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Mystery, scandals and speculation: Bitcoin, the cryptocurrency that broke all records

More than sixteen years after the appearance of Bitcoin, it is still not clear who created it

Dec 5, 2024 14:23 341

Mystery, scandals and speculation: Bitcoin, the cryptocurrency that broke all records  - 1

Bitcoin, which this morning exceeded the unprecedented threshold of 100,000 dollars, is the most popular cryptocurrency, but it is shrouded in mystery and its reputation remains questionable, writes AFP.

Mysterious creator

More than sixteen years after the emergence of Bitcoin, it is still not clear who created it.

The principles of this virtual currency were presented on October 31, 2008. in the "White Paper" - a nine-page document signed by one Satoshi Nakamoto.

He theorizes that "making online payments directly from one third party to another will avoid going through a financial institution."

In this way, transactions go beyond the reach of central banks, which have traditionally been the only ones authorized to create money.

Who is Satoshi Nakamoto? Is this a real name or a pseudonym of one or more persons? Various hypotheses have been put forward over the years, but the mystery remains unsolved.

Craig Wright, an Australian IT specialist and entrepreneur, claims that he created Bitcoin.

However, the claim was overturned: in March, a British judge ruled that the Australian was not the creator of the famous cryptocurrency, citing "irrefutable evidence" against him at the end of a trial pitting him against an industry association.

Constant scandals

Since its inception, Bitcoin has come under fire for being the currency of choice for payments on the "darknet", a parallel network that guarantees anonymity without leaving a trace.

Regularly criticized for being used to launder criminal money, Bitcoin allows extortion funds to be obtained through ransomware, which blocks access to victims' computer systems in exchange for the payment of a ransom .

According to a report of the analyst company "ChainAnalysis" (Chainanalysis) in the first half of 2024. paid $460 million due to ransomware attacks, up 2 percent year-over-year.

This reinforces cryptocurrency's reputation as a volatile sector, rocked in recent years by the fall of several star entrepreneurs and high-profile bankruptcies.

At the end of April, Changpeng Zhao, who was at the head of "Binance" (Binance), the world's largest cryptocurrency exchange, was sentenced to four months in prison for money laundering by a court in San Francisco.

According to the investigation of the American authorities "Bynes" has not implemented the necessary measures to prevent transactions carried out for the benefit of organizations such as "Islamic State", "Al Qaeda"; or the armed wing of the Palestinian Islamist movement "Hamas".

The biggest competitor of "Binance" - the cryptocurrency trading platform FTX (FTX) - went bankrupt at the end of 2022, and co-founder and main shareholder Sam-Bankman-Fried was sentenced in March to 25 years in prison for financial fraud and criminal conspiracy.

Integrity Guarantees

Although many Bitcoin investors pursue speculative goals, the cryptocurrency has received "integrity guarantees" in recent years.

A US financial regulator even approved in January a new type of investment indexed to bitcoin and tracking its performance, allowing a wider public to indirectly invest in the cryptocurrency without having to hold it directly. This decision largely contributed to the price spike.

In September 2021 El Salvador became the first country in the world to adopt it as one of its legal currencies.

However, cryptocurrency has not been universally accepted by locals: according to a study by the University of Central America, 88 percent of Salvadorans did not use it in their transactions in 2023.

Some merchants have also announced that they will accept it as a means of payment, following the example of billionaire Elon Musk, who in 2021 announced that it will be possible to buy Tesla cars. (Tesla) with bitcoins - before reversing its decision.

Donald Trump's return to the White House could accelerate the trend toward normalization. The Republican actually promised during his campaign to make the US the "bitcoin and cryptocurrency capital of the world," while Democrat Joe Biden advocated for stricter regulation of the sector.

Special operation

Bitcoin is based on blockchain technology, a virtual ledger that allows information to be stored and exchanged in a secure, reliable and permanent way. Every transaction is recorded in real time and in a secure register.

Bitcoin is created - or "mined" - as a reward when powerful, and therefore very energy-intensive, computers solve complex problems.

"Diggers" are those who contribute to the creation of blockchains in the way of verifying transactions.

To avoid an uncontrolled explosion, Satoshi Nakamoto has limited the maximum amount of bitcoins that can exist in the world to 21 million (a level that should be reached around 2140).

Roughly every four years, the "halving" occurs, a technical event that reduces the supply of new bitcoins by halving the bitcoin reward given to users (or "miners") for mining this digital currency. Such an operation contributed to the price jump in early 2024