In 2009, Bitcoin began its story as a diamond in the rough. Twelve years later in mid-February, there has been a Bitcoin bull run. Bitcoin hit an all-time high of over $53,000, a treasure to anyone who managed to buy and hold. To understand where cryptocurrency in general and Bitcoin in particular is today, an overview of its tumultuous history is in order.
The History of Bitcoin
While Bitcoin began in 2009 as the first successful cryptocurrency to launch publicly, it was not used in a transaction for goods until 2010, at which point someone paid 10,000 BTC for 2 pizzas. This gave Bitcoin a starting point in monetary value. In 2011, the first successful alt coin, Namecoin, also entered the market to compete. Bitcoin stayed a favorite, however. By 2013, Bitcoin reached $1,000 in value for the first time before crashing to $300. Though it would take 3 years for Bitcoin to recover, the cryptocurrency still saw gradual growth in the number of establishments, banks, and fintech institutions open to crypto and blockchain. As crypto’s reputation went mainstream, Ethereum launched in 2016 with an Initial Coin Offering (ICO), proving the trend set by Bitcoin was here to stay.
The First Bitcoin Boom
In 2017, Bitcoin rose to unprecedented heights when its price jumped from under $1,000 to over $19,000 in the span of one year. Unfortunately, legal troubles hit the cryptocurrency market, crashing Bitcoins value by 70% once again in 2018. Despite the setbacks, Bitcoin still outperformed the best stocks on the market in 2019. Following the current pandemic, a slow global economy has attracted new investors to cryptocurrency. For those willing to face the risks, Bitcoin and those like it offer returns impossible to find elsewhere in the financial system.
More than speculation, some investors see crypto as a hedge against US inflation. Bitcoin maintains a finite supply of its currency, reducing new supply every 4 years by halving the rewards miners receive for processing transactions. As such, Bitcoin is believed to be a lower inflation risk than the US dollar, of which 20% of the dollars in circulation were printed last year to address economic slowdown.
Why Bitcoin is Growing
As Bitcoin grows in accessibility, more and more companies are betting on it. Tesla recently purchased $1.5 billion worth of Bitcoin and vows to accept the cryptocurrency as payment. Not to be outdone, Apple Pay began accepting BitPay, a prepaid Bitcoin MasterCard. Bitcoin may now be used in any location where MasterCard is accepted. All these factors taken together suggest Bitcoin is not going away anytime soon.
With the growth in cryptocurrency’s popularity, there needs to a matching growth in awareness of the cost of mining and maintenance. In 2017, the estimated power required to run all cryptocurrency exceeded the power needs of the Republic of Ireland. Soon, the market will surpass the energy consumption of Hungary and New Zealand. In 2020, Bitcoin alone consumed 120 gigawatts per second. That’s equivalent to 156 million horses!
Despite the risk, crypto may well be the future of global currency. Don’t miss out on the Bitcoin bull run!
