The cryptocurrency market has grown at an exponential rate in 2021, reaching a staggering $2.0 trillion in value as it continues to pique the interest of Wall Street’s bigwigs.
On October 31, 2008, in the wake of the financial crisis, one or more anonymous people, hidden behind the pseudonym Satoshi Nakamoto, published the founding white paper of bitcoin.
The goal was to develop a method of payment whose security would be overseen by software rather than a central bank or financial institutions, and whose rules would be nearly impossible to change.
While anyone can “mine” for new bitcoins, doing so requires massive data centers, which is why platforms like Coinbase exist to facilitate cryptocurrency trading.Certain digital currencies are accepted by banks and payment services such as Paypal.
Since the first block of 50 in early 2009, nearly 18.7 million bitcoins have been created. Nakamoto has set a limit of 21 million bitcoins.
Despite its volatility and limitations as a payment method, bitcoin is being viewed as a store of value that could one day rival, if not surpass, gold as a safe haven investment in the face of high inflation.
In Nigeria, where the naira has lost 50% of its value against the dollar in recent years, a third of the population is said to have used cryptocurrency.
Bitcoin has smashed records since late last year, rocketing from around $12,000 in October to more than $62,000 on Tuesday, after its value plummeted in 2018.
In light of this, central banks and market regulators have issued warnings about the impact of volatility, particularly on small investors who stand to lose a lot of money.
Recall during the #ENDSARS protest, young, internet-savvy Nigerians leverage on cryptocurrencies (Bitcoin) to drive and sustain their campaign against establishment institutions, from building online teams to respond to legal issues like arbitrary arrest and unlawful detention of protesters.
However, it is clear that bitcoin has benefited some individuals and businesses significantly, and major central banks are working on their own potential digital-currency projects.
Tesla, the electric car company, has invested $1.5 billion in bitcoin and began accepting it as payment in March.
Several cryptocurrencies are attempting to compete with bitcoin or to complement it.
The market’s second most valuable asset is ethereum, which this week surpassed $2,000 for the first time.
According to Coinmarketcap, a specialist site that tracks over 9,000 different cryptocurrencies, the cryptocurrency market is worth more than $2.0 trillion.
Some are referred to as “stablecoins” because their value is linked to a traditional asset like the dollar, reducing the volatility seen in bitcoin.
Meanwhile, because bitcoin and other cryptocurrencies are mined by solving puzzles on powerful computers that use a lot of electricity, environmental concerns are becoming more prevalent.