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November 29, 2024 | 06:44 pm
TEMPO.CO, Jakarta - Praised for its decentralized nature, Forbes named Bitcoin the best investment of the year in 2013, solidifying its position in the growing virtual currency market. Bitcoin hit an all-time high last March, logging a value of US$73,000, concluding the previous period of crypto winter.
Despite these milestones, many people remain oblivious to the very concept of Bitcoin. Some, however, are curious enough to ask the question, “when was Bitcoin invented?” and “who was the creator of Bitcoin?”
Understanding the concept behind the lucrative investment vehicle becomes essential for investors to somewhat correctly predict the direction of the market. Let’s dive deeper into the history of Bitcoin as cited from Investopedia, US News, and Crypto.com below.
The History of Bitcoin
The first concept of Bitcoin was invented in 2008 by an anonymous person or group under the pseudonym Satoshi Nakamoto through a published paper titled Bitcoin: A Peer-to-Peer Electronic Cash System. Currently dominating cryptocurrency’s largest market, Bitcoin (BTC) was originally created in light of the 2008 financial crisis, according to Crypto.com.
Long before Bitcoin rose to popularity, American cryptographer David Chaum introduced eCash in 1983, which was later elaborated to be an anonymous electronic money. Despite the attempts, the public failed to familiarize the concept with adoption.
During its early days, digital currency faced fears of duplication due to the lack of physical currencies, hindering investors from incorporating the widespread use of tokens. In 2008, Nakamoto addressed substantial issues regarding the first cryptocurrency’s problem of double spending, proposing a decentralized approach as a solution.
The idea of a decentralized plan is manifested into a blockchain system, where timestamps follow every digital transaction and are distributed across a network of computer systems.
Cryptographic techniques will then be utilized to encrypt the data and secure the information. Only validated data and networks based on proof-of-work authentication are able to make transactions. This method also eliminated the dependency of banks, the government, and any financial firms.
The Wealth of Satoshi Nakamoto
Satoshi Nakamoto, an anonymous key player behind the creation of Bitcoin, is believed to have mined over 1.1 million BTC that spread across nearly 20,000 different accounts, the River Intelligence says.
Satoshi earned the stash of ownership as a reward for inventing and being the first miner to coin the blocks of transactions.
Despite being a hailed key player, Satoshi Nakamoto has left the project and has never been heard from since 2010.
Bitcoin Taxation
When it comes to tax obligation, the IRS, also known as the Internal Revenue Service, sees cryptocurrency as property, just like stocks, real estate, or bonds. Investors alike owe taxes upon any transactional gains involving the cryptocurrency, including earning, trading, selling, and using it as a payment gateway.
Selling Bitcoin (BTC) for fiat like USD is considered a taxable event as the transactions generate gains and losses. However, several factors come into play to determine the tax liability, like profit, holding period, and tax bracket.
Trading one token for another is also subject to tax obligations. For instance, when you sell Bitcoin to purchase Ethereum, the IRS will view the transaction as a taxable event.
Bitcoin has come a long way since its emergence in 2008, evolving from an obscure concept introduced by Satoshi Nakamoto into a dominant force in the financial world.
Editor’s Choice: The Gray Area: Bitcoin's Legal Status Worldwide
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