Crypto Academy

What is Bitcoin? A Step-By-Step Guide

Bitcoin is a digital currency (cryptocurrency) that is decentralized, which means that it is free from third parties, such as banks. It can be used to make online transactions and uses a peer-to-peer (user to user) system for these transactions.

Unlike traditional currencies, cryptocurrencies have no physical form and are not controlled by a government, and their privacy protocol involves a direct link to the public. 

Bitcoin and some other cryptocurrencies have a limited number that can be mined in order to promote an inflation-free market. Bitcoin’s limit is 21 million tokens, which are programmed to run out in the year 2140. 

What is Bitcoin? A Step-By-Step Guide
Bitcoin privacy protocol does not involve any third party. Source: Bitcoin White Paper

How Does the System of Virtual Currencies Work?

How does this system of virtual currencies work such efficiently that it has the potential to replace all traditional currencies? The transactions are not as simple as they seem.

All the transactions that are done in the cryptocurrency market are registered in a virtual ledger, which is known as the blockchain

Every transaction includes a private key that functions as a signature by the person initiating the transaction. These transactions are verified by public keys from other individuals in the cryptocurrency network. With every verification, new data is added to the blockchain. However, these verifications involve advanced mathematical problems that require artificial intelligence (computers) to solve. Whenever a new block (data) is added to the blockchain, the network awards the solver with crypto tokens (i.e. Bitcoins). This process is commonly known as mining.

The amount of bitcoin provided for every block added is 6.25 BTC, and this amount is halved approximately every four years. Every 10 minutes, a miner is awarded for adding a block of information to the blockchain. Since the founders of Bitcoin capped the number of Bitcoins that can be created (21 million tokens), and with around 18.5 million tokens already mined, it is projected that the last Bitcoin will be mined in 2140. Check out CryptoRunner if you want to learn more about bitcoin and virtual currencies.


Who is The Bitcoin Founder?

As huge as Bitcoin is now, its founder is still unknown. Satoshi Nakamoto is a pseudonym for the presumable founder of Bitcoin because his name appears on the Bitcoin white paper.

However, there was never enough evidence to support that. As a result, there are many internet conspiracies regarding the founder of Bitcoin. 

Found in 2008, it is believed to have derived due to the 2008 economic crisis, but it became public in 2009. 

Furthermore, Software developer, Gavin Andersen took charge of the Bitcoin project by the end of 2010.

Timeline of Bitcoin

After its release in 2008, Bitcoin was not a familiar term for the majority of the world’s population. One block addition to the blockchain earned (mined) 50 Bitcoins. 

It took three years for a token to be worth $1. By 2011 the price went as high as $29.60.

In 2012, the mining capacity halved to 25 Bitcoins.

The Bitcoin ‘forked’ (added new versions) in the crypto world over the years with Litecoin, Bitcoin Cash, Bitcoin Gold, etc. These forks were categorized as soft forks or hard forks. Soft forks are versions of Bitcoin that have backward compatible updates, while hard forks are versions of Bitcoin with a whole set of new protocols. 

12.5 Bitcoins were mined for each block of information added to the blockchain by 2016.

In December 2017, Bitcoin reached $19,834. However, the cryptocurrency market crashed, causing the Bitcoin price to drop as low as $3,747. The end of this depreciation initiated another bull run in 2019, with the price reaching close to $13,000, and then dropping back to $5,000 on the verge of the COVID-19 pandemic in March of 2020.  Bitcoin amount mined in 2020 was halved to 6.25.

Ever since, the Bitcoin price has been constantly increasing, closing 2020 with a value of $28,837.

Bitcoin Today

As of the 18th of February 2021, Bitcoin has reached its highest ever value at $52,547.

Visual representation of the change in the price of Bitcoin (BTC), as well as its market cap. Source:

Where does that leave Bitcoin now? What best defines the cryptocurrency market is its uncertainty and unpredictability. Thus, it is difficult to depict whether it is a good time to invest in Bitcoins.

Future of Bitcoin – BTC Price Prediction 2021, 2025, 2028

We have overviewed the early phases of Bitcoin. We have briefly gone through the timeline of Bitcoin up to 2021. It is easy to say where Bitcoin stands now. But, what about the future of Bitcoin? 

Predictions on the value of a cryptocurrency (i.e. Bitcoin) are done based on the historical patterns that the cryptocurrency has had. 

As such, many credible sources, such as Digitalcoin predict a constant rise of cryptocurrencies, especially Bitcoin (BTC). 

One of the ingredients for this prediction is the scarcity of Bitcoin and the fact that it is slowly reaching its limitation of 21 million Bitcoins. Basic laws of economics suggest that whenever there is a shortage of a product, in this case, Bitcoin, its price must rise in order to balance the economy and reach market equilibrium. 

Based on the predictions made by Digitalcoin, Bitcoin can reach as high as $80,500 in 2021, $157,800 in 2025, and approximately $238,900 in the year 2028.

The study conducted by Digitalcoin suggests that the increase in the price of Bitcoin (BTC) is inevitable, even if the values do not reach the exact number.

No matter how much the price of Bitcoin or other cryptocurrencies will change in the future, humanity could become much more reliant on the crypto market.

Bitcoin (BTC) price predictions for this decade. Source:

Advantages of Bitcoin

Why buy Bitcoins (BTC) or other cryptocurrencies in the first place? Besides the possibility that an individual might become so rich while trading cryptocurrencies, there are also many other advantages to buying and using cryptocurrencies, especially Bitcoin (BTC).

Some of the pros of Bitcoin:

Drawbacks of Bitcoin

As expected, every cryptocurrency has its setbacks that complement the advantages. As such, Bitcoin (BTC) together with the other cryptocurrencies entail disadvantages as well.

Some of the cons of Bitcoin:

Bitcoin (BTC) national energy usage in TW/h. Source: BBC News

Is Investing in Bitcoin (BTC) a Generally Good Idea?

Whether it is worth investing in Bitcoin or not remains a normative statement. Not everyone has the same opinion on whether it is the right time for a cryptocurrency to appreciate.

Some might feel like it is better to invest now as it is still on a bull run, as of February 18th, 2021. Others might perhaps argue that it is better to wait until Bitcoin (BTC) halves again (around 2024), but three years from now seems like a long time without investing. 

Thus, it is up to an individual’s personal choice to decide about investing in BTC or other cryptocurrencies.


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