Bitcoin and cryptocurrencies are still on everyone's lips. We explain what this digital currency is, how it works and how to invest in bitcoin in Spain this 2022 that begins.
Digital currencies emerge as an alternative to traditional fiat currencies and have their greatest exponent in bitcoin. The cryptocurrency has become one of the best long-term investments (full of risks, yes). Someone who had invested 1,000 euros in 2010 would be a millionaire today.
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what is bitcoin
Bitcoin is an independent and intangible digital currency . What differentiates this cryptocurrency from a common currency such as dollars or euros is that it does not belong to any State. In other words, what is Bitcoin and how does it work? They are basically decentralized currencies as there is no central bank, government or financial institution or company that acts on it.
In the case of the euro, the Central Bank can intervene to affect the price through massive money issues or through interest rates. This is not possible with Bitcoin. Moreover, its creators have already set a limit for the number of bitcoins in circulation: 21 million .
The control of Bitcoin rests with the users themselves. These are the ones who validate any operation through exchanges (Point to Point P2P), without state intervention or any institution. In fact, the structure itself makes it impossible to manipulate its value. To make any change, it is necessary that the entire user community approve it.
Bitcoin is the first digital currency to become popular. What differentiates Bitcoin from other attempts is its block chain or blockchain technology – later we will explain better what it consists of and we will give you an easy guide on blockchain, how it works and its relationship with cryptos –.
August 2008 marks the birth of Bitcoin with the registration of the bitcoin.org domain.
Two months later, in October, the first document explaining the design of the digital currency is published and in January 2009 the bitcoin network is officially born with the publication of the first open source code of a client. It is at that moment when the first Bitcoin block is mined with 50 prize bitcoins and the first shipment of this currency is made - later we will explain what bitcoin mining consists of -.
In October 2009 , the first transaction was made in dollars with a price of 1,309.03 BTC (Bitcoin) for one dollar.
The first exchanges of Bitcoin for dollars are made as early as 2010 at a price of 1 BTC for $0.003. Also in 2010, Mt Gox, one of the largest Bitcoin brokers, was created, which would later be famous for being the star of the biggest scam with this digital currency.
In May 2010 the first purchase in bitcoin takes place . Specifically, 10,000 BTC were paid for two pizzas. We can say that these are the most expensive pizzas in history. At the current price, we are talking about 30 million dollars for two pizzas.
In 2011 other cryptocurrencies begin to emerge and the growth of Bitcoin continues until 2013, when it receives a new push and its price reaches 3,000 dollars.
It is not until 2015 when Bitcoin begins to be legislated as a payment method – let us remember that this is its main function. That year the EU exempts operations with this virtual currency from VAT, while advancing the technology that allows mining and obtaining bitcoins faster. In addition, it raises it to the rank of payment method.
But the real boom of Bitcoin does not come until 2017. It is at the beginning of the year when it exceeds 2,000 dollars and even 3,000 dollars per BTC. The reason, according to experts, is that the BTC would be losing value as a means of payment and would begin to have it as a financial asset, something similar to what happens when investing in gold .
Throughout 2017, the value of bitcoin exceeded $20,000, marking a milestone.
In 2018, the volatility reached the electronic currency and registered a drop of more than 80% from its maximum , to approximately 3.00 dollars.
During 2019 the value of bitcoin stabilized again around $8,000.
In 2020, with the coronavirus crisis, bitcoin became an ally for investors and at the end of the year it was trading close to $30,000.
In 2021 the cryptocurrency smashed all its records. Currently, Bitcoin has reached over $46,000 . And in 2022 it was expected to continue to be so, although for now it has followed a volatile dynamic.
Added to this is another relevant question: how many bitcoins are mined? Currently, 18.8 million mined bitcoin units have already been exceeded, which brings us closer to the maximum threshold of 21 million bitcoins that will be created.
In fact, its production and value is based on the law of supply and demand. Another interesting detail is that Bitcoin has a fixed limit of 21 million coins.
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