Bitcoin - From Experiment to Trillion Dollar Asset

Born on October 31, 2008, after 16 years, Bitcoin has grown from an obscure financial form to the 10th most capitalized asset in the world.

16 years ago, Bitcoin's "father" Satoshi Nakamoto shared a white paper titled Bitcoin: A Peer-to-Peer Electronic Cash System with a cryptographic mailing list, proposing a decentralized, peer-to-peer network.

As envisioned by Nakamoto, nodes in the Bitcoin peer-to-peer network verify transactions using cryptography and record them in a public, decentralized ledger called a blockchain. Consensus among nodes is achieved using a computationally intensive proof-of-work (PoW) process called mining. Miners receive block rewards in Bitcoin, but the amount is halved after each halving .

Bitcoin white paper was introduced on October 31, 2008. Photo: Bitcoin.org

Three months later, on January 3, 2009, Nakamoto mined the first block of Bitcoin, called the Genesis block, and received a reward of 50 Bitcoins - the starting point for what is now the world's largest cryptocurrency network. On May 22, 2010, the first commercial Bitcoin transaction took place when programmer Laszlo Hanyecz bought two Papa John's pizzas for 10,000 Bitcoins , later known as Pizza Bitcoin Day. That amount of Bitcoin is now equivalent to $700 million.

Bitcoin's value increased sharply mainly after 2020 when large companies started buying this cryptocurrency. In February 2021, Bitcoin's market capitalization reached $1,000 billion for the first time.

Bitcoin ranks 10th in global market capitalization. Source: CompaniesMarketCap

Bitcoin now has a market value of more than $1.42 trillion, making it the 10th-largest asset globally, according to CompaniesMarketCap . On the anniversary of the white paper's release, the price of Bitcoin rose to $73,600, its highest in seven months and just $200 away from its all-time high - something some analysts predicted would happen after the US presidential election.

"Digital Gold"

According to Mithil Thakore, co-founder and CEO of Velar - a blockchain company operating in the field of decentralized finance (DeFi) in Dubai (UAE), the development of Bitcoin in nearly two decades has been fueled by the confidence of investors and the acceptance of many organizations when considering this digital currency as a place to store value.

“Bitcoin has gone from a niche digital experiment to a global asset class that rivals traditional stores of value like gold,” Thakore told CoinTelegraph . “But unlike gold, which took thousands of years to establish itself, it has captured institutional attention, sparked regulatory debates, and propelled the global decentralized finance movement in just 16 years.”

The world's largest Bitcoin holders. Source: EdmondsonShaun/X

According to Thakore, Bitcoin's maturity is reflected in the increase in long-term holdings by organizations and individuals, and its deeper integration with traditional financial markets. In addition to Bitcoin's "father" Satoshi Nakamoto, companies such as Binance, BlackRock, GrayScale, and Microstrategy all hold more than 250,000 Bitcoins. Recent ETFs also hold nearly a million Bitcoins.

“Bitcoin ETFs are gaining more and more attention, highlighting Bitcoin’s transition from a digital currency to a major financial asset,” one expert commented.

At the Plan B Lugano event in Switzerland on October 24, Paolo Ardoino, CEO of Tether , the world's largest stablecoin issuer , commented that Bitcoin has evolved from an experimental financial solution to one of the "optimal options for financial freedom" in the context of economic instability.

Illustration of Bitcoin's birthday. Photo: CoinTelegraph

Several countries have accepted Bitcoin, such as El Salvador as legal currency, while Bhutan is also said to be secretly mining Bitcoin.

However, many scholars consider Bitcoin and cryptocurrencies in general to be an economic bubble or suspect them to be disguised ponzi schemes. Many countries have banned this cryptocurrency such as Algeria, Egypt, China... while others are gradually perfecting the legal framework to control it. In addition, cryptocurrency mining activities have also been criticized for causing negative impacts on the environment.