Despite being the world’s most famous cryptocurrency, Bitcoin – whose value crossed $100,000 for the first time on Thursday – has always been surrounded by mystery and controversy.
Here are some things to know about the volatile digital entity that has risen since Donald Trump won the US election by promising to make the country the “Bitcoin and cryptocurrency capital of the world”:
secret creator
In the 16 years since Bitcoin was invented, no one has been able to reveal the name of its founder.
It all started in October 2008, when a nine-page “white paper” attributed to Satoshi Nakamoto theorized “a purely peer-to-peer version of electronic cash[that]would enable online payments to be made by one party.” Will allow sending directly from another party.
The idea was to be free from the control of central banks, which have traditionally been the only institutions that can create money.
But is Satoshi Nakamoto a real name, a pseudonym, or a team of people? Despite various theories, the mystery persists.
An Australian computer scientist named Craig Wright claimed to have written the white paper, but the High Court in London ruled this year that he was not the mythical Nakamoto.
Since its creation, Bitcoin has been accused of being the currency of choice on the dark web for illicit payments that leave no trace. This is also the currency that hackers commonly demand payment during ransomware attacks.
fallen stars
The crypto world has been rocked by high-profile bankruptcies and the downfall of several star entrepreneurs.
Changpeng Zhao, the former head of Binance, the world’s largest cryptocurrency platform, was sentenced to four months in prison for violating US anti-money laundering laws.
“No desire to be CEO again. But certainly wouldn’t object to an apology,” Zhao said on X this week.
Binance’s main rival, FTX, filed for bankruptcy in late 2022, and its founder Sam Bankman-Fried was sentenced to 25 years in prison in March for fraud and conspiracy.
Their collapse has tarnished the sector’s reputation, but the crypto industry has continued to demand greater regulatory clarity, which Bankman-Fried has supported.
towards respectability
Bitcoin investors on Thursday applauded Trump’s decision to choose a crypto fan to head the US securities regulator, raising hopes the leader will pursue looser measures.
Even though much of the hype about Bitcoin is speculative, the currency has gained some respectability in recent years.
US financial regulators in January approved a Bitcoin ETF, or exchange traded fund, allowing the broader public to invest in the cryptocurrency without directly holding it.
In September 2021, El Salvador became the first country to accept Bitcoin as legal tender.
But crypto money has not won over the country’s population. According to a study by the University of Central America (UCA), 88 percent of Salvadorans in 2023 have never used one.
based on blockchain
Bitcoin is based on blockchain technology, a virtual ledger that allows information to be stored and exchanged in a secure, secret and immutable manner. Every transaction is recorded in a real-time, tamper-proof register.
Bitcoins are created – or “mined” – as a “reward” when powerful energy-sucking computers solve complex problems. So-called “miners” validate transactions to create Bitcoins.
To prevent uncontrolled growth, Satoshi Nakamoto limited the global number of coin units to 21 million, a level that should be reached around 2140.
Every four years, the reward for “miners” is cut in two – slowing the rate at which new Bitcoins enter the market, causing their scarcity and further increasing their value.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
