Today Bitcoin is 11 years old

Today it is eleven years ago that the Bitcoin network was launched. The first block, also called the genesis block , was mined by Satoshi Nakamoto on January 3, 2009 , and with that the Bitcoin network was a fact. Now, 11 years later, Bitcoin still exists and the network is stronger than ever before. Congratulations Bitcoin!

Today it is 11 years ago that the Bitcoin network started. The development and white paper had been around for a while, but from January 3, the network actually went live and the first block was mined by the mysterious creator of Bitcoin Satoshi Nakamoto; the so-called genesis block . In addition to launching the network, Satoshi Nakamoto also posted a message in the genesis block: The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.

This message refers to the title of a newspaper article in The Times of January 3, 2009. Apart from the presumed political message behind this, the message also functions as a so -called time-stamp . With the help of this timestamp it can be proven that before January 3, 2009, for example, bitcoins have not been secretly mined before.

Many Bitcoiners celebrate Bitcoin’s birthday on January 3. Some of the Bitcoiners also celebrate Proof of Keys on this day. In addition to being a celebration, this is also an event on which many Bitcoiners simultaneously withdraw their Bitcoins from exchanges and other service providers to their own wallets as an expression of financial sovereignty and to keep exchanges fair.

Developments

In the eleventh year of Bitcoin’s existence, a lot has happened again and the network and ecosystem continued to grow. We have seen numerous developments in the past year. It will of course not have escaped the attention of many that the bitcoin price seems to have climbed out of the trough and showed exceptional growth in 2019. On January 3, 2019, a bitcoin was still traded for about 3,200 euros, but in June that rose to 12,000 euros per bitcoin. At the moment that has fallen again to about ???????6200; still double compared to the price a year ago.

But the price of bitcoin is still mainly speculative and strongly dependent on market psychology. However, other indicators also indicate that Bitcoin is doing well.

Hashrate breaks record after record

For example, the collective computing power of all Bitcoin miners, also expressed as hashrate , rose to unprecedented heights in 2019. The computing power of the miners is used via the Proof of Work mechanism to protect the blockchain against attacks. The higher the hash rate, the more secure the blockchain is.

In 2019, the hashrate record was broken several times. In fact, right now, the hashrate is nearly 7x what it was in 2017 when Bitcoin’s price peaked, and more than twice what it was a year ago. This makes the Bitcoin network more secure than ever.

Lightning Network

The Lightning Network also continued to grow. The Lightning Network is a second network built on top of Bitcoin to increase Bitcoin’s transaction capacity and speed. Thanks to the Lightning Network, thousands of transactions per second are possible, which are executed almost instantly and for very low transaction costs. Many Bitcoiners expect the Lightning Network to be a major contributor to the global use of bitcoin for everyday payments.

Last year we saw the Lightning Network and its adoption grow. Early in the year, the passing of the Lightning Torch already showed the power and capabilities of the network. Slowly but surely, however, the real adoption also started to take shape. For example, we saw various wallets, service providers and other applications embrace the technology. For example, the Lightning app from Lightning Labs, the micro payments from Lightning Tippin’, or the integration of HodlHodl in BlueWallet via the Lightning Network.

Developments such as the Casa Node, with which a plug & play Lightning Node can be set up, also contribute to further adoption. Recently, one of the largest bitcoin exchanges Bitfinex also announced that it will support Lightning transactions. The team behind RGB tokens also announced that colored coins , or digital tokens released on Bitcoin, are once again possible thanks to the Lightning Network.

The Lightning Network is still in its infancy and is far from fully developed. This also became clear when a vulnerability was discovered in several Lightning implementations in September. Fortunately, the smartest Bitcoiners in the world are on top of it. At meetings and conferences such as Scaling Bitcoin in Tel Aviv and the Lightning Conference in Berlin, knowledge is shared and new methods to improve the network are considered. Bitonic is also a participant in these types of events and in some cases a sponsor.

New technologies

In addition to the Lightning Network, there is still a lot of work to improve the basic layer of Bitcoin. A lot is happening on all fronts. For example, thanks to Miniscript, smart contracts on Bitcoin become a lot easier and technologies such as Erlay help to keep the necessary bandwidth in check. Neutrino improves the privacy of light clients and protocols like Stratum V2 improve decentralization among bitcoin miners, while technologies like Taproot increase the privacy of smart contracts.

Meanwhile, the launch of Bitcoin side-chains, such as Blockstream’s Liquid Network or newer initiatives such as the Echo side-chain, further expand the functionality and capacity of the Bitcoin network. Also noteworthy in 2019 was Microsoft’s initiative to try to enable a decentralized digital identity based on Bitcoin.

In short, a lot is happening and the innovation and further development of technology are not standing still.

Adoption & Developing Countries

After eleven years, the adoption of Bitcoin also seems to be slowly but surely getting through to the rest of society. In the west, we saw the tentative steps of institutional players in the bitcoin market with initiatives such as Bakkt. Tech giants and governments worldwide, charmed by the technology and possibilities of Bitcoin, are all experimenting with their own implementations. In vain, many Bitcoiners find.

The approach of Jack Dorsey, CEO of Twitter and payment app Square, on the other hand, is seen in a much more favorable light. He decided not to launch his own token, but to embrace bitcoin and has hired several bitcoin programmers in the past year.

Slowly but surely, society also seems to be aware of the monetary properties of bitcoin. For example, the French Ministry of Education recently made a teaching package available to secondary schools in which, among other things, the economic aspects of bitcoin are explained.

In politics and in the public debate, however, attention is still mainly focused on the possibility that bitcoin is used for criminal purposes, such as money laundering and terrorism financing. The renewed European anti-money laundering directive will therefore probably lead to very strict regulations being applied to the sector in the Netherlands, including mandatory identity checks, which is at the expense of financial privacy and is an obstacle to the adoption of bitcoin as a means of payment. Incidentally, renowned blockchain analysis company Chainalysis showed last year that most bitcoin transactions with a high degree of privacy are not that illegal or criminal at all. Together with VBNL, Bitonic is therefore making tireless efforts to advocate for a more lenient policy that gives room to innovation and does not compromise the privacy of citizens.

However, we saw perhaps the most interesting developments in other, less developed parts of the world. For example, it seems that the monetary properties of bitcoin are increasingly being understood in countries where the economy is not doing so well, or where access to money is limited due to circumstances. For example, direct bitcoin trade grew in countries such as Venezuela, Colombia, Nigeria, South Africa, Kenya and Russia and the bitcoin price reached a record in Argentina. In Iran, the unique properties of bitcoin appear to be of interest to part of the population, including the government. Regarding the economic crisis in Lebanon, academic Nicholas Nassim Taleb said, “You can’t ignore the bitcoin story” .

Bitonic

Just like Bitcoin, Bitonic continues to grow. An adventure that started in 2012 in an attic room grew in 2019 into an organization with 36 driven and talented individuals. A new growth phase that is also reflected in our renewed website and house style.

Bitcoin and Bitonic are inextricably linked. That is why we are committed as widely as possible to support the bitcoin community and to provide politicians and society with information about Bitcoin. We do this, among other things, by getting involved in the political and social debate together with the VBNL, but also by providing information via bitcoin.nl and supporting initiatives such as The Bitcoin Show. We are also a participant in and sponsor of various events and conferences, where people think about and contribute to the further development of Bitcoin.

In 2019 we also launched the alpha version of the new mobile app of our exchange BL3P. That’s just the tip of the iceberg. Just like Bitcoin, Bitonic is stronger than ever and we are confident, in good spirits and brimming with energy into the new year.

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