Bitcoin (Bitcoin) Cryptocurrency

Main article: Cryptocurrencies

Blockchain - bitcoin technology

Main article: Blockchain

Digital currency systems are based on blockchain.

Where do bitcoins come from

The total issue of bitcoins is limited and will not exceed 21 million. By mid-2016, more than half of the cryptocurrency had already been generated.

Bitcoins can be bought on the stock exchange or "mined" (see Mining) by conducting calculations. In the second case, the computer (or data center) of the owner who decides to do bitcoins solves complex mathematical problems, receiving virtual money as a reward. Bitcoins function on the basis of the blockchain system - it does not have a single center and has distribution, which simultaneously ensures reliability and security.

All passing transactions pass through miners: their computers must check the accuracy of the translation using the secret key and information about all new transactions. If confirmation of the operation occurred, the miner previously received a reward of 25 bitcoins for the formation of the block. Every four years, the system reduces the amount of remuneration, and already in 2017 it was exactly half.

At the origins of the creation, miners had enough of an ordinary home computer, then game video cards, but with an increase in capacity, only the owners of special equipment turned out to be capable of generating cryptocurrency^[1].

Estimating the number of bitcoin owners is not just difficult, but impossible in principle. This comes from the basic characteristics of cryptocurrency as such - decentralization, uncontrollability of state regulators and, importantly in our case, anonymity. It is anonymity that does not allow you to get correct statistics. The number of registered bitcoin wallets will also not help, since one person can have an unlimited number of bitcoin wallets.

Price and capitalization of bitcoin

Main article: Price and capitalization bitcoin

Investments in bitcoins

How risky are investments in bitcoins?

Potential investors should understand: bitcoins are not just a risky, but a high-risk asset. On the one hand, bitcoin can be considered as a currency and at the same time as a new payment technology, which appeared during the globalization of the economy as a response to evolution in the field of modern technologies. However, there is still no understanding by what criteria bitcoin should be evaluated and how much it should cost. According to an analysis for the spring of 2017, its price is rising due to high demand supported by a high-tech boom. But the fact that bitcoin and cryptocurrencies in general are not tied to any specific material asset does not allow us to make forecasts of how long the growth will last and when the reverse slope will come. Analysts' opinions on this matter are polar - from rampant optimism to the predictions of another very large bubble in the field of high technology.

With what minimum amount is it worth investing in bitcoins?

One bitcoin can be divided into 100 million parts. As a result, there is no minimum threshold amount for starting the purchase and sale of bitcoins. Generally speaking, this can be an advantage: first, work out the trading strategy on the bitcoin exchange for a small amount, and then decide how much and for how long you are ready to invest.

As with any investment asset, we advise you to follow the well-known rule - "Do not put all your eggs in one basket." Since in this case we are talking about "especially fragile eggs," it hardly makes sense to invest more than 10 percent of free money in bitcoins. However, each investor has its own ideas about the limits of permissible risk...

Buying cryptocurrency

Many won at one time on the fall of the ruble, investing in dollars or euros as a stronger currency. Investors also began to invest in bitcoin, which showed rapid growth from year to year, and many were able to make whole fortunes on this.

Problem

From the beginning to the summer of 2017, the cost of bitcoin increased from $1 thousand to $5 thousand. Analysts predicted with might and main the fall of the currency, which cannot grow endlessly at such a pace. Actually, we saw its instability quite recently. Whether it makes sense to invest in bitcoin today is a big question.

The second point is the emergence of many other digital currencies, their number is already in the hundreds. Bitcoin accounts for about 70% of the capitalization of digital money, but in the future it will fall, and other digital currencies will take its place, according to a team of mathematicians from Europe. Thus, the investor has an alternative in the form of new digital currencies, and now he still needs to figure out which of them is the most promising at the moment.

Decision

One of the alternatives is an exchange game, which allows you to make good money not only on growth, but also on the fall of a particular currency. True, an unprofessional investor is unlikely to immediately manage to do without a consultant. And there are already such in this market. The second option is to invest in new currencies at the time of their release, when they are as cheap as possible, after which it is profitable to resell them. True, this tool also contains certain difficulties.

Bitcoin ETF

Bitcoin ETFs were implemented in the United States in early January 2024.

Mining

Main article: Cryptocurrency mining

• Hidden mining (Cryptojacking)

The process of generating digital coins made it possible to earn investors who managed to catch this topic at the right time. This could be done with a powerful computer at home.

Problem

Competition among miners is high. Having bought an ordinary powerful computer, you will no longer earn much. Miners who started with conventional computers managed to significantly expand in terms of the technological base. New investors are building entire computer farms to make earnings substantial. Moreover, not only private investors are invested here, but also large corporations. Therefore, this tool is no longer suitable for unprofessional players with little capital in its original form.

Decision

Businessmen have found a solution to this problem. There are companies that build mining farms with investor money, and the profits are divided by everyone. It turns out a kind of collective investment. For example, BitClub Network is doing this.

About cryptography and security problems in Bitcoin

Bitcoin is a digital currency that provides users with unique capabilities. The Bitcoin payment system uses a cryptographic and decentralized register. As soon as it appeared, many considered that it was the future of the world of finance, but at the same time, Bitcoin opened the gates for the underworld. On the one hand, governments around the world are striving to ban end-to-end encryption, on the other hand, there is Bitcoin anonymity. End-to-end encryption technology is widely used in consumer software, from Apple iMessage to WhatsApp.

The government wants court-ordered access to personal data to successfully counter terrorism. In this case, the privacy and security of the data of law-abiding citizens are sacrificed. This jeopardizes anonymity - a distinctive feature of the Bitcoin network - and destroys the hopes of cryptanarchists that the Bitcoin protocol will continue to develop in compliance with the principles of true anonymity. If de-anonymization takes on a massive scale, Bitcoin will lose the ability to bypass government requirements and will not be able to provide a "safe haven" for those who do not want Google, Facebook or Amazon to collect personal data.

"Real anonymity in Bitcoin is a myth," said Vijay Michalik, analyst, Frost & Sullivan. - All transactions can be viewed. Although they are only associated with an alias, not a real name or address, each transaction can be viewed using special block circuit browsers. "

Analysis of the block circuit as a relatively new sector of the Bitcoin market demonstrates shortcomings in the use of pseudonyms. The block chain serves as a data source for other financial services that need to comply with regulatory requirements. They collect metadata, minor transaction-related information, and IP addresses associated with nodes, and use that information to identify criminals and blacklist them.

Therefore, financial confidentiality in the full sense of the word does not exist in the Bitcoin block chain. If you do not make changes, this can be a cause for concern. And this is not only about criminals and cryptanarchists. Block chain analysis techniques can be improved. It is believed that huge volumes of addresses can be de-anonymized over time. And when the attackers have separate parts at their disposal, they will easily be able to add them to the full picture. As a consequence, the entire history of your financial transactions will be publicly available forever.

"Most

users' income and expense data will be able to be viewed by anyone, whether they are a friend or colleague, a business partner, a government official or an attacker," adds Vijay Michalik. - Enterprises using the Bitcoin system will also face problems: all information about their cash flows and purchase orders, as well as other important information, will become available to competitors. In this aspect, Bitcoin looks unprofitable against the background of traditional financial channels. "

Despite technical shortcomings, Bitcoin is a powerful tool for payments, transfers, microfinance or circumvention of government requirements for the disclosure of personal data. The secure P2P Bitcoin network provides new opportunities for financial technologies and allows consumers to save money. The comprehensive de-anonymization efforts undertaken by governments will obviously minimize the potential benefits of using the Bitcoin system.

Anonymity is a distinctive feature of Bitcoin. It can become the basis for transformations in business and the financial industry. However, strict regulatory requirements or de-anonymization will put an end to the prospects for such transformations.

Cryptocurrency mining botnet operators use bitcoin blockchain to hide activity

Specialists of the information security company Akamai spoke about a cryptocurrency mining botnet that uses bitcoin transactions to disguise. This became known on February 25, 2021. Read more here.

$13.5m stolen in Bancor platform crypto wallet hack

The decentralized Bancor platform was hacked on July 9, 2018 and immediately after that the developers turned off the platform to avoid heavy losses. Bancor said on its Twitter profile that "wallets were not compromised" and the outage was a forced move.

According to a platform spokesman, although the team managed to block the transfer of approximately 2.5 million BNT tokens - worth another $10 million, the company could not do this earlier, and as a result 25,000 ETH (about $12.5 million), as well as almost 230 million NPXS tokens (about $1 million) were stolen, according to Altcoin^[2].

Thus, the company lost approximately 13.5 million US dollars as a result of the hack. The project is collaborating with dozens of cryptocurrency exchanges to track stolen funds and prevent attackers from selling them.

The FBI has learned to recognize the owners of bitcoins

36-year-old Frenchman Gal Vallerius, arrested by the FBI in 2017, pleaded guilty to selling drugs on the darknet. The FBI was able to identify him from bitcoin transactions. The ^[3].

Vallerius, using the nickname OxyMonster, was an active participant and moderator of Dream Market - a drug market on the darknet.

He formed a kind of "tip can" in his community, through which users could additionally thank him for his services. There is nothing unique about this, many Dream Market members do as well. But usually "tips" pass through the internal transaction system of this market, equipped with an anonymizer. OxyMonster tips, in turn, went directly to specific bitcoin accounts.

According to court documents, FBI agents conducted some kind of analysis of outgoing transactions, and found that 15 out of 17 sent numerous crypto wallets registered behind Gal Vallerius on the resource Localbitcoins.com.

How exactly this was established remains a mystery: there are no details on this in the indictment.

How to safely store bitcoins

Bitcoin wallets can be hacked through cellular network vulnerabilities

Positive Technologies experts in September 2017 demonstrated a scenario for gaining access to other people's bitcoin wallets using the architectural shortcomings of SS7 signal networks (OKS-7). The experiment was carried out on the example of the Coinbase test wallet - one of the largest bitcoin exchanges in the world, managing funds of more than 9 million customers, in whose accounts there are about $20 billion in various digital currencies.

According to Positive Technologies experts, cryptocurrencies offer high transaction speed and transfer security, but the security of the electronic wallets in which this money is stored is a weak point.

During the experiment to hack a test wallet in Coinbase, researchers had enough minimal information about the victim (name, surname and phone number) to get the password from the account and freely withdraw virtual money. By exploiting SS7 vulnerabilities to intercept SMS messages with one-time passwords, experts were able to find out the address tied to email the wallet, seize control over it and gain access to the wallet.

According to Positive Technologies, attacks using these vulnerabilities can be carried out from anywhere in the world, and therefore are of great interest to attackers. In the spring of 2017, the first cases of attacks through SS7 networks to steal funds from bank accounts were recorded in Germany. Cybercriminals intercepted SMS messages with codes for confirming banking operations of customers of the mobile operator Telefonica Germany (O2) and carried out unauthorized transactions.

Exploitation of SS7 signaling networks is only one of several ways to intercept SMS messages. But refusing SMS to forward one-time passwords is not yet possible - this is the most universal and affordable two-factor authentication technology. Therefore, each telecom operator needs to analyze vulnerabilities and systematically increase the level of security of subscribers, - said Sergey Puzankov, head of the consulting group Positive Technologies.

Bitcoin-hosting sites nullify user anonymity

Bitcoin transactions may be anonymous, but Internet users who carry them out may not. This conclusion was reached in the summer of 2017 by scientists at Princeton University on the basis of a study conducted^[4]Finding matches between a user's cookies and their cryptocurrency transactions is so simple that the question arises why such a study is published only now.

According to scientists, very little data is needed to tie Alice to its Bitcoin transactions. It is quite possible to establish the identity of even users of CoinJoin, a protocol designed to protect the privacy of Bitcoin transactions. In theory, CoinJoin makes it impossible to determine the correspondences between input and output.

As the study showed, 53 out of 130 online stores accepting bitcoin transmit payment information to 40 outside companies for advertising, analytics, etc. Worse, many marketplaces transmit transaction data on the blockchain to dozens of third-party trackers.

In total, an analysis of 130 online stores that accept bitcoin showed the following:

• 107 sites transmit certain transaction information to third parties;
• 31 sites allow third-party scripts to access user Bitcoin addresses.
• 104 sites transmit data on transferred amounts (not in bitcoins);
• 30 transmits data on translated amounts in bitcoins.

Users of services like CoinJoin are no better - the sites analyzed by scientists also transmit their information. In total, 49 sites transmit personally identifiable user information, and 38 of them transmit data even to those who use means to protect anonymity^[5].

Found a way to destroy Bitcoin anonymity

Bitfury Group employees have developed a new approach to analyzing bitcoin transactions, proposing to combine the addresses of cryptocurrency wallets associated with one user into clusters. As indicated in the publication of the company itself, the new solution "will help identify the relationship between the addresses of bitcoin wallets, which will minimize data errors and ensure increased accuracy in determining the ownership of such addresses during criminal investigations." "In addition, this decision will tell end users how to protect their privacy," the developers point out^[6].

From the text of the Bitfury press release, it follows that their tool allows you to actually de-anonymize Bitcoin users, or at least reliably associate all wallets of the same user with each other.

Clustering the addresses of Bitcoin wallets is a process that allows you to de-anonymize cryptocurrency users by determining all their addresses through the analysis of data and blockchain itself, and information outside it (primarily open data posted off the Web). The new Bitfury method is said to combine information in such a way as to minimize the number of errors, especially compared to previous methods that use information only from the blockchain.

Bitcoins in Russia

Main article: Bitcoin (Bitcoin) in Russia

Bitcoins in Italy

Main article: Bitcoin in Italy

2024

First place in terms of capitalization among cryptocurrencies

As of the beginning of December 2024, the rating of the ten largest cryptocurrencies by capitalization is headed by Bitcoin with a result of about $1.9 trillion. The global cryptocurrency market continues to actively develop, as stated in the Forbes article published on December 3, 2024. Read more here

Entering 42% tax on bitcoin revenues

In mid-October 2024, it became known about Italy's decision to raise the tax on income from bitcoins from 26% to 42%. In addition, the government plans to abolish the minimum income requirement of 750 million euros for digital services tax.

Earlier, the Italian Senate increased the tax on income from trading cryptocurrency assets in the amount of over 2000 euros to 26% within the framework of the approved budget for 2023. The new tax increase will be the first in two years and is associated with growing social spending and the country's budget deficit. The Italian government suggests that owners of bitcoin and other digital assets are members of a robust middle class and can afford to share some of the revenue with other citizens.

Italy introduces 42% tax on bitcoin revenues

According to Deputy Finance Minister Maurizio Leo, the country's government decided to take such a step, taking into account the fact that "the bitcoin phenomenon is spreading."

The Bloomberg article says that previous attempts by the authorities of other states to tax this area sometimes backfired. Thus, India "introduced onerous fees for digital assets only to see how trade volumes are shrinking as local investors move offshore," the agency said.

The CEO of the cryptocurrency company Tether Paolo Ardoino, a native of Italy, commented on the sharp increase in the rate for bitcoin investors with a well-known Internet meme, hinting at the possible outcome of the crypto business from the country.

His compatriot, Ava Labs (Avalanche) operations director Luigi D'Honorio Demeo, wrote one word: "Tin." ^[7]

Bitcoin in the United States

Main article: Bitcoin in the United States

In the world

2024

Bitcoin has become the official currency in Honduras

On January 5, 2024 Honduras , the Prosper Special Economic Zone, located on the island of Roatan, was officially recognized bitcoin as a settlement unit. This allows you to use cryptocurrency as a monetary means to measure the market value of various goods and services. More. here

2023

Miners around the world mined a record volume of bitcoins in a day

On November 12, 2023, miners around the world set an annual record for the volume of mined bitcoins - approximately $44.17 million (in the form of block rewards and transaction fees). This is the maximum figure since April 21, 2022, when bitcoin miners earned approximately $44.5 million during the day. More. here

Who owns the most bitcoins

As of the end of September 2023, the cryptocurrency exchange Coinbase stores approximately 5% of existing bitcoins. This is comparable to the total assets of wallets, which are associated with Satoshi Nakamoto, the creator of bitcoin. Such data was released on September 23, 2023 by Arkham Intelligence, a developer of an address tracking service and visual representation of data in. blockchains

The study says that in 36 million wallets owned by Coinbase, bitcoins worth approximately $25 billion are concentrated by this date. We are talking about both "hot" and "cold" wallets. At the same time, about 10 thousand bitcoins are stored in the largest of the discovered "cold" wallets, which is equivalent to $265 million (as of the end of September 2023). Additionally, according to analysts, Coinbase stores approximately $2.6 billion in Ethereum cryptocurrency.

Arkham Intelligence emphasizes that by the end of 2023, Nakamoto's personality and the size of his bitcoin assets remain a mystery. It is believed that between January and July 2009, he mined a total of more than 1 million coins. Tracking them is a very difficult task, since they are distributed to numerous addresses.

Among other large bitcoin holders, Arkham Intelligence names the exchange, Binance as well as the Grayscale Bitcoin Trust. In addition, the governments and USA , China on the wallets of which about 400 thousand bitcoins are stored, are mentioned. At the same time, the assessment of the ownership of certain wallets, according to market participants, is not always reliable.

The markup of cryptocurrency addresses belonging to a particular exchange may not coincide with different analytical services, which is associated with different sources of obtaining such information, "RBC quotes Grigory Osipov, director of investigations at the Shard cryptocurrency asset security service.[8]

Bitcoin in Nigeria costs 64% more than in the world

At the end of January 2023, it became known that the cost of bitcoin on the popular Nigeria NairaEX exchange in terms of local currency jumped to $38,935, which is 64% more than in the rest of the world. The discrepancy is due to the limit imposed by the Central Bank of Nigeria on withdrawals from ATMs.

According to the order of the Central Bank of Nigeria, the daily limit in equivalent was $217 and $43.5 one-time. High commissions are provided for exceeding. It comes as the regulator continues to impose restrictions on cash withdrawals at ATMs amid ongoing efforts to accelerate the transition to a cashless society and a national cryptocurrency.

From January 9, 2023, Nigerian citizens are allowed to withdraw no more than 20 thousand naira (about $43) per day from ATMs, and the weekly limit is 100 thousand naira (about $217). The move came before the introduction of new naira banknotes on January 6, 2023, with the aim of curbing inflation and money laundering. Nigeria's central bank has set a deadline of 24 January 2023 for Nigerians to exchange their older higher denomination notes for the new currency. The regulator said customers should be encouraged to use alternative payment options, including mobile banking and digital currency.

However, from January 10 to January 25, 2023, long queues and complaints were formed about the lack of time in the branches of Nigerian banks to meet the deadline. The Central Bank of Nigeria moved that date to 10 February 2023. As a result of the measures introduced, a premium of the dollar exchange rate on the "black market" was formed relative to the value set by the regulator.^[9]

2022

Almost 90% of all bitcoins are outside crypto exchanges

Almost 90% of all bitcoins as of December 2022 are outside crypto exchanges. This is the maximum outflow over the past three years amid a confidence crisis following the bankruptcy of the FTX exchange.

Three quarters of those who invested in bitcoin are in the red

On November 14, 2022, the Bank for International Settlements (BIS) released the results of a study that suggests that three quarters of Bitcoin investors are at a loss.

The BIS report covers 95 countries around the world; analyzed data from 2015 to 2022. It is said that the overwhelming number of downloads of the cryptocurrency application occurred when the price of bitcoin exceeded $20 thousand. If we assume that in the first month after installing the program, each new user purchased bitcoins worth $100, then 81% of these investors were in the red.

It is noted that bitcoin reached a maximum of almost $69 thousand in November 2021, in the midst of speculative madness amid the pandemic. Since then, the value of the world's largest cryptocurrency has collapsed by about 75% due to a sharp tightening of monetary policy and a series of major collapses in cryptocurrency companies. In addition, two other events had a negative impact on the market: the suppression of cryptomining by the Chinese authorities in mid-2021 and social unrest in Kazakhstan in early 2022.

According to the study, about 40% of all bitcoin holders are men under the age of 35. As for the gender distribution as a whole, representatives of the strong half of humanity account for more than 65%.

The results of the study suggest that investments in cryptocurrency in current realities can be very controversial. BIS believes that the crypto-eco system is one of the most risky investments. Moreover, these digital assets are still not recognized as a global payment method. On the other hand, Bitcoin still attracts retail investors: contrary to the opinion of BIS, they show more interest in cryptocurrency, regardless of the current situation.^[10][11]

The largest holder of bitcoins on the planet is the Chinese government - 194 thousand

The largest holder of bitcoins on the planet is the Chinese government, cryptanalysts found out in November 2022. In 2019, the Chinese authorities confiscated 194 thousand bitcoins, 833 thousand ethers and other coins as a result of an investigation into PlusToken fraud.

62% of bitcoin production is carried out on gas and coal

On September 27, 2022, a study was published according to which almost two-thirds of the energy worldwide used to mine bitcoin is produced using fossil fuels. Read more here.

Equating bitcoin with money turned out to be a failure for El Salvador

At the end of June 2022, the government's cryptocurrency treasury was halved, the introduction of bitcoin throughout El Salvador is not gaining momentum, and the country needs a lot of cash to fulfill debt payments in the amount of more than $1 billion in 2023. This happens against the background of a drop in the price of bitcoin by more than 70% from the peak reached. Read more here.

The rollback of the bitcoin exchange rate to the level of 2020

The bitcoin exchange rate rapidly collapsed to the level of the end of 2020. This became known on June 14, 2022. According information to the profile resource Coindesk, it fell up to $20.83 thousand. This price is calculated by CoinDesk based on the XBX index - the spot rate of bitcoin. The index value is calculated based on the observed trade activity on the largest. cryptoexchanges

Thus, the main cryptocurrency in the world set another anti-record for the rate of depreciation, given the fact that in November 2021 its price reached $68.99 thousand. This was the highest exchange rate since the advent of bitcoin in 2008.

Having collapsed down, bitcoin, according to a long-established tradition, dragged all the other more or less significant cryptocurrencies along with it. On June 13, 2022, he himself fell in price by 15% in just a day, while Solana fell in price by 19%. Ethereum, Avalanche and Dogecoin fell even more rapidly - in 24 hours they lost 20% of their value.

The total capitalization of the cryptocurrency market is also extremely far from its maximum values. Like the bitcoin exchange rate, compared to November 2021, it decreased by about three times - from more than $3 trillion to less than $1 trillion (CoinGecko statistics). Analysts cannot yet predict when and at what level this fall will stop.

In yet another rapid impoverishment of crypto investors, some believe that American regulators are to blame. The US Federal Reserve System (FRS) can prepare very tough measures to combat inflation in the country, which in May 2022 turned out to be the maximum over the past 40 years.

Back in early May 2022, the Fed raised federal bonds by 50 basis points at once, which happened for the first time since 2000. This decision of the regulator, as well as the collapse of the Luna cryptocurrency in May 2022 and the expectation of new tough measures to combat inflation, forced traders to start massively getting rid of virtual money, which led to their rapid depreciation.

As for Luna, it is directly related to the TerraUSD stablecoin, which was tied to the fiat. In USD mid-May 2022, it instantly depreciated to zero after losing this binding. Before the collapse, its price reached $100. According to analysts, what happened led to the total losses of investors, measured in billions. dollars USA

The crushing collapse of the cryptocurrency exchange rate may be the beginning of large-scale changes in the global token market, which was predicted by analysts in early June 2022. It consists in reducing the total number of virtual currencies from the current 19 thousand to only a few dozen.

According to experts, in this redistribution, completely unknown tokens will disappear first, and then a little more popular. As a result, only the most popular cryptocurrencies will remain.

When this happens, analysts do not yet undertake to say. Meanwhile, bitcoin has recovered a little after the fall. At 12:20 on June 14, 2022 in Moscow, its exchange rate rose to $22.54 thousand^[12] to^[13].

Depreciation amid US stock market crisis

Central African Republic approves bitcoin as legal tender

At the end of April 2022, the Central African Republic approved bitcoin as legal tender. The state became the first country in Africa to recognize bitcoin as a legitimate payment currency to help the country's economic recovery. more detailed here.

2021

The earnings of all bitcoin miners are estimated at $15 billion

Total earnings miners bitcoin in 2021 reached $15 billion, an increase of 206% compared to 2020. This was announced at the end of December 2021 by analysts at The Block Research. More. here

Taproot Network Update: Smart Contracts Launch

On November 14, 2021, the most important update of the Taproot network was activated on the Bitcoin network (the first update in the last four years).

• Transaction confidentiality has increased. The amount of commission for conducting transactions has decreased.
• Increased privacy, efficiency and reduced costs when using Lightning Network channels.
• In addition, blockchain capabilities have expanded by using smart contracts similar to those used in Ethereum smart contracts. The cost of smart contracts has decreased and their creation has been simplified.

Bank in Israel refuses to credit her income from investments in bitcoin to the pensioner's account

Israel's largest bank Apoalim in November 2021 refused to credit the income of a 69-year-old pensioner, which she received from investments in bitcoin, to the account.

Esther Freeman wanted to deposit $320 thousand into the account, which she received by investing $3 thousand on the advice of her sons in BTC about nine years ago. Read more here

The new mayor of New York began to receive a salary in bitcoins

In early November 2021, the elected mayor of New York, Eric Adams, announced that he would receive his first three salaries in bitcoins. He also noted that he planned to make his city the epicenter of the crypto industry in the country. Read more here.

Walmart installs terminals in stores for buying and selling bitcoins with a large commission

In October 2021, Walmart began installing terminals in its supermarkets for the purchase and sale of bitcoins. The commission for operations turned out to be very high. Read more here.

Western Union losses from the legalization of bitcoin in El Salvador are estimated at $400 million per year

In mid-September 2021, it became known that the legalization of bitcoin in El Salvador could cost Western Union $400 million a year. Read more here.

McDonald's in El Salvador began selling food for bitcoins

On August 7, 2021, it was reported that McDonald's began accepting payments in bitcoins (BTC) through the Lightning Network. Journalist Aaron van Virdum reported this after visiting a McDonald's restaurant in El Salvador, where he was presented with a printed QR code directing him to the Lightning Network. McDonald's has about two dozen restaurants in this Latino country. Read more here.

The sponsor of the European football club PSV will pay him in cryptocurrency

In mid-August 2021, the Dutch top-level football club PSV Eindhoven entered into a partnership deal with the local cryptocurrency trading platform Anycoin Direct, which will pay the club an undisclosed amount of bitcoins as part of a new sponsorship deal. Read more here.

Xiaomi officially began selling smartphones for cryptocurrency

In early August 2021, Xiaomi officially began selling smartphones for cryptocurrency. This was announced by the official seller of the Chinese tech giant in Portugal, Mi Store Portugal, which decided to accept payments in bitcoin. Read more here.

The authorities of El Salvador distribute bitcoins to residents just like that

At the end of June 2021, President Salvador Nayib Bukele announced that every adult citizen of the country will receive bitcoins for 30 dollars when loading and registering on a government application to work with. cryptocurrency Thus, El Salvador will make bitcoins legal tender. The government also hopes that the massive use of cryptocurrency will help attract investment to the country.

In a nationwide address, Bukele said that the "bitcoin law" will come into force on September 7, 2021. The president dismissed widespread concerns that bitcoin use could become a mandatory and sole means of payment in El Salvador, explaining that the country would use cryptocurrency on par with the US dollar as legal tender. Salaries and pensions will continue to be paid in dollars, he said, and any citizen paid in bitcoin "can choose to automatically receive a dollar transfer."

Bukele also clarified that the adoption of bitcoin as legal tender would not repeat the model of accepting the dollar in 2001 - at the time, bank accounts were mandatory to convert the former Salvadoran colon currency into dollars. The president reiterated that one of the key goals of the law is to help people working abroad who send remittances to El Salvador, as such payments suffer from high transaction and commission costs.

In order to get an asset, a citizen of El Salvador only needs to create an account in the national bitcoin wallet Chivo. It is reported that buyers will be able to pay with bitcoins for goods whose prices are indicated in dollars, the transfer will be carried out by the bank automatically taking into account the current rate. At the same time, bank accounts opened in dollars will remain in this currency.^[14]

Goldman Sachs criticized Bitcoin investment value

In a new report in June 2021, Goldman Sachs criticized Bitcoin's investment value and said cryptocurrencies had no long-term value and were not an asset class.

"After reviewing the different valuation methodologies and applying our multi-factor strategic asset allocation model, we concluded that cryptocurrencies are not a viable investment for our clients' diversified portfolios."

The authors of the report also doubted that the status of "digital gold" benefits Bitcoin: "The thesis that Bitcoin is a digital version of gold does not give it value, since gold in itself is not a consistent or reliable storage of value."

The report also opined that blockchain itself was not credible, cryptocurrencies and blockchain technology were "built on layers of trust that could be undermined."

El Salvador approves Bitcoin as legal tender

Salvadoran President Nayib Bukele plans to pass a law that would make his country the first sovereign state in the world to adopt Bitcoin as legal tender.

In a video broadcast of a large-scale conference in June 2021 in Miami Bitcoin-2021, which was announced as the largest event in the crypto industry in history, the president announced El Salvador's partnership with digital wallet company Strike to create the country's modern financial infrastructure using Bitcoin technology.

El Salvador's central bank will also accept Bitcoin as part of its reserves, while citizens will be allowed to freely transact with the main cryptocurrency.

$140 billion bitcoins stuck on wallets due to forgotten passwords

In mid-March 2021, the analytical company Chainalysis announced that about $140 billion was stuck in bitcoin accounts because their owners had forgotten their passwords. These funds make up almost 20% of the total cryptocurrency.

The fact is that programs for working with cryptocurrencies use a complex algorithm to create a login and a password associated with it. This data is known only to the account holder, which allows you to use your online wallet without passing identity checks and registration with financial institutions. But it is impossible to recover or reset the password under such conditions.

According to Chainalysis, of the existing 18.5 million bitcoins, about 20%, which reached a value of $140 billion at the beginning of 2021, are stored in online wallets, the owners of which have lost access to them. Wallet Recovery Services, a digital key recovery service, said that with the growing cost of bitcoin, the number of requests to help return access to cyber wallets began to grow. In January 2021, up to 70 people a day began to contact the company, three times more than in December.

Bitcoin owners with blocked wallets spend days and nights thinking about how to access their condition. Many bought cryptocurrency in the early days of Bitcoin, when no one knew whether this project would take off. Now some turn to hackers via the dark web, but this method is not safe, as a cracker can easily steal cryptocurrency. Others attract cryptocurrency hypnotists, with the help of which they hope to remember the password from the wallet if they invented it on their own, or find a paper or electronic medium with access codes generated by a third-party service.^[15]

The programmer offered the city authorities $70 million for help in finding an accidentally discarded hard drive with 7,500 bitcoins

In mid-January 2021, it became known about the appeal of James Howells for help to the authorities of Newport (Wales). A British IT specialist offered 52.5 million pounds sterling ($71.7 million) to help him find a randomly discarded hard drive that stores 7,500 bitcoins. Read more here.

2020

A third of bitcoins are under the control of 10 thousand investors

About a third of bitcoins by the end of 2020 were under the control of 10 thousand investors. This is stated in a report published by the National Bureau of Economic Research (NBER) at the end of October 2021.

The authors of the work - Igor Makarov (London School of Economics) and Antoinette Shoar (Massachusetts Institute of Technology) - have developed a set of algorithms that allows you to determine the forms of ownership in the bitcoin market by address. On their basis, they found that at the end of 2020, intermediaries, for example, crypto exchanges, controlled about 5.5 million bitcoins (about a third of cryptocurrency in circulation), individual investors combined - about 8.5 million bitcoins.

According to the study, the thousand largest individual investors controlled about 3 million bitcoins. The researchers note that the concentration of cryptocurrency is most likely even higher, since some companies and individuals can own the cryptocurrency of one ultimate beneficiary.

Also, experts found that 10% of miners at the end of 2020 controlled 90% of the world mining capacities of Bitcoin, and 0.1% (about 50 miners) control half of the capacities.

The researchers emphasize that the bitcoin ecosystem is still dominated by large players. Because of this, there are systemic risks - high concentration makes the market vulnerable to an attack, as a result of which a group of miners will be able to gain most of the control over it. In addition, the current situation may lead to the fact that the benefits received in the future from the introduction of cryptocurrency will mainly fall on a disproportionately small group of market participants, the researchers say.

The NBER calculated that the concentration of bitcoin and mining capacity in one hand is decreasing after a sharp increase in the price of cryptocurrency. This means that the vulnerability to a "51% attack" becomes higher when the price of bitcoin falls.^[16]

Morgan Stanley: Bitcoin will oust the dollar

In early December 2020, the chief strategist and head of the emerging markets group Morgan Stanley Investment Management, Ruchir Sharma, was optimistic about the long-term prospects of bitcoin, arguing that the token may still be able to "replace the dollar as a means of exchange."

Until recently, most economic experts dismissed talk that bitcoin could displace the dollar under a certain scenario as decidedly fantastic. But the latest news from the exchange convinced even more conservative financial analysts.

In his opinion piece for the British Financial Times edition, Ruchir Sharma wrote that "we have reason to believe that [the last] bitcoin fever has deeper roots." Sharma also added that " dollar dominance is likely to end when the rest of the world loses absolute confidence in solvency." USA

Sharma added that attempts to ban bitcoin or use old "money printer" tactics, thereby helping fiat currencies such as the US dollar weather a looming global recession, could end up being futile.

Bitcoin's rise may still prove to be just a bubble, but even if it bursts, the skyrocketing of cryptocurrencies this year should serve as a warning to governments around the world, especially in the United States.<...> Don't think your traditional currencies are the only means of saving or exchanging that people will ever trust. Tech-savvy people are unlikely to stop looking for alternatives until they find one. And intervening in the regulation of the digital currency boom, which some governments are already thinking about, can only accelerate this rebellion.[17]

Negative experience of investing Masayoshi Son in bitcoin

In mid-November 2020, Softbank CEO Masaesi Son admitted that he "does not understand bitcoin," and that he spent a significant part of his time tracking the price charts of cryptocurrency during the period of investing in it. Read more here.

The largest transfer in the history of bitcoin for $1.15 billion

In October 2020, an unknown person, the owner of the third largest bitcoin wallet, carried out the largest (in terms of dollars) bitcoin transaction - 88,857 BTC ($1.15 billion). The wallet was created on August 6, to which transfers began to arrive. Only $3.54 was paid for the transfer of more than a billion dollars. This is another evidence of the advantage of bitcoin over the traditional financial system, where such a transfer would be almost impossible without thousands of costs.

Blockchain company released a tool to cancel operations with bitcoins

At the end of June 2020, the Israeli blockchain startup Kirobo, founded two years earlier, released a tool to cancel operations with bitcoins. It was named Retrievable Transfer. Thus, the company found a way to solve the problems associated with human errors in cryptocurrency transactions. Read more here.

In Switzerland, public services can now be paid with bitcoins

At the end of January 2020, it became known that residents of the Swiss city of Zermatt, a famous ski resort, will be able to pay taxes in bitcoins. According to Mayor Romy Biner-Hauser, 5,400 residents of the city will be able to pay bills for taxes and other government services, such as a work permit, using cryptocurrency. Read more here.

2019

Bitcoin study included in school curriculum in France

In November 2019, it became known that the study of Bitcoin was included in the school curriculum in France. The corresponding subject will be taught within the framework of the program in economic and social sciences.

The French Ministry of Education hopes that knowledge of cryptocurrency will allow students to better understand the essence of money, as well as the difference between ordinary and digital currencies.

At the same time, the lessons will not be thoroughly disassembled, limiting themselves to general concepts and topics. A basic course has been developed so that students learn the concept of decentralization in the context of traditional financial systems.

Four educational videos dedicated to bitcoin were created for schoolchildren. One of them is devoted to questions about what Bitcoin can supplant the euro and whether it deserves attention as the currency of the future.

France is known for its positive attitude towards bitcoin and blockchain technologies. Thus, the country plans to make this cryptocurrency an official means of payment for more than 25 thousand retail stores of clothing, jewelry and perfumes.

In November 2019, the French central bank published vacancies in the position of analyst and development engineer in the field of blockchain. The description of the analyst's vacancy says that the specialist will work in the financial stability department and should have experience in the field of cryptocurrency economics, as well as with open and closed blockchains. The bank is also looking for a development engineer to explore the possibilities of applying blockchain to key banking functions.

Earlier, the Central Bank tested the digital identification system, during which the blockchain was used to manage indicators used to identify creditors in the Unified European Payment System (SEPA).^[18]

Opera allows you to pay directly with bitcoins

On October 22, 2019, Opera announced the release of an updated version of the Android browser equipped with a built-in bitcoin wallet. Read more here.

Watford Football Club placed the bitcoin logo on the form

On September 12, 2019, it became known that Watford a symbol was placed on the uniform of the players of the English Premier League team. bitcoin The club began selling goods for. cryptocurrency More. here

How exactly money is laundered through bitcoins

In late August 2019, Kunal Kalra, a 25-year-old man from Westwood, Los Angeles, pleaded guilty to laundering $25 million through cryptocurrency. This is the first federal criminal case in the United States against a business of laundering funds using a bitcoin exchanger. Read more here.

A fifth of bitcoins have been without movement for 5 years

At the end of July 2019, the analytical portal Coin Metrics published data according to which a fifth of bitcoins have been motionless for five years. The share of such coins from the total number is 21.6%, that is, 3.8 million BTC. This is a new record, and it is not yet known whether the popularity of bitcoin will continue to fall in the future.

The share of unused coins has grown steadily since mid-2015: the share of bitcoins that have been on wallets without movement for more than six months has reached 12.5 million BTC, and those that have not been used for more than one year - 10 million BTC. The number of coins that have not been operated on for about two years is 6 million.

The findings suggest that bitcoin is steadily becoming more of a means of accumulating value than a means of payment. Adaptive Fund partner and cryptanalyst Willy Woo expresses concern that the lack of bitcoin circulation could lead to lower volatility, which will make cryptocurrency exchange rate fluctuations comparable to the behavior of assets in the traditional market, for example, gold.

Willy Wu also fears that the concentration of a large number of bitcoins in the hands of a small group of people will make them "new bankers." Given that the number of bitcoins is limited, and large institutional investors have regularly bought cryptocurrency since 2018, its concerns may not be unfounded.

However, some analysts, such as Tuur Demeester, believe that the situation is not as deplorable as it may seem at first glance. He notes that as the price of bitcoin grows, the number of inactive coins will also grow, and confusion at the legislative level motivates investors to transfer their funds to bitcoin as the most stable currency.^[19]

How Venezuela uses bitcoin to bypass US sanctions

In late July 2019, Spanish publication ABC discovered that Venezuelan President Nicolas Maduro and his administration were using cryptocurrency to circumvent US economic sanctions. At the same time, the government uses bitcoin, and not El Petro's own national digital currency. Read more here.

SoftBank founder lost $130 million on bitcoin investments

On April 23, 2019, it became known about the large losses of Masayoshi Son - $130 million - from investing in bitcoin. Read more here.

2018

A protocol has been created to exchange bitcoin for "ether" and vice versa

On October 24, 2018, the first open source blockchain system was launched using the new Open Federated Gateway Protocol (OFGP), which is designed to conduct transactions between bitcoin and Ethereum networks using a special token. Read more here.

Which cities have the most outlets that accept bitcoin

According to Coinmap, as of September 16, 2018, there are about 13,150 sites, stores and ATMs hosting bitcoin worldwide, and their number has been steadily growing since the end of 2013. Now almost everywhere you can book a flight or hotel by paying for a trip or a bitcoin stay - and yet in some cities there are more such outlets than in others.

Most of the sites that accept Bitcoin are located in Prague, the homeland of SatoshiLabs, the manufacturer of the hardware wallet Trezor. Here bitcoin can be used in 152 institutions to rent apartments, pay for food and drinks in various bars and restaurants, or even to visit a crypto-friendly cinema. However, by the end of 2017, the Ministry of Finance introduced an anti-money laundering law, partially limiting Bitcoin. Local crypto exchange points are required to identify customers so they can no longer "hide under fake names or nicknames."

In San Francisco, there are about 120 places that accept cryptocurrency. It is here that the famous "crypto castle" is located, Crypto Castle is a mecca for people dreaming of joining the ranks of cryptomillionaires. In fact, San Francisco is so developed in terms of cryptoinfrastructure that even a local federal court allows bail paid in bitcoins.

Buenos Aires was unofficially named the capital of Bitcoin in Latin America. The number of sites accepting Bitcoin here reaches 140, according to Coinmap, and Buenos Aires is among the top three along with San Francisco and Prague. According to a local source, Buenos Aires has a bitcoin-based publishing and taxi service, not to mention the many specialists who accept bitcoin for their services - photographers, designers, psychologists and IT specialists.

There are also many outlets that accept Bitcoin in Tokyo, Berlin and Malta.^[20]

The first bitcoin ATM in Europe has been launched

In June 2018, the first ATM was launched To Europe cryptocurrency. It was located at the Schiphol airport in, according Amsterdam to a statement on the air harbor website.

The device is designed to exchange euros for bitcoins and ethers. It will be tested for six months, after which the initiators of the project will decide whether passengers need such equipment.

Schiphol strives to continuously innovate and provide optimal passenger service. We hope that the opportunity to easily exchange "local" euros for "world" cryptocurrencies will be useful for them. This may be beneficial, for example, if the passenger's country has a different currency than the euro, "said Tanja Dik, director of consumer products and services at the airport.

The airport administration suggests that the cryptocurrency exchange service will be useful for travelers who cannot spend the euros remaining after the trip in their country.

The Bitcoin ATM is located in the second arrival hall, as well as in the corridor leading to the first and second departure halls.

The project of exchanging euros for cryptocurrencies was implemented by Schiphol Airport together with the Dutch company ByeleX Data Solutions, which helps customers integrate payments in cryptocurrencies.^[21]

In addition to Schiphol, bitcoins can be bought at airports in Japan and Australia. Earlier in 2018, Brisbane Airport also announced plans to create conditions to pay for cryptocurrency purchases at outlets throughout the terminal.

By the end of 2017, the number of bitcoin ATMs in the world exceeded 2 thousand, doubling compared to the previous year. Most of these exchangers are located in the United States. In June 2018, such an ATM was launched in Kenya, it issues bitcoins for dollar cash or for the national Kenyan currency.

Bill Gates called bitcoin one of the most speculative things

Microsoft founder Bill Gates openly criticized Bitcoin, saying in an interview with CNBC on May 7, 2018 that the first cryptocurrency and ICO represent "some of the craziest and most speculative things." Read more here.

Iran's Central Bank bans banks from using cryptocurrency

The Central Bank of Iran has banned credit institutions from using bitcoin and other digital currencies. "The use of bitcoin and other digital currency in all money centers and financial institutions of the country is prohibited," the press service of the Iranian regulator quoted Vedomosti as saying.

The decision to ban cryptocurrencies was made at the end of 2017, but the order has been published only now, the press release says. This move was made due to the fact  that the crypto currency can be used for "money laundering and financial support of terrorism."

G20 refuses to regulate cryptocurrencies

Finance ministers of G20 countries, gathered at a meeting in Argentina, refused calls for regulation of the global cryptocurrency market. Instead, they intend to closely monitor the development of this sector^[22] to^[23] cryptocurrencies].

The failure to agree on the introduction of drastic measures reflects a divergence of views among G-20 members on what the right policy on the issue should be. While Germany France they demanded the introduction of strict measures to protect the population and tighten the screws on crime, other countries, for example, Brazil made it clear that they would not follow the recommendations of the G20.

Having agreed with the remoteness of the prospect of risks to financial stability, the G20 members in their final protocol only called for the development of international standards in order to create bodies whose task will be "to continue monitoring crypto-assets and related risks.... and assessing multilateral response measures when such need arises. "

Noting that crypto assets are associated with the emergence of problems of concealment of taxes, money laundering and financing of terrorism, G20 members pledged to implement future standards in cooperation with the Group for Combating Money Laundering and Financing of Terrorism.

In addition, data collection continues, on the basis of which future policies will be developed. Discussion of the results is scheduled for July 2018.

The opinion of the head of Twitter about Bitcoin

On March 21, 2018, the co-founder and head of Twitter, Jack Dorsey, said that in ten years, and possibly earlier, one cryptocurrency will remain in the world, and it will be bitcoin. Read more here.

KFC in Canada accepts bitcoins

In January 2018, KFC began accepting bitcoins to pay for orders. By the time the pilot project is launched, only one dish can be paid for with cryptocurrency. Read more here.

2017

For the first time in history, the bitcoin exchange rate exceeded $10 thousand.

On November 27, 2017, the bitcoin rate at many exchange sites in South Korea for the first time in history exceeded $10 thousand. So, on the Coinone and Korbit exchanges, cryptocurrency costs about $10,108 and $10,047, respectively. On Bithumb - the largest South Korean stock exchange in terms of trading volume - bitcoin reached $10,052.

According to CoinMarketCap.com, by November 27, 2017, most global bitcoin exchanges estimate the value of cryptocurrency in the range of $9,500 and $9,700. CoinDesk's Bitcoin Price Index (BPI) reports an average value of $9 624.90, which corresponds to an increase in price by almost $300 per day.

The daily turnover of the Bithumb exchange more than doubled after the Financial Supervision Service of South Korea (FSS) announced that the department does not plan to regulate cryptocurrency trading, as well as the activities of crypto exchanges in the country, considering cryptocurrencies as speculative assets.

Bitcoin's rapid growth was also facilitated by the fact that the second largest commercial South Korean bank Shinhan announced the start of testing the bitcoin wallet and related services.

Bitcoin has been strongly influenced by the high demand for crypto exchanges. Asia Sales of the Japanese yen in bitcoin account for about 62% of the total volume of exchange transactions, according to CryptoCompare. The growth rate of prices has cryptocurrency steadily increased as bitcoin has gained more and more popularity in, Japan where in the spring of 2017 bitcoin was legalized, and the acceptance of deposits in cryptocurrency began, and the practice of using cryptocurrency as a means of payment in stores is becoming increasingly widespread.

Such a jump in the value of bitcoin, like other cryptocurrencies, led to the fact that in November 2017 the total market capitalization of the cryptocurrency market for the first time exceeded the $300 billion mark at the end of November 2017.^[24]

China bans trading in bitcoins

The Chinese authorities intend to close all exchanges in the country where bitcoin can be exchanged. The Central Bank of China has already drawn up a draft instruction that prohibits local platforms from having cryptocurrency trading services, the Wall Street Journal reported in September 2017, citing anonymous sources^[25].

Since the beginning of the year, Chinese regulators have been investigating the cryptocurrency market in the country, the newspaper reports, and for some time the authorities have been thinking about introducing rules aimed at stopping money laundering. According to a Wall Street Journal source, the decision to close the exchanges was made due to "too much disorder" in this area.

"The Big Mess"

The situation with cryptocurrencies in China became seriously complicated when bitcoin rose sharply, as this increased the risk of speculation from Chinese investors. According to analysts and investors, one of the reasons for the growth of Bitcoin last year was that the Chinese began to use coins as a way to bet on the fall of the yuan.

ICO ban

On September 4, the People's Bank of China announced on its website the completion of an investigation into the initial placement of cryptocurrency tokens (Initial coin offering, ICO). According to the regulator, more than 90% of ICOs are potential violators of laws on illegal financing and countering financial fraud. The share of projects attracting funds for investment does not exceed 1%, representatives of the Central Bank of China said.

According to the official position of the Central Bank, all ICOs in the country from that day began to be considered illegal. The regulator intends to severely punish such violations in the future. At the same time, he threatened legal consequences for the ICOs already completed. Despite the strict ban on ICO, the corresponding statement of the Central Bank of China did not mention existing cryptocurrencies, such as ether (Ethereum) or bitcoin.

The cryptocurrency market met the news of the ICO ban in China extremely negatively. Bitcoin, according to Coindesk, fell 5% in trading, and ether lost 15% of the price.

Australian police blamed Bitcoin for rising financial crime

The development of online banking and the emergence of cryptocurrencies are the main reasons for the massive growth of organized crime in the Australian financial sector, according to the country's police intelligence specialists.

A report released this week by the Australian Criminal Investigation Commission (ACIC) said money laundering and other financial crimes committed by major criminal gangs cost the country more than $28.43 billion annually. USAPon ^[26].

The Australian authorities are especially concerned that e-commerce enterprises and bitcoin exchanges make life easier for organized crime due to the lack of transparency of transactions and the use of encryption, which as a result opens up opportunities for criminal activity and tax evasion.

"Bitcoin, which can be traded anonymously and which is no worse than cash, is now circulating on the most famous international exchanges," said Justice Minister Michael Keena.

The report was published following the introduction earlier this month of a new law passed to extend the disclosure regime established for banks and traditional exchanges to cryptocurrency exchanges.

The publication was also preceded by charges against the Commonwealth Bank of Australia over its massive breaches of anti-money laundering and counter-terrorism financing regulations.

The report also highlighted an increase in money laundering through online betting sites, many of which are owned by international crime syndicates. This year, the authorities have already fined the country's largest betting company Tabcorp Holdings $5 million. U.S. for violating anti-money laundering rules.

And although the main source of income for the country's criminal community is still drugs, the report also named the amounts that cost the country credit card fraud ($411 million. US) and theft of personal data ($1.74 billion UNITED STATES).

Bitcoin split in two: causes and consequences

On August 1, 2017, it became known that a split occurred in the bitcoin community, as a result of which cryptocurrency Bitcoin Cash (BCC) appeared. In fact, this is practically a "clone" of bitcoin, but the limit on adding data has been increased from 1MB to 8 MB. The launch of this currency was implemented by a group of insiders led by ex-engineer Facebook Amory Sechet.^[27]

Bitcoin problem

As you know, initially the size of the bitcoin block could not exceed 1 MB. This restriction was implemented in order to protect the system from DDoS attacks. However, with the growing popularity of bitcoin, the number of transactions has increased, and the speed of their processing, on the contrary, has decreased.

To solve the problem in the bitcoin community, two ways were discussed: removing the restriction on the 1MB or storing part of the information outside the blockchain.

SegWit vs Bitcoin Unlimited

Basically, miners are in favor of eliminating the limit, who see this as a way to "unload" the system and reduce the commission for operations (the volume of operations will increase, and miners will still win). This method of solving the problem is called Bitcoin Unlimited.

Another way is promoted by cryptocurrency software developers, who offer some of the information stored on the blockchain, move outside the block chain and store in separate files. As a result, a lot of space will be available, and the speed of operations will be able to increase. This method is called Segregated Witness, or SegWit for short.

According to SegWit supporters, the removal of the block size limit will lead to the fact that more and more capacity will be required to confirm transactions. This, in the end, will force small miners to leave the business, and the system will be under the control of large organizations. This state of affairs contradicts the very idea of ​ ​ bitcoin as a decentralized cryptocurrency, the developers complain.

SegWit2x

However, a compromise was found - a general solution in the form of a new SegWit2x protocol. In general, it was proposed to store some of the information outside the blockchain, as the developers wanted, but at the same time raise the limit on adding new data to 2 MB, to please miners.

To switch to the SegWit2x protocol, it was necessary to update the software used by miners and bitcoin owners. Despite the support for SegWit2x by most miners, some users still refused the update.

Bitcoin split in two

A small group of developers separated, creating the Bitcoin Cash cryptocurrency. This branch was supported by some miners, as well as exchangers and wallet developers. Miners have transferred part of their capacity to receive new Bitcoin Cash blocks, and the developers have provided the opportunity for ordinary users to buy, store and pay with the new currency.^[28]

As noted, supporters of Bitcoin Cash decided to create their own version of cryptocurrency, since they do not believe that within the SegWit2x the limit on adding new data will increase.

According to the technical director of the Safello exchange, a member of the board of directors of Blockchain.Community Alexei ​Bragina, Bitcoin Cash will have few followers, since earlier most representatives of Western business agreed to support the main branch of Bitcoin. Thus, not everyone will be able to conduct a transaction with a new cryptocurrency. Also, the option of its complete exclusion from possible calculations is not excluded. ^[29]

Bitcoin recognized as the official currency in Japan

The Japanese government has recognized bitcoin as an official means of payment. The Cabinet of Ministers of the country announced a number of conditions that companies should fulfill to use cryptocurrency in their work^[30].

In particular, in order to use bitcoins, companies must have a financial reserve of 100 thousand dollars or more. The next mandatory step is to undergo a systematic external audit in the tax service and provide a report on the activities.

In addition, organizations applying for permission to use bitcoins in their activities should make a one-time contribution of 300 thousand dollars in favor of the Japanese budget. At the same time, it is specified that successful compliance with the approved rules does not guarantee the receipt of a license at all. The final decision on cryptocurrency calculations will be made by members of a special commission.

According to Nikkei, the circulation of Bitcoin, Ripple, Litecoin and other virtual currency in the country is 185 billion yen ($1.67 billion). Experts at the Fuji Chimera Research Institute predict that by 2020 this figure will grow almost 10 times. The mobile payment market in online stores is considered the most promising for the development of the technology.

The use of bitcoins will be limited in the Czech Republic

The Czech Republic has passed a law that limits the use of bitcoins. Also, the European Commission has prepared proposals for the identification of users who trade in digital currencies^[31].

Czech citizens who exchange, sell or buy bitcoins must be registered. According to the Ministry of Finance, anonymity in operations with cryptocurrency can become a loophole for tax evasion and criminal actions.

In

Prague, there are 80 places where bitcoins are accepted for payment. At the same time, the number of cryptocurrency owners in the country already exceeds tens of thousands.

The European Commission has also prepared proposals to identify users who trade in digital currencies.

"If digital currencies are brought within the framework of the anti-money laundering directive, crypto exchanges will have to require documents to verify the identity of their customers, in accordance with the Know Your Customer (KYC) policy," the EC said in a press release

.

2016: Santander: Bitcoin is a threat to acquirers and card issuers

According to experts from the Spanish bank Santander, strengthening the positions of bitcoin and block chain technology can have a strong impact on the payment card market, from which acquiring banks and issuers will suffer, but the position of Visa and Mastercard^[32] will significantly improve: ^[33].

In a document on the Brazilian market, Santander researchers warn that the further spread of bitcoin will have a negative impact on the country's largest credit and debit card operator, Cielo, jeopardizing the company's business model itself as a result of falling revenues from the trade commission and POS terminal network.

The decrease in income from the interbank commission is also expected by issuing banks, while card providers and manufacturers of POS terminals may face some difficulties associated with a decrease in the number of physical cards in circulation.

Large companies such as Visa and Mastercard, on the contrary, can benefit from block chain technology by reducing operating and IT costs and back office support.

2010: Programmer buys pizza for 10,000 bitcoins

In the spring of 2010, programmer Laszlo Hanesh ordered two pizzas, for which he paid ten thousand bitcoins for jokes - little then known cryptocurrency. Hold Laszlo this money, today he would have owned about $60 million.

2008: Satoshi Nakamoto publishes an article describing the algorithm for the operation of the "electronic currency"

Bitcoin appeared at the end of 2008, when the programmer Satoshi Nakamoto has ^[34] published an article on the Internet describing the algorithm for the operation of the "electronic currency."

After less than nine years, the total value of all bitcoins reached almost $53 billion, and up to 40 million people make payments with their help.

There are other cryptocurrencies: in 2017 there are more than 200 of them.

Notes