The first and possibly most popular decentralized digital currency is named Bitcoin. Through a peer-to-peer (P2P) network that is supported by the underlying blockchain system, users can make or receive payments in bitcoin. 1 It was conceived by Satoshi Nakamoto, whose identity is still unknown, in the form of a whitepaper in October 2008. The creation of the Bitcoin network and subsequent growth of the digital currency ecosystem with the emergence of other digital assets were both triggered by Nakamoto’s first transaction of 10 bitcoins in January 2009.
At its conception, Bitcoin was designed to solve a number of issues brought on by dealing with financial intermediaries, such as exorbitant fees, protracted processing delays, and the inevitable occurrence of fraudulent transactions. Consensus, openness, and immutability were its guiding principles when it was created, and its rising popularity as a means of payment reflects shifting views on conventional forms of payment and established financial institutions (e.g., central governments and commercial banks).
When Bitcoin was first created, it was intended to address a variety of problems associated with using financial intermediaries, including as high transaction costs, lengthy processing times, and the unavoidable incidence of fraudulent transactions. It was developed with consensus, openness, and immutability as its guiding principles, and its growing acceptance as a form of payment reflects changing perspectives on traditional payment methods and well-established financial institutions (e.g., central governments and commercial banks).
1 When referring to the network, blockchain protocol, or asset class, we will use Bitcoin, with an uppercase “B”. When referring to the currency denomination, we will use bitcoin(s), with a lowercase ‘b’.
2 For more, please refer to the full Bitcoin & the Rise of Digital Gold report.
3 For more, please refer to the full Hedging Global Liquidity Risk with Bitcoin report.