developers who joined Satoshi’s development work on BitKoin through anonymous forums on the Internet began to form around it, improving and updating the original programming code.

Seven years ago, in May 2010, a programmer named Laszlo Hanyecz ordered two pizzas from the “Papa Jones” network and paid in Eden in Bitcoin. On the same day, the Yankees asked a member of the Bitcoin lovers’ forum to get ten thousand Bitcoin for two pizzas from Papa Jones. At the time, Nike estimated that every Bitcoin coin that was “mined” by his computer was worth no more than $ 0.003 – meaning he paid $ 30 for the two pizzas. If the Nikes had kept the Bitcoin-paid for the pizzas, at today’s prices they would have been worth $ 21.8 million. In addition, in a quick calculation, those who purchased 7 years ago Bitcoin at a value of only 100 would now be sitting on a capital of $ 72.9 million.

The Bitcoin production process is called “mining” and is actually the solution of a highly complex algorithm in the hands of a computer to win every Bitcoin. That’s how the Nikes earned their first Bitcoin coins. However, the “crypto-currency” is largely treated with suspicion and perceived as a currency used for criminal activity. However, the currency record dizzying rally – 117% from the beginning of the year

Among the factors that helped the huge currency rally was the new legislation by the Japanese government that allows retailers to receive payment in Bitcoin, which also stimulated yen currency trading, which currently accounts for about 40% of all virtual currency transactions.
First, the fact that Bitcoin is a decentralized currency, that is, not under the control of anybody, bank or government, distinguishes it uniquely from all the types of money we know. In a distributed currency, you only determine when and where to transfer your money and no one can prevent it from you.
Second, the long-term supply of Bitcoins is rigid. In other words, the total amount of Bitcoin ever produced is fixed and known in advance and stands at a total of 21,000,000 coins, and after the last currency is created (around 2140) it will be impossible to produce any more coins.
This is expected to create a permanent shortage of Bitcoin in the long term and may cause its currency to continue rising as demand for the currency increases. To date, there are little more than 12 million coins in circulation. As more bitumen is produced, the difficulty in producing coins increases exponentially, and the quantity of reactors is reduced
In addition, the global political uncertainty drives the demand for Bitcoin, which is not legal tender subject to the regulation of any government, and many see it as a safe haven. Finally, a debate in the Bitcoin community due to concern about the future of the coin-making technology led to an alternative solution, which probably calmed down fears among many potential investors and strengthened the attractiveness of the currency.
The creation of new Bitcoin coins is carried out by means of an operation called Bitcoin Mining.
The mining is carried out by colleagues (“miners”) in the Bitcoin network, which contribute their computing power to the Bitcoin network and compete to solve complex mathematical problems. The computer that first solves the problem is rewarded with new Bitcoin coins added to the cycle.
This computational force is actually the engine behind the digital currency, which creates the process of encryption and security of Bitcoin, as well as responsible for the execution and approval of all transactions taking place in the Bitcoin network. Every such “computation contest” produces at the end something called a “block”. Each block contains the last transactions executed on the Bitcoin network and as such constitutes the basis for the currency to exist.
This feedback mechanism of harnessing the computing power of network members on the one hand. And their compensation in exchange for new Bitcoins, on the other hand, ensures that as long as Bitcoin has value in the free market, there will always be someone who will strengthen and operate the chain.

Posted on July 5, 2017 by yaki