Bitcoin
Bitcoin (abbreviation: BTC[a] or XBT;[b] sign: ₿) is the first decentralized cryptocurrency. Nodes in the peer-to-peer bitcoin network verify transactions through cryptography and record them in a public distributed ledger, called a blockchain, without central oversight. Consensus between nodes is achieved using a computationally intensive system based on proof-of-work called mining. Bitcoin mining requires increasing quantities of electricity[5] and was responsible for 0.2% of world greenhouse gas emissions as of 2022.[6]
Based on a free market ideology, bitcoin was invented in 2008 by Satoshi Nakamoto, an unknown person.[7] Use of bitcoin as a currency began in 2009,[8] with the release of its open-source implementation.[9]: ch. 1 In 2021, El Salvador adopted it as legal tender.[4] Bitcoin is currently used more as a store of value and less as a medium of exchange or unit of account. It is mostly seen as an investment and has been described by many scholars as an economic bubble.[10] As bitcoin is pseudonymous, its use by criminals has attracted the attention of regulators, leading to its ban by several countries as of 2021.[11]
History
Main article: History of bitcoin
Background
Before bitcoin, several digital cash technologies were released, starting with David Chaum's ecash in the 1980s.[12] The idea that solutions to computational puzzles could have some value was first proposed by cryptographers Cynthia Dwork and Moni Naor in 1992.[12] The concept was independently rediscovered by Adam Back who developed Hashcash, a proof-of-work scheme for spam control in 1997.[12] The first proposals for distributed digital scarcity-based cryptocurrencies came from cypherpunks Wei Dai (b-money) and Nick Szabo (bit gold) in 1998.[13] In 2004, Hal Finney developed the first currency based on reusable proof-of-work.[14] These various attempts were not successful:[12] Chaum's concept required centralized control and no banks wanted to sign on, Hashcash had no protection against double-spending, while b-money and bit gold were not resistant to Sybil attacks.[12]
