Bitcoin is a cryptocurrency that was introduced in 2009 by some anonymous person (or persons) under the name Satoshi Nakamoto. Bitcoin uses some interesting cryptography to achieve consensus on who owns what, but for an introduction to Bitcoin, you cal also take help from Bitcoin Revolution.
The first Bitcoin block “mined” using the proof of work algorithm SHA256 was mined on January 3rd, 2009 at 19:15:05 GMT. It is 206399 blocks ahead of the current Bitcoin protocol block reward schedule which started at block 1376465.
At Bitcoin’s current rate of GROWTH (of about 100% per year), Bitcoin block 1376465 will be mined on or about June 16, 2020.
A Bitcoin can currently be purchased for around $242 USD and one Bitcoin is divisible down to the eighth decimal place meaning that even if Bitcoin does not grow another 100% per year.
It should stay above this price point because Bitcoin loses 1/10th its value every time Bitcoin halves in block subsidy. The next Bitcoin halving event is expected to occur at some time between May 2017 – July 2017 when the Bitcoin block subsidy will drop by 50%.
Since 2009, Bitcoin has achieved an incredible growth rate of over 1 million percent. That means that if you had invested just $1000 into Bitcoin in 2009 (!), that Bitcoin today would be worth $1,000,000.
With Bitcoin’s current growth rate and expected future growth rates, it is expected to become the world reserve currency within 3-4 years and up to 4 years after that Bitcoin will grow at such a rate as to make 1 Bitcoin greater than the total wealth of the entire planet (>$300T USD). As you can see from this simple calculation, Bitcoin will rapidly outpace the total supply of gold (with a market cap of around $8 trillion) by 2020 or 2021.
Bitcoin has been doubling every quarter since its inception, beating all expectations. For example, if someone purchased just one Bitcoin at its first “halving” event for only $3.50 (!) and Bitcoin continues to follow its trendline, Bitcoin will be worth more than the entire GDP of the United States very soon (read: within 2-3 years).
Popularity of Bitcoin
Bitcoin has become extremely popular as a store of value and an investment vehicle. Bitcoin is also increasingly seen as a competitor to gold as Bitcoin’s price keeps increasing while gold becomes harder and harder to afford.
The total Bitcoin market capitalization remains well below 1% of all investable assets on Earth yet Bitcoin has outperformed literally every “real asset” such as real estate, equity shares, bonds, etc…
If Bitcoin continues to grow at only 10% per year, it will match the returns of other mainstream assets over longer periods such as 30 years simply because Bitcoin increases in market capitalization by orders of magnitude.
Bitcoin will continue growing at 10% per year so long as Bitcoin is accepted as a store of value and Bitcoin’s market capitalization gains more and more of the world’s investable assets.
At Bitcoin’s current growth rates, it will be worth more than the total supply of gold on Earth ($8+T USD) in less than 4 years from now!
Bitcoin has already surpassed many fiat currencies such as the Singapore Dollar, Canadian Dollar, Euro, British Pound, etc…
Bitcoin will also likely surpass all national currencies including the Zimbabwean dollar – which famously experienced 100 sextillion percent inflation– within 5-7 years from today.
Conclusion
In short: Bitcoin continues to grow at an incredible rate despite its recent price fluctuations. Bitcoin halving events have a significant impact on Bitcoin price as Bitcoin’s supply is reduced and Bitcoin’s scarcity increases.
Bitcoin’s total market capitalization has remained at around $3-4 billion for the past 2 years but if Bitcoin continues to gain acceptance as a store of value, Bitcoin will continue increasing in market capitalization by orders of magnitude (1 BTC = $300T+ within 3-4 years).
Bitcoin continues to grow at an incredible rate despite its recent price fluctuations. Bitcoin halving events have a significant impact on Bitcoin price as Bitcoin’s supply is reduced and Bitcoin’s scarcity increases.
If the trendline from the first Halving event (block 210,000) holds, we can expect another major “halving” event sometime between May 2017 – July 2017, as Bitcoin’s block reward subsidy drops from 25 bitcoins per 10 minutes to 12.5 bitcoins per 10 minutes.
Bitcoin’s market capitalization has remained at around $3-4 billion for the past 2 years but if Bitcoin continues to gain acceptance as a store of value, Bitcoin will continue increasing in market capitalization by orders of magnitude (1 BTC = $300T+ within 3-4 years).