What is Bitcoin?

Bitcoin is a cryptocurrency and a payment system invented by an unidentified programmer, or group of programmers, under the name of Satoshi Nakamoto. Bitcoin was introduced on 31 October 2008 to a cryptography mailing list, and released as open-source software in 2009. There have been various claims and speculation concerning the identity of Nakamoto, none of which are confirmed.

The system is peer-to-peer and transactions take place between users directly, without an intermediary. These transactions are verified by network nodes and recorded in a public distributed ledger called the blockchain, which uses Bitcoin as its unit of account. Since the system works without a central repository or single administrator, the U.S. Treasury categorizes Bitcoin as a decentralized virtual currency. Bitcoin is often called the first cryptocurrency, although prior systems existed and it is more correctly described as the first decentralized digital currency. Bitcoin is the largest of its kind in terms of total market value.


Bitcoin Mining

Mining is the process of adding transaction records to Bitcoin's public ledger of past transactions. This ledger of past transactions is called the block chain as it is a chain of blocks. The block chain serves to confirm transactions to the rest of the network as having taken place. Bitcoin nodes use the block chain to distinguish legitimate Bitcoin transactions from attempts to re-spend coins that have already been spent elsewhere.

Mining is intentionally designed to be resource-intensive and difficult so that the number of blocks found each day by miners remains steady. Individual blocks must contain a proof of work to be considered valid. This proof of work is verified by other Bitcoin nodes each time they receive a block. Bitcoin uses the hashcash proof-of-work function.

The primary purpose of mining is to allow Bitcoin nodes to reach a secure, tamper-resistant consensus. Mining is also the mechanism used to introduce Bitcoins into the system: Miners are paid any transaction fees as well as a "subsidy" of newly created coins. These both serve the purpose of disseminating new coins in a decentralized manner as well as motivating people to provide security for the system.



Bitcoin Boom Cycles

Like any other commodity, bitcoins price keeps changing. We have broken down bitcoin’s historic price in separate graphs. We see that if we ignore the short term highs and lows, bitcoin is increasing in value.


In 2010, the price touched a maximum of $0.39 and then went to a low of $0.19. When the price went down, many people proclaimed that bitcoin is dead.


In 2011, from $0.19 the price went to $28.92 before going to a low of $2.05. In spite of this crash, the price was far higher than the previous low of $0.19.


In 2012-13, the price touched $230 and then crashed to $66.85.


In the last boom cycle in 2014, from the previous low, the price touched $1147.25 and after that touched a low of $117.


State of Bitcoins

Q1 2016 Record-setting bitcoin trading volume

What is Bitcoin ?