What is Bitcoin?

Created in response to the 2008 financial crisis, Bitcoin is described by its creator as a peer-to-peer e-cash. In this 3 part series we review the history, reason for existance and the technology behind Bitcoin. 

A mysterious beginning and a decade long history

Bitcoin is probably the first blockchain to be introduced to the world in 2009 by its mysterious creator Satoshi Nakamoto. Till to date, no one knows who Satoshi exactly is. Even the early developers and adopters of Bitcoin have very little knowledge of Satoshi. Many individuals have claimed to be the actual Satoshi but doubts remain as to the veracity of these claims.


One thing remains certain regarding the origins of Bitcoin. The Bitcoin blockchain was created as a response to the 2008 financial crisis and the less than honourable move by central banks all over the world to salvage the failing commercial banks and companies. Thanks to excessive printing of money and lowering of interest rates through a scheme called quantitative easing, governments in major developed economy artificially propped up the value of equities, properties and bonds for the next decade. This could have cornered the central banks into the current situation of not having adequate tools to respond well to the current economic slowing that is playing out. For a beautiful overview of how the economy works, please click here.

Without deviating too much, Bitcoin’s vision is to create an alternative monetary system that is not dependant on the whims and fancies of politicians and bankers. A monetary system that is global, inclusive and outside of the control of any central authority. Very few people understand the potential that the Bitcoin blockchain holds and if you are reading this then you could be having a head-start compared to your peers.

In the early days, Bitcoin was exchanging hands for pennies and eventual a couple of dollars. The infrastructure to enable to access to investors was limited to major Western countries and during this time smaller scale miners were able to complete the mathematical task required to mint new coins. There was very little competition and the demand for Bitcoin was limited to techies. One guys by the name of Laszlo Hanyecz even spent about 10,000 Bitcoins to buy two Papa John’s pizza in 2010 not realizing the potential of Bitcoin over the long term.


Between 2012-2016, Bitcoin experienced tremendous growth among libertarians and others who felt victimized by the current financial system. Add to this a handful of macro-economic investors who understood the value and power of something that is not controlled by central banks and it’s potential to act as a hedge. These very early adopters could have bought Bitcoin for hundreds of dollars and could currently rank as billionaires.

This was also a time when, other blockchain projects took of and let to the creation of a new trend in crowd-sourced projects through initial coin offerings (ICOs). The peak of this was in 2017, when the price of Bitcoin hit all-time highs of more than 19 thousand dollars. Subsequently, the market corrected and let to a general collapse in the valuations of blockchain projects.

With the looming threat of economic crisis in 2019 and onwards, the notion that Bitcoin could again act as a hedge seems to be gaining popularity. Aiding the increase in price of Bitcoin recently, is the greater adoption by several institutional investors and improvement of the access and infrastructure to cryptocurrencies.