The culmination of prior efforts and research dating back to 1982 by cryptographers, the National Security Agency, and renowned computer scientists, Bitcoin was the first decentralised cryptocurrency and blockchain.
The paper describing the technology and the real world problems it solves was published on 31 October 2008 and the genesis block was created on 3 January 2009. The ideological
roots of such decentralised money are traced back to the Austrian school of economics.
After proof of concept use mostly by developers, black markets became major users until the Bitcoin Foundation was created in 2012 to promote mainstream use and further development.
Although a great number of blockchain protocols have been launched since, and many of these are technologically superior, bitcoin has remained the preeminent cryptocurrency as the crypto market matures and is embraced by institutional investors and regulators.
TECHNOLOGY
The ledger is maintained, and the network is secured through a “proof of work” algorithm where the validators (“miners”) commit computational power to the network.
Various upgrades have been targeting bitcoin’s scalability limitations, such as SegWit (2017) the Taproot upgrade (2021) or the Lightning Network (a second layer routing network in use since 2019) to reduce the burden on the protocol. Bitcoin’s scalability nevertheless remains an issue.
Another challenge is the energy inefficiency of the bitcoin network, which has come into focus with the increased adoption of cryptocurrencies.
KEY PEOPLE
The identity of the person or team behind the original whitepaper has never been revealed.
The pseudonym Satoshi Nakamoto (which means “central origin” or “central intelligence” in Japanese) was used. “Satoshi” disappeared in 2010, and handed the stewardship over the code to Gavin Andresen who delegated the role to Wladimir van der Laan in 2014. The latter stepped back in January, wishing to see the project’s development more decentralised.
A long running saga of Craig Wright’s claim of being Satoshi Nakamoto remains unresolved.
Some supporters of bitcoin hold the view that bitcoin is the only cryptocurrency that will survive in the long run. Jimmy Song and Stephan Livera are two notable “Bitcoin maximalists”.
ECOSYSTEM
In the wake of the 2008 financial crisis, Bitcoin was embraced by many as a fundamentally superior alternative to central banking and fiat currencies. Its store of value properties have been favourably compared to gold, and Bitcoin has been steadily gaining market share as a safe haven asset and as a medium of exchange used in transactions. Bitcoin has also been favoured as one of the main currencies to subscribe to ICOs/IEOs, and to lock in DeFi contracts.
Bitcoin has been the primary beneficiary of the increasing mainstream acceptance of cryptocurrencies. Corporate treasuries started embracing bitcoin as a macro hedge and a superior store of value currency. Payment systems such as Visa, Mastercard, Paypal started offering payments in bitcoin. Bitcoin was made legal tender in El Salvador, with indications that other countries might follow suit.
Although the 2021 upgrade improved the bitcoin network’s ability to handle smart contracts, its offering remains far from the smart contract capabilities that many other protocols offer, and bitcoin is used only in a very limited way as a foundational layer for applications.
SUPPLY MODEL/TOKENOMICS
The maximum supply is hardcoded into the code. At most, there will be 21 million Bitcoins in issue. This maximum supply is forecast to be reached around year 2040.
New supply of Bitcoin is released to the validators (miners) as an additional reward for their efforts on top of the transaction fees paid by users of the network.
This reward is halved roughly every four years (every 210,000 blocks).
It is estimated that around 4 million bitcoin are permanently lost as they appear to be stranded in disused digital wallets, including over a million bitcoin originally mined by “Satoshi” that have not been moved since 2010.
KEY VALUE DRIVERS
Currently bitcoin’s value is primarily driven by the market share it takes from other safe haven assets such as gold and from fiat currencies.
The resolution of bitcoin’s scalability issues is still a work in progress – and the fast growth in adoption makes it imperative that satisfactory solutions are found.
Bitcoin’s energy inefficiency is an important concern, especially as there is no indication of the bitcoin network considering an upgrade that would address this issue.
It is possible that another cryptocurrency might ultimately be viewed as superior and take bitcoin’s place as the preeminent crypto asset.
KEY METRICS
Market Cap
USD 7.94 billion
Price
USD 41,937
All time high price
USD 68,798.63
Total issued tokens
21 million
Circulating supply
18.93 million
Liquid supply
18.93 million
2050 supply
20.99 million
Updated on 10. January 2022
Price & market capitalisation
Total transaction volume
Active addresses
Volatility
Different moving averages
RSI
About Sygnum
Sygnum is the world’s first digital asset bank, and a digital asset specialist with global reach.
With Sygnum Bank AG’s Swiss banking licence, as well as Sygnum Pte Ltd’s capital markets services (CMS) licence in Singapore, Sygnum empowers institutional and private qualified iSygnum is the world’s first digital asset bank, and a digital asset specialist with global reach.
With Sygnum Bank AG’s Swiss banking licence, as well as Sygnum Pte Ltd’s capital markets services (CMS) licence in Singapore, Sygnum empowers institutional and private qualified investors, corporates, banks, and other financial institutions to invest in the digital asset economy with complete trust. Sygnum operates an independently controlled, scalable, and future-proof regulated banking platform. Our interdisciplinary team of banking, investment, and Distributed Ledger Technology (DLT) experts is shaping the development of a trusted digital asset ecosystem. The company is founded on Swiss and Singapore heritage, and operates globally.
Disclaimer
This document was prepared by Sygnum Bank AG. This document may contain forward looking statements and may be subject to change. The opinions expressed herein are those of Sygnum Bank AG, its affiliates, and partners at the time of writing. The document is for informational purposes only and contains general material. It is for use by the recipient only. It does not constitute any advice or recommendation, an offer or invitation by or on behalf of Sygnum Bank AG to purchase or sell assets or securities. It is not intended to be used as a general guide to investing, and should be used for informational purposes only. When making an investment decision, you should either conduct your own research and analysis or seek advice from an expert to make a calculated decision. The information and analyses contained in this document have been compiled from sources believed to be reliable. However, Sygnum Bank AG makes no representation as to its reliability or completeness and disclaims all liability for losses arising from the use of this information.