Bitcoin has been growing and growing over the last few years, but you won’t believe how much it’s worth today!
With currency perhaps the leading route to power around the world, it was only a matter of time before the money we deal with in day to day life branched out to acclimatise to new creations in technology. As such, Bitcoin (BTC) and other cryptocurrencies have surged in popularity since their creation, and their worth today in 2020 compared to that of 2015, just half a decade ago, may surprise you.
What is Bitcoin?
Bitcoin is a cryptocurrency (or digital currency) that was created in January 2009 in the aftermath of the global housing market crash. It sprang from an idea set out by the pseudonym Satoshi Nakamoto, whose identity remains a mystery today.
Bitcoin is popular as it offers an alternative to the centralised system of cash that we are used to in normal life. It is operated by a decentralised authority and offers lower transaction fees.
Bitcoin is maintained on a public ledger that anyone can view. They are not physical and are not backed by banks or governments. Its creation has since led to the founding of other cryptocurrencies, such as Altcoins.
There is even a crypto casino these days that you can play, proving that the currency remains popular and has further expanded its reach.
How does Bitcoin work?
Bitcoin uses peer to peer technology where you can make instant payments to one another. Those who participate in the network are termed “nodes” or “miners”. The latter are those who process the transactions, and they gain from transaction fees paid in bitcoin.
And, while it might be fun to imagine that the Bitcoin was conceived as a miraculous and unique discovery, this is not the case. Indeed, there were precursors to the infamous cryptocurrency.
In 1997 Hashcash was invented by a man named Adam Back, while b-money (Wei Dai), bit gold (Nick Szabo) and Reusable Proof of Work (Hal Finney) all came before the time of Bitcoin, just before the turn of the decade in 2010.
Bitcoin’s creator has since remained anonymous, perhaps so to avoid fame or even trouble if the cryptocurrency was to challenge too strongly the authority of banks and governments in the financial game.
What was Bitcoin worth in 2015?
On the 29th of June 2015, Bitcoin was worth $263.07, which meant that a $1,000 investment in the currency would have obtained for the investor a total of 3.801 Bitcoin (BTC).
Fast forward the five years, and spending $1,000 on 3.801 BTC would be worth a staggering $34,936.89, a jump of 3493% and perhaps a ringing endorsement of the fortunes of the cryptocurrency.
Interestingly, this is not Bitcoin’s peak. In December 2017, only two and a half years on from June 2015, a $1,000 investment in 3.801 BTC would be worth an outrageous total of $76,363.71, roughly €64,000.
The BTC became mainstream around 2013, where its worth stayed around $1,000 per month, while its value was around $6,400 in 2018, a year after its high of December 2017.
A volatile currency
Bitcoin has often been described as quite a volatile currency, as its worth usually tends to fluctuate, and it is often unpredictable what its worth will be at any given time.
Volatility is typical for cryptocurrencies such as BTC. For example, another type of cryptocurrency, Ethereum, values at around $200 when it once was worth about $1,300, almost six times the amount.
Indeed, Jack Bogle, an investor and Vanguard founder, urged people to “Avoid Bitcoin like the plague”, sentiments echoed by the likes of Mark Cuban and Warren Buffett.
Even a global economist weighed in. New York University professor, Nouriel Roubini, said: “Crypto is the mother or father of all scams and bubbles”. Not quite the ringing endorsement the mysterious founding fathers would hope for.
How does Bitcoin compare with other stocks?
To gain a deeper understanding of the popularity, and ultimately, the development of the bitcoin, it may be useful to compare it with other global stocks that you may hear or read about in the news every day.
For example, the Dow Jones Industrial Average Index increased 45.3% over the same 5-year period. The Dow Jones (or the Dow) is a stock market index that measures the stock performance of 30 large companies based in the United States (US).
Elsewhere, Tesla Inc. added 258.2%, Apple Inc. added 190.5%, and Amazon.com Inc, owned by the world’s richest man, Jeff Bezos, added a huge 523.5% throughout the period 2015 – 2020.