Wondering what led to Bitcoin’s growth into big money? If so, here’s what contributed to Bitcoin’s evolution into what it is today.
Bitcoin has undoubtedly changed how people perceive money. But how did this virtual currency grow into big money? Bitcoin rose from a humble beginning in 2008 until its peak in 2021. This digital currency has taken the world, especially investors, on a rough ride. In slightly over a decade, Bitcoin has crashed, spiked, fallen, and repeatedly rallied, hitting an all-time high price of over $65,000 at some point.
And this captured many people’s attention that wanted to learn more about this decentralized, peer-to-peer, digital exchange system. In simple terms, people can transfer value or funds directly without an intermediary or a bank. Satoshi Nakamoto, a person or group, created Bitcoin so that people can stop depending on financial institutions or governments to complete financial transactions. This virtual currency enables users to transfer and receive funds on the blockchain, which depends on a proof-of-work method to verify and track transactions.
Currently, Bitcoin is a popular form of digital cash. Many people purchase it on crypto exchanges like Yuan Pay Group using fiat money. After that, they can use it to transact locally and online. Alternatively, they can hold their tokens in crypto wallets as a long-term investment waiting for their value to increase.
Having grown in popularity and value, some people argue that Bitcoin will eventually replace fiat money. Although it’s not perfect, some investors believe that Bitcoin is going far, especially after analyzing the challenges it has overcome so far.
The Starting Point
Bitcoin started from the turmoil of the great recession in 2008. Satoshi Nakamoto and many others believed that governments and financial institutions had a role in this crisis. The distrust of the financial system and banks among the masses had grown over the years. Therefore, Satoshi published a white paper addressing centralized control of fiat money and the trust financial institutions required to handle the public cash.
Third parties can meddle with or reverse transactions with the conventional financial systems. Also, these institutions can charge hefty costs or delay transactions. Therefore, Satoshi introduced a cashless payment method, Bitcoin, which employs cryptography to maintain the network’s integrity instead of financial institutions or third parties.
On 3rd Jan 2009, Satoshi launched the Bitcoin blockchain by mining the first block. One week later, Satoshi completed the first transaction. Initially, miners could quickly validate the Bitcoin blockchain, and this cryptocurrency didn’t have an actual monetary value.
Over a year later, a man in Florida bought two Pizzas worth $25, paying 10,000BTC. Essentially, this transaction established that Bitcoin had real-world use by confirming its value. Fast-forward, that amount of BTC could be more valuable considering the current price of this cryptocurrency.
Bitcoin’s underlying technology is partially the reason for its growth into big money. Blockchain eliminates intermediaries that increase transaction time and costs. Therefore, more people turn to Bitcoin to minimize costs and time, especially for cross-border transactions. Bitcoin transactions are faster and more affordable than traditional payment methods.
Another reason for Bitcoin’s growth into big money is the endorsement by influential individuals. For instance, when Elon Musk announced his support for Bitcoin, its price increased significantly. Also, its popularity and value increased when large companies like MicroStrategy and PayPal started allowing customers to use Bitcoin on their platforms.
The move by countries like El Salvador to make Bitcoin a legal tender has also catapulted Bitcoin higher. Today, more merchants accept Bitcoin payments at their local and online stores. All these factors have contributed to Bitcoin’s growth into big money.
Bitcoin is, so far, the largest cryptocurrency. While nobody can undoubtedly tell what’s in store for Bitcoin, this digital currency is doing pretty well. It’s an investment vehicle and a payment method with a growing user base.