Bitcoin was the world’s first major cryptocurrency that developed a following of miners and investors.
Bitcoin was created in 2008 by Satoshi Nakamoto. Nobody knows the identity of this person or group of people, other than those who were involved in its creation. In honor of its founder, bitcoins are divided into satoshis, where one satoshi is worth 0.00000001 BTC, or one bitcoin is worth 100,000,000 satoshis.
Bitcoin Use Cases
Bitcoin is a first-generation cryptocurrency, meaning that its underlying technology is old, and slow. It is possible to create bitcoin smart contracts, though other cryptos are better for this purpose.
Most people use bitcoin as a store of value, and for trading on its volatility. It is also considered the world reserve cryptocurrency. In fiat, the US dollar is the world reserve currency, because most other currencies are pegged against it to determine their value. This is the case for bitcoin in digital asset trading, where most digital trades are measured in bitcoin value, typically in satoshis.
Bitcoin futures are similar to stock and commodity futures. When you invest in a bitcoin future, you are not investing in actual bitcoins. Rather, you are placing a bet against the future price of bitcoin.
Several companies offer bitcoin futures, including:
- CME offers bitcoin futures for cash settlement on a monthly basis
- Bakkt offers daily and monthly bitcoin futures, with the option of taking physical delivery of the bitcoins
- CBOE used to offer bitcoin futures, but stopped creating new contracts
The Future of Bitcoin
As bitcoin is the world reserve cryptocurrency, it is likely to stay around for a long time, despite its old technology. The value has ranged from a few cents to $20,000 per BTC and is currently in the middle of that range. Some investors speculate that one bitcoin will be worth hundreds of thousands of dollars or more, while others expect its value to tank. If history is an indicator, it will fluctuate in the thousands of dollars, occasionally peaking at new all-time-highs before settling back to baseline.