Bitcoin is the first cryptocurrency to be created, a digital asset secured with cryptography that can be exchanged.

In August 2008, one Satoshi Nakamoto and Martti Malmi registered the domain name Bitcoin.org. Malmi, a Finnish computer scientist and software programmer, worked with Nakamoto to develop Bitcoin. While Malmi’s identity is known, Nakamoto remains anonymous, leaving people guessing if they were an individual computer programmer or a group of programmers.

Bitcoin was first introduced to the public on January 3, 2009, when its first block was mined. Yes, just like diamonds, Bitcoins need to get “mined”.

In 2010, the first Bitcoin transaction occurred when someone purchased two pizzas for 10,000 Bitcoins. The following year, Nakamoto shared Bitcoin’s source code and domains with the community.

Bitcoin has since become the most well-known and largest cryptocurrency in the world. Its popularity has inspired the development of many other cryptocurrencies.

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Rather than actual human miners doing the job, computers are used to mine Bitcoin to make more of it.

The maximum and total amount of Bitcoins that can be mined is 21 million. At press time, there are more than 19 million Bitcoins in existence—94 per cent of the total amount—according to real-time Bitcoin dashboard Bitbo. 

By mining, Bitcoins are divided into smaller parts with the smallest fraction, called “Satoshi”, after its inventor, being one hundred millionths of a Bitcoin.

The process is akin to solving a complicated mathematical problem with a 64-digit solution that keeps getting more difficult over time to compensate for the growing power of the computer.

Once a problem is solved, one block of the Bitcoin is processed, allowing the miner to get a new Bitcoin. To receive the mined Bitcoin, the user will have to establish a Bitcoin address, acting as a virtual mailbox. As with everything Bitcoin-related, the user’s identity is not attached to the mailbox, keeping the user anonymous.

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Besides mining, you can earn Bitcoins through other means. They can be accepted as a form of payment as long as the system accepts them. To do this, you need to set up a Bitcoin wallet, through which you can track payments and account balance.

You can also earn Bitcoin through trading or exchanges, which allow people to buy or sell Bitcoins. 

As a digital currency, Bitcoins can also be sent to each other using mobile apps or computers, similar to the way we send cash digitally. Unlike actual currency, the value of Bitcoins depends on how much people are willing to exchange it for.

Bitcoin values are unpredictable and volatile, making it a high-risk investment. 

The decentralised nature of Bitcoin has also raised some concerns. While it helps keep transactions private, buyers and sellers can also operate without being easily tracked, which some say can make fraudulent activities done through it difficult to catch. 

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The anonymity it provides also makes issues more difficult to resolve. In 2014, 850,000 Bitcoins worth US$450 million at the time were lost when the Japanese Bitcoin exchange Mt Gox, once the largest of its kind, went bankrupt.

The collapse of another crypto exchange, FTX, in 2022 further pushed governments to urgently regulate the industry.

In Hong Kong, for instance, a licence and registration regime for major crypto-asset intermediaries such as crypto exchanges has been initiated. In Singapore, the country’s central bank regulates crypto players created or operating in Singapore and serving the local market. It requires them by law to adhere to licensing requirements as well as be able to guard against money laundering and terrorist financing.

As crypto regulations develop worldwide, the future of Bitcoin remains to be seen, especially under the Trump administration. 

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