6 big things reviewing what Bitcoin has gone through in 2021

have to say that for the entire year of 2021, it may be the best year since the birth of Bitcoin. In the past year, the Federal Reserve has continued its crazy monetary quantitative easing policy, and as a result, it has brought serious inflation problems to the United States. We are not surprised at all. There has never been such a severe disconnect between reason and policy, truth and propaganda as in 2021, which has increasingly highlighted the importance of Bitcoin.

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2021 is also the most important year since the birth of Bitcoin. After a year of ups and downs, the rise of Bitcoin this year has made the “HODL (holding cryptocurrency firmly for a long time regardless of the price of the currency)” family even more Strengthened the belief in holding cryptocurrency for a long time. At the beginning of this year, the price of Bitcoin began to rise from 29,000 U.S. dollars until it rose to 64,000 U.S. dollars, then fell back to 29,000 U.S. dollars, and then returned to a record high of 69,000 U.S. dollars, and fell back to 48,000 U.S. dollars at the time of writing. Greed and panic caused many people to lose part or all of their chips. Looking back on the past 12 months, Bitcoin has experienced the following six major events in general:

1. The rapid development of the Bitcoin Lightning Network

Since the beginning of the year, the price of Bitcoin has risen by about 70%, but this is not the only thing that has risen. With the strong development and continuous innovation of the Bitcoin Lightning Network, Bitcoin as a transaction medium has become more and more mature.

At present, the number of lightning nodes and channels has more than doubled. Among them, the number of nodes has increased from about 15,000 to 31,000, and the number of channels has increased from about 36,000 to 82,000. Even more impressive is that, according to data provided by Bitcoin Visuals, the total capacity of the Bitcoin Lightning Network has increased from less than 1,000 BTC to nearly 3,300 BTC. If measured in U.S. dollars, the liquidity on the Lightning Network is more than five times what it was a year ago.

Thanks to the Lightning Network, Bitcoin is more and more widely used as a method of payment and a practical means of exchange. For example, Citadel21 currently handles most transactions through the Lightning Network.

It is worth mentioning that streaming payment through the Lightning Network has become a proven technology that can be effectively implemented in 2021. Large-scale Lightning Network applications such as Breez and Sphinx can now stream live while listening to podcasts, paving the way for new monetization methods; therefore, we often hear the compliment “value for money”. Not only that, but the online self-verification method can be greatly simplified through the Lightning Network.

2. Institutions start to increase

MicroStrategy (MicroStrategy) is a technology company with a leading position in bitcoin reserves among all listed companies. The company’s CEO Michael Saylor has tripled his bitcoin holdings in 2021 and has reached an astonishing level. 122,000 bitcoins. Tesla still holds the 43,000 bitcoins purchased at the beginning of the year, but after its CEO Musk invested a large amount of shit coins and issued a statement on the environmental issues caused by mining, it triggered bitcoin FUD (fear, Short for uncertainty and doubt), most Bitcoin enthusiasts no longer trust and follow him.

Norwegian industrial and energy giant Aker bought more than 1,000 bitcoins through their new company Seetee (dedicated to investing in projects and companies in the bitcoin ecosystem), which also proves that holding bitcoins on the balance sheet is gradually Become legal.

3. The traditional financial industry is becoming more and more tolerant of Bitcoin, but Bitcoin does not seem to care

In June 2021, Coinbase chose a direct listing to land on Nasdaq, with an initial market value of US$85 billion. In October, the first Bitcoin exchange-traded fund (ETF) in the United States, the ProShares Bitcoin ETF, also successfully started trading this year.

Many practitioners in the traditional financial field may regard these events as major developments, but they are not important or have no positive significance for Bitcoin. Of course, they are not negative, but Bitcoin does not seem to care about the need to be accepted by the traditional financial industry.

4. TAPROOT

In June 2021, the Bitcoin network is determined to complete the TAPROOT upgrade this year.

On November 14, the block height of the Bitcoin network reached 709632 and the Taproot upgrade was officially activated. The upgraded Bitcoin network introduces the Schnorr signature scheme, the data structure of MAST (Merkel tree) and the new Tapscript scripting language. As described in the updated Github document of Taproot, the combination of the three will expand the flexibility of Bitcoin’s smart contracts At the same time, it provides more privacy by allowing users to cover up complex smart contracts with ordinary Bitcoin transactions. 

The activation of Taproot is regarded by Bitcoin enthusiasts as the most ambitious upgrade of the network. However, compared to the London upgrade that brought deflationary functions to Ethereum, the upgrade of Bitcoin (BTC) does not seem to be as expected. There are too many waves in the market. 

5. Bitcoin computing power has been migrated

In May, the fifty-first meeting of the Financial Stability and Development Committee of the State Council, the meeting requested, adhere to the bottom line thinking, strengthen the comprehensive scanning and early warning of financial risks, promote the reform of small and medium-sized financial institutions, reduce credit risks, and strengthen the supervision of platform enterprises’ financial activities. Crack down on Bitcoin mining and trading activities, and resolutely prevent individual risks from being transmitted to the social field. Subsequently, Xinhua News Agency issued an article “Not Allowing High Energy-Consumption Mines to Squeeze Precious Resources”. Mining machines in many places in Sichuan were collectively powered off at 0:00 on June 20, causing a general decline in the computing power of the top 10 mining pools. Bitcoin was calculated across the entire network. Force also fell to a low of 87 EH/s.

However, Bitcoin computing power has now migrated to North America. In October, according to the official website of the National Development and Reform Commission, according to a report on the British “Financial Times” website on October 13, new data showed that cryptocurrency mining activities were banned in China for two months. Later, the United States surpassed China to become the birthplace of the world’s largest Bitcoin mining activity. According to data published by the Cambridge Alternative Finance Research Center, between May and July this year, China’s share of global computing power (that is, the computing power required for Bitcoin mining activities) fell from 44% to zero. In 2019, China’s share of global computing power was 3/4. According to reports, the United States’ share of global computing power rose from 17% in April to 35% in August. At the same time, Kazakhstan’s share rose by 10 percentage points to 18%.

6. Bitcoin becomes legal tender

For Bitcoin and even the broader encryption industry, El Salvador’s identification of Bitcoin as the country’s legal tender is undoubtedly the most important thing in 2021, and it can also be said to be one of the important milestones in the history of Bitcoin.

On September 7, 2021, the El Salvadorian legislature officially took effect on the bill “Bitcoin and the U.S. dollar are used as the legal tender of El Salvador at the same time.” Residents of this country can download the government’s digital wallet for free.

In addition to turning Bitcoin into legal tender, El Salvador is also hoarding Bitcoin and has so far added at least 700 BTC. More “interesting” is that El Salvador’s President Nayib Bukele also announced that the local area is building an early stage of a Bitcoin mining project powered by volcanic resources. The video released by Bukele initially showed a bird’s-eye view of a geothermal energy facility, then cut into footage of a cargo truck, and finally showed the appearance of a mining machine. The government of this tropical country aims to use the huge energy produced by the volcano in order to mine Bitcoin.

Summarize

Although there are some bumps on the road, Bitcoin once again proved its value in 2021. Although it did not break through the $100,000 price like many market “fortunetellers”, it is basically stable at the $50,000 range. 2022 is approaching. What important events will occur in the encryption industry next year, and what news will attract attention? Let us wait and see.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/6-big-things-reviewing-what-bitcoin-has-gone-through-in-2021/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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