Happy 16th Birthday to Bitcoin
Bitcoin has come a long way in just 16 years, maturing from an academic cryptographic experiment to a multi-trillion dollar global financial powerhouse and is now bringing its market capitalization through the $1.41 trillion mark.
Time will tell regarding the impact of this monumental evolution, but we now know that Bitcoin is the 10th largest asset in the world, with a great deal to say about money, value and financial sovereignty.
On October 31, 2008, Bitcoin: A Peer-to-Peer Electronic Cash System was published by the pseudonymous creator Satoshi Nakamoto.
In it, they outlined a peer-to-peer connection which was intended to prevent double-spending via PoW-based consensus, shared with a cryptography mailing list. It was a simple and revolutionary idea: non-centralized, money not under any jurisdiction. Three months after that, Bitcoin’s genesis block—the first block of the Bitcoin chain—was mined. The largest crypto network today has just been born.
Bitcoin White Paper: The Start of a New Revolution
Satoshi Nakamoto in their white paper identified a specific problem to solve: trust when transacting value. In dealing through traditional finance systems, it requires an important intermediary — a bank, government or another third party to track and process transactions.
The brilliance of bitcoin is its decentralized and peer-to-peer model that enables proof-of-work consensus to confirm transactions and prevent double-spending, all without a central authority.
Just three months after the white paper was published, Nakamoto birthed Bitcoin by launching its genesis block and the world would know decentralized currency for the first time.
That white paper is now held in high esteem as the basis of both blockchain tech and decentralized finance more generally, with thousands of subsequent projects seeking to upend traditional financial systems.
Bitcoin: A New Digital Gold?
Skip ahead nearly one and a half decades, and Bitcoin is now considered by its proponents as “digital gold.” Gold has been a store of value for millennia and Bitcoin became one in the blink of an eye. This rapid rise is obvious, as highlighted by Mithil Thakore, co-founder and CEO of Velar:
“The bitcoin network has developed from a fairly stable digital experiment to a widely adopted asset class that may one day match gold’s ubiquitous status as an ultimate store of value.”
– (Mithil Thakore, CEO of Velar)
With institutions holding Bitcoin for longer timeframes and Bitcoin exchange-traded funds (ETFs) being introduced, Thakore said, the incorporation of Bitcoin into traditional finance demonstrates that it is maturing as an asset.
Even the world’s largest asset manager, BlackRock is allocating billions for this new asset class.
On October 30, BlackRock’s holding in its spot Bitcoin ETF crossed the $30 billion mark as demand for Bitcoin rises among institutions.
The boost in institutional demand has only expedited the adoption of this asset, solidifying its position as a hedge against inflation and economic turmoil.
Institutional Adoption and a New Financial Paradigm
The attraction it has generated among institutions has propelled not just investment in Bitcoin but a wide-ranging reformation of finance.
With more asset managers now getting involved and more Bitcoin becoming linked to traditional markets, that has sparked renewed regulatory talk—if not fierce debate—in the wake of exchange-traded fund approvals.
And yet, Bitcoin has prospered, showing a nature that even the most cynical could never have guessed back in 2008.
In those 16 years, as the author points out above, Bitcoin has catalyzed and driven a global decentralized finance movement that challenges traditional financial models; it has become for many people around the world a method of conversion store of value or financial lifeline in an age where central banks and fiat currency systems are ever more feared.
And, in an era when inflation is still a big problem, its use as a store of value has always remained one of its main attractions.
ETFs and the New Era of Accessibility
Bitcoin ETFs (Exchange Traded Funds) have played a key role in bringing Bitcoin into the mainstream to ease linking Bitcoin with other types of investments within a portfolio.
Bitcoin ETFs have been in high demand this year, illustrating Bitcoin’s development from an experimental digital currency to a legitimate financial asset.
ETFs have introduced retail and institutional investors to more of a traditional finance approach to entry into the market and provided a bridge between active capital pools in both sectors.
The Best Currency for Financial Freedom
Bitcoin, ’the Best Currency in the World’, Says Tether CEO Paolo Ardoino Ardoino acknowledges that people are not all ready for it, but he said Bitcoin is financial freedom. He stresses that Bitcoin is the only anti-inflation/economic instability currency and a separate type of financial self-sovereignty.
There is no one saying that those people are wrong or who don’t realize that Ardoino explains that if you like people,
“they have bigger problems in their lives and they simply cannot afford right now the little time for Bitcoin. However, I think that another way of looking at it is that USDt may be lowering the bar to entry into Bitcoin for these people.”
Something like Tether (USDt) is easing that transition, enabling individuals to interact with Bitcoin’s ecosystem even more effortlessly.
The Path Ahead: A New All-Time High?
This makes it significantly more interesting that Bitcoin is experiencing a price movement on its 16th anniversary. Bitcoin’s zodiac days—just before the white paper anniversary—reached a seven-month high of $73,600, tempting a new all-time high. Most market analysts take a more cautious approach, with many suggesting that a record-breaking rally is possible following the 2024 U.S. presidential election.
There is much more to come in Bitcoin land. It took Bitcoin barely 16 years, from its simplest white paper concept in 2008 to a trillion-dollar asset adopted by financial behemoths all around the world, to make the finance world rewrite the books.
Bitcoin is nothing but a story of decentralized and human effort to be rich and prosperous that it represents in its current state.
