The revolutionaries of digital assets: How Bitcoin became the origin of cryptocurrencies

The Birth of Cryptocurrency: Tracing Its Origin Moment

When did cryptocurrencies actually start? The answer points to the special year 2008. On October 31 of that year, a mysterious developer, Satoshi Nakamoto, published a paper titled “Bitcoin: A Peer-to-Peer Electronic Cash System,” which laid the theoretical foundation for the entire crypto asset field.

On January 3, 2009, Satoshi Nakamoto completed the first software client implementing the Bitcoin algorithm, and Bitcoin (BTC) was officially born. From that moment on, humanity had its first digital currency not issued by any central authority.

From its inception to today, the story of Bitcoin is legendary. It evolved from a niche experiment in the tech community to an asset that shakes the global financial markets. The peak price surpassing $60,000 in 2021 marked that this once worthless thing has become an entity difficult for mainstream finance to ignore.

What is Bitcoin: From Concept to Reality

BTC was originally designed as a currency, but over time, it has been redefined as a specific crypto asset. From the holder’s perspective, Bitcoin represents tangible digital ownership, with both utility and exchange value.

Unlike traditional financial assets, Bitcoin adopts a decentralized architecture. It operates on a peer-to-peer network, relies on consensus mechanisms to maintain system operation, uses open-source code, and is built on blockchain technology. This design solves a century-old problem: how to ensure a fixed total supply and secure circulation of digital assets without a central authority.

Bitcoin creates a new accounting model—each participant holds a complete copy of the ledger, ensuring transaction transparency and immutability through collective bookkeeping. This is fundamentally different from the bank-centered accounting model we are used to, where institutions manage accounts on behalf of users; in the Bitcoin network, everyone maintains the same distributed ledger together.

The Secret of System Operation: Mining and Incentive Mechanisms

Participants who maintain the security of the Bitcoin network are called “miners.” Their task is “mining”—not actual mining, but packing and verifying transactions through computation. On average, every 10 minutes, miners bundle transactions into a new block.

So, why do miners do this work? Bitcoin has designed a clever incentive system. Each time a block is successfully packed, miners must solve a highly complex mathematical puzzle. The first to solve the puzzle and broadcast the result to the network will receive Bitcoin rewards within that block. This is how new Bitcoins are created.

Since transactions must be packed by miners and confirmed by more than 6 nodes in the network to be finalized, the transaction initiator pays a fee as compensation. This fee has a dual purpose: first, to directly compensate miners’ work; second, to prepare for the future when the total supply of Bitcoin is fixed—once all 21 million Bitcoins are mined, block rewards will disappear, and transaction fees will become the sole incentive for miners to maintain the network.

How Transactions Occur: On-Chain Process Detailed

Bitcoin transactions follow a strict process. The sender first creates a transaction record, then signs it digitally with their private key. This signature indicates the asset owner’s authorization and ensures the transaction cannot be tampered with after completion.

After signing, the transaction is broadcast to the entire Bitcoin network and enters a pending confirmation state. Miners receive these transaction requests and include them in new blocks. When at least 6 nodes in the network confirm and verify this transaction, the transfer is officially completed.

Once recorded on the blockchain, the transaction is permanently stored. The recipient gains full ownership of the funds and can perform subsequent transfers at any time. The entire process is transparent and traceable, but the real identities of the parties remain anonymous; transaction addresses do not directly reveal personal information.

Core Features: Why Bitcoin Is Unique

Fully Decentralized Operation Mode

In the Bitcoin network, issuance and transactions are automatically executed by distributed computers, requiring no intervention or control from any central authority. This is an organizational structure maintained equally by multiple parties—every participant is an independent individual with equal rights. No one has absolute authority, nor can they unilaterally influence others’ decisions. Anyone can join or leave without affecting the overall system.

Transparent and Immutable

All Bitcoin transaction activities on the chain are publicly verifiable, with every detail recorded. More importantly, these transaction data are protected by cryptography and cannot be tampered with; once recorded, they are permanent.

Although transactions are open, transparent, and fully traceable, the identities of traders are anonymous. We only see wallet addresses, which cannot directly reveal the real owners’ identities.

Borderless Global Liquidity

Bitcoin transactions are not limited by borders and can be conducted anywhere in the world. As long as there is an internet connection, any node globally can participate in Bitcoin transactions and transfers, achieving truly cross-border value transfer.

Eternal Total Supply Limit

Bitcoin’s total supply is permanently set at 21 million coins, a number embedded in the code from inception and unchangeable. The network releases a specific amount of new coins every 10 minutes, and the entire mining process is expected to conclude around 2140.

This fixed total supply endows Bitcoin with a scarcity attribute similar to precious metals. Over the years, some Bitcoins have disappeared from circulation due to lost private keys, further strengthening its scarcity value. For investors, the certainty of the total supply provides clear value support.

Halving Mechanism

Bitcoin halving is a key mechanism in its design. Every 4 years, the block reward for miners is halved. From the initial reward of 50 BTC, to 25 BTC, then 12.5 BTC, and now 6.25 BTC, the gradual reduction enhances scarcity. Since 2009, Bitcoin has experienced three halving events, ensuring controlled supply growth.

Evolution of Market Status: From Marginal to Mainstream

Bitcoin is called “digital gold” not by chance. Its fixed total supply and anti-inflation features have gradually made it a store of value and risk-hedging asset for institutional investors.

In the crypto asset space, Bitcoin holds a dominant position. Market data shows that Bitcoin’s market cap accounts for the vast majority of the total cryptocurrency market cap. After surpassing the trillion-dollar mark, it is roughly 10% of the total global gold market value, exceeding the market cap of well-known listed companies like Tesla and Facebook.

This rising market cap directly reflects its growing influence. Citibank once stated that Bitcoin is at a critical point of entering mainstream finance. Traditional giants like JPMorgan, Morgan Stanley, and Fidelity have launched Bitcoin-related products; payment leaders like Visa, PayPal, Mastercard, and Square are also involved in Bitcoin. These developments indicate that Bitcoin has become a force not to be underestimated, reshaping the traditional financial ecosystem.

Institutional investors’ enthusiasm is increasing daily. More asset management firms see Bitcoin as a hedge against inflation, an optimized investment portfolio component, and a safe haven that traditional government bonds cannot provide. The trend of Bitcoin becoming a mainstream financial asset is now irreversible.

Three Ways to Obtain Bitcoin

Participate through Mining

Mining is the most primitive way to acquire Bitcoin and the source of new coins. Participants need specialized mining hardware, and the Bitcoins earned go directly into their wallets.

However, as the price rises and total network hash rate increases, mining has become extremely competitive. Requirements for mining hardware performance are rising, equipment turnover speeds up, and hardware prices increase accordingly. Miners also face risks and investments related to hardware procurement, mining farm location, and electricity supply. Therefore, mining has evolved into a high-threshold, high-investment professional activity, rarely used by ordinary investors.

Purchase directly on trading platforms

Most investors choose to buy Bitcoin on trading markets. Large exchanges, with good liquidity and trading depth, provide a friendly entry for beginners. Users can buy BTC with fiat currency on these platforms, with simple operations and relatively controlled risks.

Over-the-counter (OTC) trading is another method, but due to lack of platform guarantees and third-party supervision, it carries higher risks and requires careful vetting of trading counterparts.

Obtain through Airdrops

In early Bitcoin days, it was used as a gift for rare items or achievement rewards. Now, many platforms regularly hold Bitcoin airdrop events to promote products or reward users, where participants can earn rewards by completing specific tasks.