BITCOIN: THE BACKGROUND OF ITS DEVELOPMENT AND USE

Bitcoin: Satoshi Nakamoto’s intellectual property, who published a white paper describing the context of Bitcoin technology on October 31, 2008.

BITCOIN: THE BACKGROUND OF ITS DEVELOPMENT AND USE

In January 2009, Bitcoin version 0.1 was released and soon the first cryptocurrency transactions took place.

BITCOIN: THE BACKGROUND OF ITS DEVELOPMENT AND USE

In October 2009 the Bitcoin exchange rate was set, which was US $ 1 = 1,309.03 BTC. This ratio was based on formulating an equation for the cost of electricity to operate a computer, creating Bitcoin (Salazar, 2017)

BITCOIN: THE BACKGROUND OF ITS DEVELOPMENT AND USE

Bitcoin is as vulnerable as conventional currencies. The constant rise in its price has attracted the attention of criminals, resulting in several Bitcoin accounts being hacked and hacked.

At the beginning of 2013, the Bitcoin market was at a particularly high level and in April the $ 1,000,000,000 benchmark was hit. Thus, Bitcoin is a hot topic and a global topic of discussion in the media (Forexpros, 2015).

In 2014, Elliptic launched the world’s first secured Bitcoin storage service for institutional customers, where all deposits are fully insured.

Later, Overstock.com became the first major online retailer to accept payments in the US using Bitcoin.

In February of that year, Bitcoin was classified as an asset or a prosecution, which means that no VAT is charged on the extraction or exchange of Bitcoin.

In June 2014, the US government auctioned more than 29,000 Bitcoin seized from Silk Road, the illegal online marketplace. The closure and auction of digital currencies on Silk Road helped Bitcoin gain legitimacy, as it turned out that Bitcoin is not the easy way for online criminals to avoid the rule of law.

In July, ‘BitLicence’ comes to fruition as the NewYorkState Department of Financial Services launches the first draft of the agency’s proposed rules for regulating virtual currencies.

The European Banking Authority also publishes its views on “virtual currencies” and recommends that EU lawmakers legislate declaring virtual currency swaps as mandatory in the fight against money laundering and terrorist financing requirements (SecNews, 2015).

The latest application related to the Blockchain feature is the one sponsored by the Bill & Melinda Gates Foundation called Mojaloop. The application was developed by Ripple in collaboration with other technology companies such as Dwolla, ModusBox, Software Group and Crosslake Technologies (Finextra, 2017).

Ripple focuses on sending money worldwide using the Blockchain feature. This way, financial institutions can process their clients’ payments anywhere in the world instantly, reliably and cost-effectively. The company has offices in San Francisco, New York, London, Sydney, India and Luxembourg and serves more than 90 clients worldwide (Ripple, 2017).

Mojaloop can be used to connect customers, merchants, banks, providers and government agencies to an inclusive economy, especially in developing countries. The application offers a way for finance providers, governments and mobile operators to simplify and reduce the cost of developing payment platforms. The use of the app is more for users who do not have bank accounts in poor countries but who can now complete specific transactions as well as save money in electronic wallets (Finextra, 2017).

Bitcoin was, by far, one of the highest performing assets for 2015. Bitcoin rose 35%, surpassing the next high performing real estate, Real Estate Investment Trusts (REITs). , which increased by just 2.8%. Additionally, in the same year, Bitcoin was the best performing currency. The second best performing currency was the Somali Shilling which gained just 15% annually, less than half of Bitcoin growth (Zeiler, 2016).

Pi Crytocurrency Network