Bitcoin: the cryptocurrency par excellence is still surrounded by mystery, scandals and speculation

Bitcoin, which broke its price record on Tuesday, surpassing $69,000, and then fell 8%, around $7,000, is the most famous of the cryptocurrencies, but it is surrounded by mystery and controversy.

Around 20:55 GMT, the most important cryptocurrency by existing volume (around 1.2 trillion dollars) was trading at 62,062 per unit.

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Mysterious creator

More than fifteen years after its invention, the authorship of bitcoin continues to generate controversy.

The principles of this virtual currency were revealed on October 31, 2008 in the “White Paper”, a nine-page document published under the signature of Satoshi Nakamoto.

It theorizes that “making online payments directly from one third party to another would allow us to dispense with a financial institution,” and free ourselves from central banks, traditionally the only ones authorized to create money.

Over the years, several hypotheses about who Satoshi is have come to light, but the mystery remains.

Craig Wright, an Australian computer scientist who has claimed since 2016 to be the creator of bitcoin, remains on trial in London to determine whether or not he is the author of the book.

Successive scandals

Since its creation, bitcoin has attracted criticism, especially for be the currency chosen to pay on the dark web without leaving a trace.

She is regularly accused of serving launder money from crime or to extort. Added to this is the cryptocurrency sector’s reputation for volatility, shaken in recent years by the fall of several prominent entrepreneurs and high-profile bankruptcies.

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Changpeng Zhao, who ran the world’s largest cryptocurrency platform, Binance, resigned and pleaded guilty to violating anti-money laundering laws in the United States.

Its biggest rival, FTX, went bankrupt at the end of 2023, and its founder, Sam Bankman-Fried, was convicted of several charges, including fraud, conspiracy and money laundering.

Earn respect

Many Bitcoin investors operate for speculative purposes, but the cryptocurrencyhas received some signs of respectability in recent years, although sometimes with limited success.

In early January, the US financial regulator approved a new type of investment, indexed to bitcoin, which theoretically allows a broader public to indirectly invest in the cryptocurrency without having to own it.

This decision contributed to the rise in prices that led to the new all-time high on Tuesday: $69,191 per bitcoin.

In September 2021, El Salvador became the first country in the world to adopt it as one of its legal currencies. However, according to a survey by the Central American University (UCA), 88% of Salvadorans did not use it in their transactions in 2023.

Some merchants also announced that they would accept it as a payment method, such as billionaire Elon Musk. However, the Tesla director ended up backtracking, arguing that bitcoin production was still too polluting.

A particular operation

Bitcoin is based on blockchain technology, a virtual registry that allows information to be stored and exchanged in a secure, reliable and unalterable manner. Each transaction is recorded in real time, in an unforgeable record.

Bitcoin is created, or “mined,” as a reward when powerful, and therefore energy-intensive, computers solve complex problems. “Miners” are those who contribute to creating blockchains by validating transactions.

To avoid an uncontrolled explosion, Satoshi Nakamoto limited the maximum number of bitcoin units that can exist in the world to 21 million. It is expected to reach them around the year 2140.

And every four years, the reward for bitcoin “miners” is divided in half. This next “halving”, as it is known in English, will take place in April and will slow down the pace of entry of new bitcoins into the market, reducing its potential availability and increasing its value.

Source: Elcomercio

Callum

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