From Inception To Date: How Bitcoin Touched $50,000

The first cryptocurrency was created in 2009 by Satoshi Nakamoto. Despite its strong volatility, some analysts think that the value of Bitcoin is set to grow. While the European Central Bank (ECB) doesn't consider it as a currency, Tesla Inc. TSLA has decided to accept it as a payment method.

One Record After Another: Bitcoin (BTC) almost reached the $50,000 mark, stopping just one step away from the finish line at $49,716.44. As it’s always the case when it comes to cryptocurrencies, volatility is still very high, but the increase in price - between ups and downs – has been a constant trend since September. After the record high reached at the end of 2017, Bitcoin value collapsed to $4,000. Today, it reached again the highest level, increasingly attracting interest among both private and institutional investors.

See Also: Bitcoin Crosses $50,000 For The First Time Ever

When It All Began: It was 2009 when Satoshi Nakamoto created the most famous cryptocurrency in the world. Unlike a fiat currency, it is not distributed by a central bank, but it’s based on a network of PCs that distributes it based on a cryptography mechanism that is used to validate transactions. Another feature is the limited amount: only 21 million Bitcoins are available on the net.

What Is Blockchain: The blockchain is a technology born together with Bitcoin. It is a decentralized system based on an open, shared, and distributed ledger that relies on peer-to-peer technology in order to ensure the security of every single transaction. Among other things, the use of this technology also ensures the transparency and immutability of the content of the ledger.

First Bitcoin Transactions: Will Bitcoin ever be used for everyday payments? There’s still a debate in this regard. What is sure is that it was used to pay for a pizza. On May 22, 2010 the programmer Laszlo Hanyecz paid for two pizzas with the cryptocurrency by offering 10,000 BTC, which at the time were only worth $30 - today almost $500 million.

Buying A Tesla With Bitcoin: With speculation and investments, Bitcoin is increasingly in the spotlight. Tesla founder Elon Musk said he will accept Bitcoin payments in the future, but he will rely on third parties to mitigate its volatility. The Wall Street Journal also explained the reasons why Bitcoin is unlikely to become a currency for the payments of everyday spending. At the moment, the main issue limiting this use is the strong volatility that can change the value of an asset from the moment of purchase to the delivery of the asset itself.

What’s Next? Some people think Bitcoin is set to rise, while other analysts suggest it will experience a halt. Full-fledged currency or a mere speculative asset? The debate is getting underway. It is difficult to imagine what to expect in the near future. According to Bradley Duke, co-founder & CEO of ETC Group — the company that launched BTCetc Bitcoin Exchange Traded Crypto (BTCE) listed on Deutsche Boerse - "one of the main factors explaining the strong acceleration of Bitcoin is the basic change of the risk premium for asset managers, who now need to be able to access the safest way possible to invest in Bitcoin”. However, the decision on Bitcoin's risk premium is now "much less that of an asset class on the edge when compared to the Tesla case, which rallied 8.2 times in 2020 to reach a bigger market capitalization than the seven largest car manufacturers in the world, albeit at a fraction of their revenues.”

See Also: This Is How Tesla Could Let You Buy An EV With Bitcoin

"It Is Not A Currency:" In the past few days, the ECB has taken a stand against cryptocurrency. "Bitcoin is not a currency, and it is out of question that it will somehow become part of an effort to create an official digital currency in the future," said Christine Lagarde in recent days. Besides, Janet Yellen, former president of the Federal Reserve and now head of the U.S. Treasury Department, took a similar stance. Among the new trends of the near future, cloud-mining could get a foothold: it’s about the possibility of mining cryptocurrencies by renting a small part of the mining capacity of a third party and paying for the actually consumed power. This is also why, Criptomining - an Italian Bitcoin miner based in Milan - is tripling its mining capacity and aims to become a benchmark in the field of shared mining. The issue of consuming electricity to mine Bitcoin appears to some as another restriction to the global spread of the cryptocurrency.

This article originally appeared on Financialounge.com and was translated from Italian to English. It does not represent the opinion of Benzinga and has not been edited.

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