It was the first cryptocurrency. Bitcoin was devised in 2008 by Satoshi Nakamoto. It is based on a blockchain, a publicly distributed decentralized peer-to-peer electronic ledger, which was launched in 2009. Bitcoin dominates the cryptocurrency scene in terms of adoption, market capitalization, and development.
Bitcoin’s ISO code is XBT, but most trading venues list pairs using BTC ticker. Therefore, you will most likely see BTC/USD, and BTC/ETH when trading Bitcoin.
Its widespread adoption means that when trading Bitcoin on exchanges, you will be getting the highest liquidity of all cryptocurrencies, and when trading it as a CFD, you will be getting the lowest spreads.
How Bitcoin Became So Popular
Bitcoin was the first digital currency to be created. It is also the most respected, capitalized and traded cryptocurrency in the world. Bitcoin trading is booming, and a big reason for this is the volatility of this cryptocurrency. Currency trading allows for maximum yield when it is volatile – lots of ups and downs. This is precisely the reason global traders enjoy trading Bitcoin. Plenty of profitable opportunities are available when markets are volatile, and Bitcoin ranks highly with currency traders.
The media plays a big part in the volatility of Bitcoin. Whenever a breaking story surfaces, Bitcoin volatility increases, and traders cash in. History has shown that Bitcoin traders and speculators routinely push this digital currency to the forefront of CFD trading. It is increasingly being used as the preferred payment option at merchants, for money transfers and for trading purposes. More traders are turning to Bitcoin trading than ever before, and that is why this cryptocurrency is inherently valuable. It is a high demand financial trading instrument, despite no association with governments or central banks.
Bitcoins are mined with powerful computer hardware and software. A maximum of 21 million Bitcoin will be available, after which no further bitcoins will be produced. The algorithm which governs the production of Bitcoin limits the quantity that will be produced, and the rate at which they will be produced. It is a finite commodity – there is a fixed amount, and that ensures that greater demand will always prop up the price. In this way, it is similar to other finite commodities such as crude oil, silver, or gold.
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Bitcoin’s Rise to Prominence
Around 2008, Satoshi Nakamoto founded Bitcoin. At the time a paper was published through the Cryptography Mailing List. The first Bitcoin software client was released in 2009, and he collaborated with many other developers on the open-source team, careful never to reveal his identity. By 2011, the enigmatic Bitcoin founder had disappeared. His peers understood how valuable this cryptocurrency was, and worked feverishly to develop it to its maximum potential.
By October 2009, the world’s first Bitcoin exchange was established. At the time, $1 was the equivalent of 1,309 Bitcoin. Considering how expensive Bitcoin is today, that was a real steal. Bitcoin traded at a fraction of a penny for quite some time, however things changed in 2010. As the distribution of Bitcoin increased, the digital currency became inherently more valuable. Demand increased, and this reversed the exchange rate accordingly. In early 2010, the currency was gaining momentum, and so the distribution of the Bitcoin started to increase along with its demand, by November of that year 4 million Bitcoins had been ‘mined’. And so the rise of the Bitcoin began…