Bitcoin, the History.

• What is Bitcoin?

 

Bitcoin is a decentralized digital currency that was invented in 2008 by an unknown person or group of people using the name Satoshi Nakamoto. The invention of Bitcoin was a significant development in the world of finance, as it introduced a new way of conducting transactions that was not controlled by any central authority.

 

Here is a timeline of the significant events and people in the growth of Bitcoin:

 

2008: Bitcoin Whitepaper is published - In October 2008, an individual or group using the pseudonym Satoshi Nakamoto published a whitepaper titled "Bitcoin: A Peer-to-Peer Electronic Cash System." This whitepaper outlined the basic concept of a decentralized digital currency, which came to be known as Bitcoin.

 

2009: Bitcoin is launched - In January 2009, the first version of the Bitcoin software is released, and the first Bitcoins are generated. The initial users were mainly cryptography enthusiasts, and the currency had no real value at the time.

 

2010: First Bitcoin exchange is launched - In March 2010, the first Bitcoin exchange, called BitcoinMarket.com, was launched. It allowed users to buy and sell Bitcoins using various currencies, such as USD, EUR, and GBP.

 

2011: Bitcoin reaches parity with the US dollar - In February 2011, the price of one Bitcoin reached parity with the US dollar for the first time, meaning that one Bitcoin was worth one US dollar.

 

2012: Halving of Bitcoin mining reward - In November 2012, the first "halving" event occurred, which reduced the Bitcoin mining reward from 50 BTC to 25 BTC. This event occurs approximately every four years and is programmed into the Bitcoin software.

 

2013: Bitcoin price surges - In December 2013, the price of Bitcoin surged to over $1,000 for the first time, driven by increased media attention and adoption by merchants and businesses.

 

2014: Mt. Gox exchange collapse - In February 2014, the Mt. Gox Bitcoin exchange, which at the time was the largest Bitcoin exchange, filed for bankruptcy protection after losing 850,000 Bitcoins, worth over $450 million at the time.

 

2015: Bitcoin Foundation struggles - In 2015, the Bitcoin Foundation, a non-profit organization that was founded to promote the development and adoption of Bitcoin, struggled with financial issues and internal conflicts.

 

2016: Halving of Bitcoin mining reward - In July 2016, the second "halving" event occurred, reducing the Bitcoin mining reward from 25 BTC to 12.5 BTC.

 

2017: Bitcoin reaches all-time high - In December 2017, the price of Bitcoin reached an all-time high of nearly $20,000, driven by a surge in media attention and adoption by mainstream investors.

 

2018: Cryptocurrency market crash - In January 2018, the cryptocurrency market, including Bitcoin, experienced a significant crash, with prices dropping by more than 50% in some cases.

 

2019: Growing institutional adoption - In 2019, there was growing adoption of Bitcoin and other cryptocurrencies by institutional investors, such as hedge funds and asset managers.

 

2020: Bitcoin halving and pandemic-driven market volatility - In May 2020, the third "halving" event occurred, reducing the Bitcoin mining reward from 12.5 BTC to 6.25 BTC. The COVID-19 pandemic also drove significant market volatility, which affected the price of Bitcoin and other cryptocurrencies.

 

2021: Bitcoin adoption by major companies - In 2021, there was a significant adoption of Bitcoin by major companies, such as Tesla, MicroStrategy, and Square. The price of Bitcoin also reached new all-time highs, surpassing $60,000 in March 2021.

 

• How the Government React about Bitcoin.

 

Bitcoin's position and opinion by different governments have evolved over time, and there have been varying views regarding its use and regulation. Here is a timeline of the position and opinion of the US, EU, China, Russia, and Korea governments, along with political party members and who agrees and disagrees:

 

US Government:

 

2009: The US government initially saw Bitcoin as a novel concept that could potentially promote financial innovation and privacy, but also as a potential tool for illicit activities such as money laundering.

2013: The US Financial Crimes Enforcement Network (FinCEN) issued guidance stating that virtual currencies, including Bitcoin, should be subject to existing anti-money laundering (AML) regulations. This was followed by the US Senate holding its first-ever hearing on virtual currencies.

2014: The Internal Revenue Service (IRS) issued guidance stating that virtual currencies should be treated as property for tax purposes, subjecting them to capital gains tax.

2017: The Securities and Exchange Commission (SEC) rejected a Bitcoin exchange-traded fund (ETF) proposed by the Winklevoss twins, citing concerns over market manipulation and investor protection.

2021: The Biden administration proposed a requirement for cryptocurrency transactions worth more than $10,000 to be reported to the IRS, as part of its efforts to crack down on tax evasion. There have also been calls for increased regulation of the cryptocurrency industry, particularly with regard to investor protection and AML regulations.

Political party members and who agrees and disagrees:

 

Democrats generally support increased regulation of the cryptocurrency industry, particularly with regard to consumer protection and AML regulations.

Republicans generally have a more hands-off approach to regulation and are more supportive of the cryptocurrency industry's potential for innovation and growth.

 

EU Government:

 

2012: The European Central Bank (ECB) issued a report on virtual currencies, which stated that they did not pose a threat to the stability of the eurozone's financial system.

2016: The European Parliament adopted a resolution calling for the regulation of virtual currencies and the establishment of a task force to study their potential impact on AML and terrorist financing.

2018: The European Securities and Markets Authority (ESMA) issued a warning to investors regarding the risks of virtual currencies and initial coin offerings (ICOs).

2020: The European Commission proposed a comprehensive regulatory framework for cryptocurrencies, including the requirement for issuers of cryptocurrencies to be authorized by a regulatory authority.

Political party members and who agrees and disagrees:

 

The views of political parties in the EU vary, with some calling for increased regulation and others advocating for a more hands-off approach.

Some member states, such as Germany and France, have been more proactive in regulating the cryptocurrency industry.

China Government:

 

2013: The People's Bank of China (PBOC) issued a notice warning financial institutions against using Bitcoin and other virtual currencies, citing concerns over financial stability and money laundering.

2017: Chinese authorities ordered the closure of domestic cryptocurrency exchanges and banned initial coin offerings (ICOs), citing concerns over financial stability and fraud.

2021: The Chinese government continued to crack down on the cryptocurrency industry, with the PBOC urging banks to cut off cryptocurrency-related activities and mining.

Political party members and who agrees and disagrees:

 

The Chinese government is a one-party system, and there is no significant political opposition to its policies regarding the cryptocurrency industry.

 

Russia:

 

2014: The Russian Central Bank issued a warning against the use of virtual currencies, stating that they could be used for illicit purposes and could threaten the stability of the financial system.

2015: The Russian Ministry of Finance proposed legislation that would ban the issuance and circulation of cryptocurrencies, with violators facing imprisonment or fines. However, the proposal did not gain traction.

2018: The Russian government passed a law regulating cryptocurrencies and initial coin offerings (ICOs), which requires issuers to be authorized by the Russian central bank and subjects them to AML regulations.

2021: The Russian government continued to crack down on the use of cryptocurrencies, with the Ministry of Finance proposing legislation that would limit the amount of cryptocurrency that individuals and companies could hold.

Political party members and who agrees and disagrees:

 

The United Russia party, which is the dominant political party in Russia, generally supports the government's stance on cryptocurrencies and the need for increased regulation.

Some opposition parties, such as the Communist Party and the Liberal Democratic Party, have criticized the government's stance on cryptocurrencies and called for more lenient regulations.

 

Korea:

 

2013: The Korean government initially took a hands-off approach to the use of cryptocurrencies, viewing them as a speculative investment with little impact on the broader economy.

2017: The Korean government began to crack down on the use of cryptocurrencies, with the Financial Services Commission (FSC) announcing a ban on initial coin offerings (ICOs) and requiring exchanges to conduct AML and customer identification procedures.

2018: The Korean government passed legislation recognizing cryptocurrencies as assets, subjecting them to capital gains tax and allowing exchanges to operate under certain conditions.

2021: The Korean government proposed legislation that would require cryptocurrency exchanges to register with the Financial Intelligence Unit (FIU) and conduct real-name verification of users.

Political party members and who agrees and disagrees:

 

The ruling Democratic Party generally supports increased regulation of the cryptocurrency industry, particularly with regard to AML regulations and consumer protection.

The main opposition party, the People Power Party, has taken a more ambiguous stance, with some members calling for increased regulation and others advocating for a more hands-off approach.

Some smaller opposition parties have been more critical of the government's stance on cryptocurrencies and called for greater freedom in their use.

 

 

• What the Inventor of Bitcoin's Idea about the Use and Influence of Bitcoin?  

 

The Bitcoin white paper, also known as the Bitcoin white book, was written by Satoshi Nakamoto, the pseudonymous creator of Bitcoin. There is no "Sakamoto" associated with the Bitcoin white paper. However, I can explain the rules and characteristics of Bitcoin as described in the white paper by Satoshi Nakamoto.

 

Decentralization: Bitcoin is a decentralized digital currency, which means that there is no central authority controlling its supply or operation. Instead, the Bitcoin network is maintained by a network of users, known as nodes, who validate and record transactions on a shared ledger called the blockchain.

 

Limited supply: The total supply of bitcoins that will ever exist is fixed at 21 million. This is achieved through a process called mining, where users compete to solve complex mathematical problems in order to add new blocks to the blockchain and receive a reward in the form of newly created bitcoins. The mining reward is halved approximately every four years, and it is expected that all 21 million bitcoins will be mined by the year 2140.

 

Pseudonymity: Bitcoin transactions are not tied to the real-world identities of users, but rather to Bitcoin addresses, which are unique identifiers associated with a user's Bitcoin wallet. While transactions on the Bitcoin network are public and visible on the blockchain, users can choose to use pseudonyms or generate new Bitcoin addresses for each transaction in order to maintain a degree of privacy.

 

Security: The security of the Bitcoin network is maintained through a combination of cryptography, proof-of-work mining, and consensus rules that ensure the validity of transactions and blocks on the blockchain. Transactions on the Bitcoin network are irreversible once they are confirmed, which typically takes 10 minutes for each block added to the blockchain.

 

Open source: The Bitcoin software is open source, which means that anyone can view and contribute to its codebase. This transparency allows for greater scrutiny and improvement of the software, as well as the development of alternative implementations and applications built on top of the Bitcoin protocol.

  

 

• Bitcoin's Relationship with other Economic Barometer.

 

The relationship between Bitcoin and various economic indicators such as interest rates, exchange rates, real estate prices, and economic cycles is complex and multifaceted. Here is an overview of how these factors may impact Bitcoin:

 

Basis interest rate: The basis interest rate is the interest rate that central banks charge other banks for borrowing money. In general, higher interest rates can lead to a stronger currency, as investors are attracted by the higher return on investment. However, since Bitcoin is not tied to any particular central bank or government, it is not directly impacted by changes in the basis interest rate.

 

Dollar exchange rate: The exchange rate between the US dollar and Bitcoin can have an impact on the price of Bitcoin, as many investors use the dollar as a benchmark for their investments. A stronger dollar can lead to a lower demand for Bitcoin, while a weaker dollar can increase demand. Additionally, the use of Bitcoin as an alternative currency to the US dollar can impact the dollar exchange rate, as increased adoption of Bitcoin may reduce demand for dollars.

 

Real estate prices: Real estate prices can impact the demand for Bitcoin, as some investors may view Bitcoin as a more stable or secure investment compared to real estate. In times of economic uncertainty, for example, some investors may shift their investments from real estate to Bitcoin, which can lead to an increase in the price of Bitcoin.

 

Economic ups and downs: Economic cycles can have an impact on the demand for Bitcoin, as investors may view it as a hedge against economic downturns or inflation. During times of economic uncertainty or market volatility, for example, some investors may shift their investments to Bitcoin, which can lead to an increase in its price. However, it is worth noting that Bitcoin has also experienced significant volatility throughout its history, which can make it a risky investment for some investors.