Bitcoin (BTC) cryptocurrency price history. Constant fluctuations.

The rapid liberalization of the spheres of life is gradually destroying the traditional monopolistic form of finance turnover. The impetus to launch the current process was the emergence of digital money, in particular, cryptocurrency. The most popular variation of the latter is Bitcoin (BTC), which sets trends for most other electronic coins such as Ethereum, Ripple, Bitcoin Cash, Litecoin, etc.

Bitcoin payment system

Bitcoin (transliteration "Bitcoin") is a system developed by means of Blockchain technology, using a virtual monetary equivalent, in fact, a cryptographic BTC currency.

Bitcoin does not exist physically, it is not tied to banks or the economy of any state, and its cost depends entirely on the demand and popularity in the electronic money market.

Blockchain platform

Blockchain technology is a chain of blocks, changes to which are made exclusively at the end of the algorithm. Each change includes a set of successive transactions. So, if someone makes a payment for BTC, then this movement of electronic money appears in the "tail" of the chain, and information about the movement is recorded in the blocks themselves.

Bitcoin Blockchain is available to users from all over the world who have the ability to access the Internet. Miners play an important role in the functioning of all systems - people who create cryptocurrency using Blockchain technology. They are responsible for:

• detecting transaction requests;
• combining data into a chain;
• checking transmission paths;
• creating blocks.

Validation determines whether the subject owns the digital currency after transferring it, whether he spent it after receiving it.

Bitcoin ownership in the Blockchain is reported by two main elements:

• public key;
• private key (only for the owner).

Both are needed to encrypt e-mails during transfers and to sign transaction data.

By adding a new block, the miner undertakes to provide cryptographic confirmation of the operation. To do this, he must "lead" the block through several stages of the hash function. The latter is a concrete calculation that takes a piece of data of different sizes and translates it into a string with a specific length, consisting of a set of letters and numbers.

The reliability of this algorithm is provided due to the fact that the hash starts with several zeros, the number of which changes with each transaction. This is how blocks are created.

After programming the elements of the chain by one miner, they are checked by other participants in the process and sequentially added to the general structure of the Blockchain. The cryptocurrency platform itself performs three functions:

• registers transactions between actors;
• enters into contracts for transactions;
• confirms the identity of the user at the identification stage.

Simply put, the Blockchain platform for a digital coin is like a kind of bank for real money.

Since the creation of Blockchain in 2008, some researchers have been looking for ways to apply it, not only in the field of finance, but also in other areas that require fast and private data transfer. For example, today the technology is actively used for online voting, signing contracts, providing notary services, etc. The most popular Blockchain platforms are: 

• Ethereum;
• BigChainDB;
• Hyperledger Fabric;
• Hyperledger Cello;
• Hyperledger Sawtooth Lake;
• Hydrachain;
• Corda;
• Multichain;
• Openchain;
• Chain Core.

The main principles of BTC

1. Decentralization. All major payment systems have cards and users of different levels: Gold, Vip, Platinum or Webmoney, QIWI, respectively. They also have restrictions on the transfer and withdrawal of funds. But Bitcoin, unlike the latter, does not depend on external factors, since it is not tied to the locality, securities, and private entities. That is, this cryptocurrency does not have a "center" and is dispersed on the market through its demand for a particular person, company, corporation.
2. Confidentiality. When transferring Bitcoin, no personal data is required. The only information that needs to be entered is the address of an electronic wallet in the form of a hash, consisting of a combination of 27-34 digits and Latin letters. This makes it possible to avoid tracking funds by various government agencies, in particular the tax authorities.
3. Transparency. This principle ensures Blockchain, that is, the preservation of the history of transactions. Every owner of a Bitcoin wallet will be able to check and track their transfers, but thats not all. Other network users will also be able to view in what amounts, when and where a persons funds are being transferred. At the same time, no one will know who the owner of the latter is, since the previous principle applies.
4. Irreversibility. A feature of Blockchain technology is also that if a certain amount of Bitcoins has been transferred, then it is impossible to cancel, delete, return or block the transaction. Therefore, you should be careful when using a cryptocurrency wallet in order to avoid incidents.
5. Safety. The account on which the users funds are located is 100% secure due to the fact that it cannot be hacked. Unlike standard banking systems, data cannot be intercepted in Bitcoin while money is being transferred, because it is encrypted using a cryptographic method. If the user does not independently "share" the wallet file with the password (phishing), then no outsider will gain access to it.
6. Peer-to-Peer (P2P). It is envisaged that third parties do not participate in transactions: banks or servers. A payment transfer is carried out exclusively between two participants in the process: the donor and the recipient.

Prerequisites for the emergence of Bitcoin

Until the moment Bitcoin first appeared on the world market, scientists from different countries have been working on methods of cryptographic encryption and data transfer for forty years.

Back in 1998, Japanese researcher Wei Dai described cryptocurrency technology through e-mail, communicating with his colleagues. But at that time, it was impossible to implement the project due to the lack of the necessary power from the computer equipment.

In 1999, American cyberpunk science fiction writer Neil Stevenson published a novel called Cryptonomicon, in which he combined several storylines into a single hypertext and described the benefits of electronic money.

The work has inspired many followers of the "kryptonite" to be active. In particular, some sources report that the famous Bitcoin founder, Satoshi Nakamoto, is an ardent admirer of Stevensons work.

Scientist Nick Szabo tried to create a cryptocurrency in 2005. It was envisaged that it will be called Bitgold and will have the following advantages:

• impossibility of counterfeiting;
• protection against theft;
• not subject to inflationary processes.

It was not possible to bring the idea to life in full. But three years later, leading researchers launched a project that was destined to acquire a global character and worldwide fame.

The history of the development of the Bitcoin cryptocurrency

The process of creating, selling and distributing the first BTC cryptocurrency can be divided into several sequential stages: the beginning, the first purchase for Bitcoins, active rate jumps and rapid growth.

2008-th year

The history of BTC began on October 31, 2008. An unknown person published a document on the network "Bitcoin P2P e-cash paper" with a detailed description of the cryptocurrency and its operation. It was Satoshi Nakamoto. 

Due to the fact that to this day it was not possible to determine the identity of the author of the project, since Satoshi Nakamoto is a pseudonym, many theories about the creator of Bitcoin have spread on the Internet. Most researchers on this topic believe that a whole group of Englishmen or Americans is hiding under the Japanese nickname, because the document was written in native-level English.

The bitcoin.org domain was also registered a little earlier than the sensational publication. It hosts the official website of Bitcoin, which only confirms the latest theory, since one person would not be able to calculate in detail each step of the project being created.

2009th year

The beginning of the next year bore the first fruits. On January 3rd, a small block of 50 BTC cryptocurrency was generated, which gave impetus to the development of mining.

The latter is the process of creating electronic coins. It is characterized by the obligatory presence of advanced computing technology, which requires a significant consumption of electricity.

At the initial stages of the development of cryptocurrency, any active network user with all the necessary equipment could be engaged in programming it. But with the increase in the number of coins, it became impossible to mine them using a PC, albeit with a high power.

The first transaction of funds using cryptography was carried out by Satoshi Nakamoto himself, transferring them on January 12 in the amount of 170 BTC to a certain Hall Finney. But due to the fact that information about the existence of Bitcoin was not available to wide circles of the population, its turnover at that time was zero, and the rate by the end of 2009 was from 800 to 1600 BTC per dollar.

2010th year

At the beginning of 2010, a significant event for the development of cryptocurrency took place - the first purchase for Bitcoins. The user decided to order a pizza for himself and paid for it by transferring 10,000 BTC to the pizzerias account , which at that time corresponded to $ 25. 

After some time, the first currency exchange service was opened, which allows you to buy dollars for Bitcoins. Because of this, there was a sharp jump in the rate, and 10,000 cryptocurrencies received by the pizzeria became equal to 600 dollars. 

In July of the same year, Jed McCaleb founded the first and largest Bitcoin exchange to date - MtGox (https://www.mtgox.com). Since then, exchanging an electronic coin for real currency has become commonplace. The liquidity of Bitcoin was attested, and users had the opportunity to make money on it.

2011-th year

This period of time is characterized by an increase in the number of hacker attacks around the world. Statistical data showed that 75% of hacks were from well-known firms, while they were of a financial nature. For this reason, there were sharp and numerous jumps in the Bitcoin rate.

The lack of material foundations and stability led to the fact that one day BTC could cost $ 31, and a couple of hours later - 1. So, on February 9, 2011, the cryptocurrency for the first time in its entire history became equal to the dollar. 

In June, about 60,000 MtGox users joined the ranks of those affected by hackers. Passwords, addresses and funds from their personal accounts were stolen from them, and fake electronic coins were sent to some. Due to the incident, the bitcoin exchange was closed for a week to recover.

The event entailed another decline in the rate, but it was not without a positive moment. The situation around MtGox stimulated the public to hold the first conference on Bitcoin. It took place on November 25 in Prague. The future development of cryptocurrency and the possibility of bringing it to the mass level were discussed.

2012th year

Attracting a large number of users took Bitcoin to a completely new stage of development. The first community to support cryptocurrency was created - the Bitcoin Foundation. It paid off. The end of 2012 was marked by the rapid growth of the Bitcoin exchange rate.

The challenge for the reputation of the cryptocurrency was the delays of criminals and individuals using Bitcoin for criminal purposes. For example, major scandals around electronic money arose after the arrest of an organization that collected funds in BTC for the murder of politicians, as well as after the arrest of a large drug dealer distributing goods for payment in Bitcoin.

But practicality conquered all adversity. The objective benefits of using this payment system ensured it unprecedented popularity among financial and industrial groups, large and medium-sized businesses. In 2013, an active inflow of investments began to open new mining centers. The course has acquired relative stability.

BTC exchange rate changes from 2009 to 2013

Data obtained from the New Liberty Standard and MtGox exchanges have witnessed indicators of rate fluctuations throughout the historical development of Bitcoin.

 

date	Dollar	Bitcoin
2009	1	1309.03
12 July 2010	0.08	1
November 6, 2010	0.50	1
9 February 2011	1	1
18 March 2011	0.70	1
June 2, 2011	ten	1
June 8, 2011	31.91	1
12 June 2011	ten	1
June 19, 2011	0.1	1
22 February 2013	thirty	1
22 March 2013	74.90	1
April 1, 2013	one hundred	1
April 10, 2013	266	1
November 28, 2013	1,000	1

 

Thus, the most frequent rate fluctuations occur in June 2011. During the same period, the lowest value of BTC was observed in the entire history of its existence. The indicators are associated with hacker attacks and hacking MtGox. After these events, there was a long stagnation in 2012, but 2013 was marked by a rapid rise in the currency.

State of the art

The active phase of Bitcoin began after its legalization and recognition as a full-fledged payment system in certain countries of the world. Bloomberg Financial Information Center says that today e-currency is used to buy bonds with negative yields, as well as shares of large companies and corporations. BTC coins appear in transactions between transnational actors of the world economy, political actors and individuals.

In addition to transactions at a high level, Bitcoin is also used in everyday life. You can pay with cryptocurrency:

• travel (air tickets, hotel, insurance);
• fitness clubs, saunas, swimming pools;
• restaurants, cafes, bars;
• goods in online stores.

Bitcoin is designed not only for large financial transactions, but also for the service sector.

In 2014, the documentary film "The Rise and Rise of Bitcoin" was released, after which the common people became aware of the payment system.

The popularization and growing demand for the coin provoked the emergence of other cryptocurrencies, for example, the "little brother" - Bitcoin Cash. Today, every structure with influence is trying to acquire its own electronic bill.

Thus, Pavel Durov, the creator of the Telegram messenger, plans to launch his Blockchain platform based on an application with subsequent monetization. The project is called "TON" - Telegram Open Network, and, if necessary investments are attracted, in the long term, it provides for the ousting of Etherium from the electronic financial market.

Despite the proliferation of other types of electronic currencies, Bitcoin remains dominant over everyone, influencing their rate. For this reason, netizens often refer to Bitcoin as the "grandfather", thereby indicating its primacy.

Also, thanks to Bitcoin, such a trend as trading has acquired a new sound. Trading BTC coins on cryptocurrency exchanges today brings significant profit to traders who make money on changes in the exchange rate of the currency. Those who were lucky enough to acquire Bitcoin during the period when its value was equal to the value of the dollar received several hundred thousand literally out of nothing in 3-4 years. And since the coin rate continues to grow rapidly, bitcoin exchanges do not lose their relevance.

BTC exchange rate changes from 2014 to 2019

In 2014, Bitcoin moved very confidently, but continued to change from period to period, as evidenced by the data of the cryptocurrency capitalization service CoinMarketCap.

 

date	Dollar	Bitcoin
January 7, 2014	960	1
December 18, 2014	194.88	1
December 31, 2014	310.74	1
January 14, 2015	184.32	1
November 4, 2015	492.91	1
November 11, 2015	320	1
December 31, 2015	426.62	1
May 30, 2016	450	1
20 June 2016	762.15	1
28 december 2016	967.47	1
1 January 2017	963.66	1
May 21, 2017	2,079.01	1
5 August 2017	3,154.67	1
14 Aug 2017	4,164.20	1
12 october 2017	5 186.90	1
21 October 2017	6 131.82	1
November 2, 2017	7,193.69	1
20 november 2017	8 165.46	1
November 26, 2017	9,037.60	1
28 november 2017	10,023.90	1
2 December 2017	11,051.90	1
December 6, 2017	13,044	1
December 7, 2017	15,823.20	1
17 december 2017	19,758.20	1
31 december 2017	12,952.20	1
Jan 7, 2018	17 527.30	1
December 30, 2018	3,865.95	1
May 25, 2019	7 944.35	1
July 5, 2019	8,000	1

 

The decline at the turn of 2017-2018 and the sharp decline in the BTC rate in 2018, according to financial analysts, is associated with the "overheating" of the currency. This happens after too active growth in the value of the coin, but the case is not critical, since after a while the rate begins to rise again. The latter is confirmed by the indicators from 2019 indicated in the table.

There is also an opinion that the situation in the above-mentioned period of time was influenced by a set of reasons operating around the currency:

• the imperfection of Bitcoin in a technical sense;
• charges of financing terrorism and criminal gangs;
• violation of the principle of confidentiality;
• hacker attacks;
• market manipulations;
• criticism of the founders;
• the appearance of branches (Altcoin).

Bitcoin price is now $ 10,123.21. For more information on prices for buying and selling cryptocurrency in real time, visit coinmarketcap.com.

 

Reasons for Bitcoin exchange rate fluctuations

Bitcoin is a relatively young and high-tech payment system, so its monetization is largely demand-driven. The latter is formed in the financial market based on objective and subjective factors. The influence can be exerted both by the objective existence of exchangers and the preservation of the privacy policy, and by the subjective distrust of the population in electronic money.

The above aspects directly affect the value of the cryptocurrency, but there are more specific reasons for the sharp changes in the rate:

• confession;
• market size;
• speculation;
• lack of regulation.

In this regard, the opinion of the head of the well-known payment company Circle Jeremy Aller is indicative, who in his interview for CNBC said that recently users of electronic coins began to fix their profits. The process is typical for cases when the rise in prices exceeds 200% in 9 months. Despite significant fluctuations in the rate, according to Aller, Bitcoin remains "digital gold", and its main value is the ability to independently regulate cryptographic transits.

Based on the latter, it is worth noting that it is the personal control over the BTC wallet that provides attractiveness, and hence the demand for electronic money, regardless of volatility. Therefore, Bitcoin is a profitable investment, especially in the long term.

Bitcoin and the state

Despite the popularity of cryptocurrency, the story of its acceptance by the global society remains unfinished. The attitude towards Bitcoin is still ambiguous. Today, three characteristics can be distinguished for ranking the moods of different countries towards digital money: positive, neutral, negative.

The following entities recognize a digital coin, allow transactions, mining, buying and selling:

• USA;
• Canada;
• Australia;
• EU.

The ban on the use of Bitcoin exists in:

• Iceland;
• Bolivia;
• Vietnam;
• Kyrgyzstan;
• Ecuador;
• Indonesia.

The rest of the states either took a neutral position or are still developing bills to legalize BTC, such as the Russian Federation.

Why do certain countries prohibit or delay bitcoin transactions? The main answer to this question lies in the inability of the state apparatus and the government to control financial flows. But everything is not conditioned only by a selfish goal aimed at replenishing the budget with tax collections. The theme of security, both national and global, is also involved here.

Due to the decentralization of Bitcoin, the state has problems like:

• impossibility of freezing accounts;
• resource costs for adaptation;
• development of the shadow economy;
• carrying out illegal operations.

The latter is associated with the financing of terrorism, the sale of weapons and drugs using electronic coins. This makes Bitcoin a security threat, but the problem is solvable. For example, today in the United States there are several special committees of the state level, trying to take control of the financial activities of representatives of criminals. Also in the United States, regulations have been developed that determine the legal status of Bitcoin.

BTC on Wall Street

Wall Street financial giants have been actively exploring the stock market from Bitcoin relatively recently. What was the reason for the long-term ignorance of the electronic coin on their part?

Overcoming the consequences of the 2008 economic crisis for the financial center of the world took too much time and resources. A decade of restoring an effective system of business functioning eliminated the possibility of risks that the unstable exchange rate of an electronic coin assumed, despite the fact that initially BTC was positioned as “insurance” against another collapse in prices due to its independence from banking and government structures.

In May 2018, Goldman Sachs announced that it was opening a Bitcoin trading desk, but in August, due to a sharp drop in the exchange rate, it refused to sell for virtual money.

The lack of a definite point of view among Wall Street representatives is confusing. But playing "back and forth" is a standard scheme in the process of mastering new technologies, so there is absolutely nothing to be surprised at. Plus Goldman Sachs was founded in 1869, and Bitcoin has only been around for 11 years. A skeptical attitude towards cryptocurrency on the part of financial giants is a natural phenomenon, since the basic principle of investing in their case presupposes obligatory provability, that is, the relevance of Bitcoin itself.

Why is Wall Streets interest in the coin fraught with? Intervention through the terms of the investment policy, changes in the rules of transactions, distribution and exchange rate of BTC. Investing by representatives of the financial district of New York will require a certain deal, but in any case, the project will be beneficial for the creators of Bitcoin and its course, and therefore for ordinary users. Moreover, the joining of Wall Street sharks to the mainstream could lead to cryptocurrencies getting the long-awaited financial status. 

Market researchers believe that Bitcoins position today has split Wall Street into two camps:

1. Pros: Goldman Sachs, Fidelity Investments, Morgan Stanley.
2. Cons: JP Morgan Chase.

Bitcoin is also criticized by Jordan Belfort, whose opinion has always had a special authority in the financial center of the world. But the ratio of "for" and "against" is clearly inclined in the positive direction, so we should expect an influx of large investments in the cryptocurrency project in the next 2-3 years.

They bought Bitcoin and got rich

For those who acquired cryptocurrency back in 2009, over the entire period of time, there was more than one chance to become a millionaire or even a billionaire. Until mid-2013, the price of Bitcoin did not exceed $ 100, but already in 2017, the lucky owners of a digital coin several times had a chance to get rich on the rate races. Who are these lucky guys?

Among the richest cryptocurrency owners, Chris Larson is in the lead. He was a small entrepreneur who started a business with partner George McCaleb in 1997, but after 8 years his fortune exceeded a billion dollars, all thanks to digital currency.

Having invested in BTC coins (and subsequently in XRP and Ripple) on time, Chris made a fortune of $ 20 billion by 2018. His company now accounts for another 55 billion in bitcoin equivalent, and 17% of the shares that he owns total $ 410 million.

Roger Ver is another billionaire with 300,000 BTC in his account. Investing in cryptocurrency in 2011, he convinced others that $ 10 for 1 BTC is far from the limit. No one accepted his position, but after two years the price of the digital coin surpassed the $ 1,000 mark. Thanks to the "lottery" with the course, Roger received about $ 2 billion and created several startups, including the famous information and analytical server Bitcoin.com. 

Tyler and Cameron Winklovs incredible profits were brought by the famous scandal involving Mark Zuckerberg. The brothers accused the latter of stealing the idea of the project, after lengthy legal proceedings and the conclusion of a contract, they were paid $ 65 million.

In 2013, Tyler and Cameron decided to use the funds received wisely, for some of them they purchased 1.5 million BTC coins. Today their capital exceeds $ 10 billion. The brothers are actively investing the funds received in projects related to cryptocurrencies. They recently created their own Bitcoin exchange platform and are planning to implement the idea of an electronic monetary fund.

Many people know the story of Gerad Kenn, who was at the origin of Bitcoin investment. He acquired a digital coin at a time when it cost 20 cents per unit. As of 2018, his fortune was estimated at $ 30 million, but the current limits of Kenns Bitcoin ownership are not known to anyone. It is significant that he recently unintentionally erased 800 Bitcoin data from his HDD, but he wasnt even upset.

Anthony Gallippi is considered a BTC entrepreneur with a fortune of 34,000 electronic coins. Its success was achieved through the creation in 2011 of the BitPay project, designed to assist in cryptocurrency transactions. 

In 2013, Gallippi gave a talk on Bitcoin to the United States Congress. Today he is one of the top experts and analysts in the field of cryptographic techniques. And, despite the high volatility of Bitcoin, Anthony continues to confidently invest in it, declaring that the future lies behind the cryptocurrency.

The youngest millionaire in the history of BTC is Eric Finman, who owns over 400 coins at the age of 15. The guys story is inspiring. On his twelfth birthday, his grandmother gave him $ 1,000, believing that his grandson would save this money for his studies. But young Eric decided to try himself as an investor and bought a cryptocurrency with the donated money. After upgrading to $ 1,200 per unit, Finman sold Bitcoins and created an online platform for video-based education.

In 2015, the guy decided to sell the business and took payment for it in Bitcoin (300 coins). After another jump in the course, he became a millionaire. Today Eric lives in Hollywood, is engaged in business, travels the world and continues to invest in cryptocurrencies.

Yufu Gou started mining digital money while still a student. Initially, the funds received only ensured its existence, but after assessing the prospects for Bitcoin, Yufu began to master the investment market. This gave the guy the results he needed.

He dropped out of university and started his own ASIC company, Avalon. They were distinguished by innovative speed, not inherent in classic video cards, which ran 50 times slower. The equipment was in demand, as forecasts for the rise in the BTC rate attracted many users capable of creating computer algorithms. The first device, created by Yufu Gou, was sold through Ebay for $ 20,000, now the price is much higher.  

Charlie Schrem possessed an almost intuitive confidence in the growth of the Bitcoin rate. He started investing in cryptocurrency in 2011. Then the man created his first startup called BitInstant. He provided the receipt of Bitcoin-currency through merchants in 700 different places around the world.

But due to non-compliance with the norms of the law, Charlie was imprisoned. In 2014, his project was closed. After serving a two-year sentence, the man “curtailed” illegal activities, but did not give up Bitcoin. He now runs a department at Jaxx and has 100,000 BTC in his account.

Michael Novogratzs fortune is 42,000 digital coins. This result was achieved thanks to the genuine interest that he showed in 2013. Buying up virtual money, the man sent it to a hedge fund, which was looking for new vectors for business development. For a couple of years, this has brought him significant profits. 

Michael draws the attention of users to the fact that half of his money savings are still kept in Bicoins, as he is confident in the next jump in the rate.

Conclusion

From 2008 until today, Bitcoin has undergone many transformations related to its encoding / decoding, recognition, rate fluctuations, and forking. The rapid development in a short period of time by historical standards has led to a slight stagnation caused by the activity of miners and external circumstances. But already now the cryptocurrency is gradually recovering and progressing.

Benefits such as decentralization and privacy are attracting the attention of major financial players to Bitcoin, and the development of state-level regulations indicates that it is no longer unusual, but is integrated into the system. This makes it more secure and stable.