Bitcoin Statistics and Trends

Have you ever questioned what the difference between Bitcoin and bitcoin is?

The uppercase “B” for the term “Bitcoin” is appropriate when referring to protocol and payment networks. One should use Bitcoin when talking about the ecosystem.

While the lowercase “b” is used when talking about the currency and units of BTC.

Bitcoin is the first-ever cryptocurrency developed by an anonymous person known as Satoshi Nakamoto in 2009. One of the interesting parts of Bitcoin development is that its creator’s identity is still a secret. Although an Australian named Craig Wright claims to be Satoshi Nakamoto, the mystery still remains unsolved.

This article will help you analyze and understand Bitcoin statistics and trends. So let’s get started!

Who Prices Bitcoin?

The crypto market is unregulated, and the peer-to-peer system doesn’t rely on any bank or central government authority. With many people entering the crypto world, the most common question that pops up is who prices Bitcoin’s price.

Bitcoin’s price depends on the supply and demand in the market. Other factors also influence the price. The mining process cost to produce bitcoin, the number of exchanges it trades on, the rewards offered to the miners for verifying transactions, and the number of miners are other major factors that influence the price of bitcoin.

Right now, the price of Bitcoin on our exchange is:

1 BTC = (INSERT PRICE)

You can find several different prices for BTC on different exchanges. Coinbase (United States), Binance (Malta), and OKEx (Malta) are the most popular exchanges you can buy/sell bitcoin and other cryptocurrencies on.

Exchanges help users trade cryptocurrencies instantly and charge a small fee for their service. Each exchange has its own fee structure that can be found on its website.

Bitcoin Price History

Bitcoin has the most volatile trading history. When it was launched in 2009, it was worth $0. When early trading started a year later, the bitcoin’s price was around $0.0008.

Bitcoin saw its first rally in 2010 when the price peaked at $0.08.

Bitcoin Price in 2011

Bitcoin’s price saw a steep ascend in 2011. The price increased from $1 in April to an all-time high of $32 in June. A rise of 3200% in just a short period of 3 months.

However, the steep increase lived for a short while. A sharp recession in the cryptocurrency market led Bitcoin’s price to drop to $2 in November 2011.

Bitcoin Price in 2013

The year 2013 proved to be pivotal for Bitcoin’s price. The digital currency started trading at $13.40 at the start of the year and saw two major price increases.

 

The first major price action was seen in early April when the price hit a solid $220. However, that swift jump was followed by a quick decrease to $70 in mid-April.

 

Towards the end of the year, another huge surge and a subsequent crash took place. The crypto was trading at $123.20 in early October. It had risen to $1156.10 by December. Three days later, it had dropped to roughly $760.

Bitcoin Price in 2015

2015 was another volatile year and had great volatility throughout the year. In January, the lowest bitcoin price was around $177, which made the headlines throughout the crypto space. This was a steep drop of around 43% from the start of the year.

However, the price saw a new high in December and jumped to $465.

Bitcoin Price in 2017

The year 2017 saw the first-ever major bull run and exceeded almost any bullish predictions Bitcoin enthusiasts had. Bitcoin saw its lowest price of $775 on January 11.

The period between May and September of this year saw successive all-time highs for bitcoin. The price climbed above $2000 at the end of May and steadily kept increasing. By the first week of September, bitcoin was valued at more than $5000.

The cryptocurrency continued its upwards trajectory and saw a significant increase to an all-time high of $19,783 on 17 December.

Bitcoin Price in 2018

Throughout the year 2018, bitcoin saw a downward trend marking the end of the 2017 bull run. The highest price recorded was at the start of the year ($17,135).

The price bottomed out on December 15, seeing an all-time low of $3703.

Bitcoin Price in 2020

2020 was another significant year for Bitcoin, with the interest of hedge funds growing towards this deflationary asset.

The year started with a price of $7200 and saw an accelerated increase in price. Bitcoin was trading around $18,000 at the end of November.

By the end of the year, Bitcoin’s price increased by just under $24,000.

Bitcoin Price in 2021

The upward trend continued in 2021, and the price surpassed the $40,000 mark in January.

Bitcoin saw its all-time high of $64,854 on 14 April. However, due to FUD across the crypto market, bitcoin’s price has seen a major correction.

At the time of writing, bitcoin’s price is around 36,000 USD.

Bitcoin in Australia

The point of Bitcoin is to offer an efficient way to transfer money with the help of the internet, more specifically blockchain, without relying on banks.

Unlike other fiat currencies that governments regulate, Bitcoin is owned by no one. This makes it decentralized and much safer.

In Australia, digital currencies like bitcoin are legal and the government has allowed trading, mine, and hold as an investment asset.

Australian central bank (Reserve Bank of Australia) doesn’t accept Bitcoin and other cryptocurrencies as a form of currency. Although cryptocurrency can be used to make payments, it has no inherent value.

According to the Australian Tax Office (OTC), Bitcoin is not an official currency to be taxed, and hence it is not subjected to GST.

Bitcoin is seen as a personal asset in Australia, and capital gain tax can be applied for selling it.

For Australian businesses, using bitcoin for making transactions and buying goods is allowed. You need to report the equivalent of whatever crypto you receive in your income report. And thus, GST rules are applicable.

The Australian government financial intelligence agency AUSTRAC is responsible for regulating all the exchanges running in Australia. The exchanges need to register with AUSTRAC, apply for renewal of their license every three years, and have programs to monitor money laundering and terrorism.

Bitcoin Mining

Although there is a set number of Bitcoins that will ever exist — 21 million — not all the bitcoins are in circulation. 18.5 million bitcoins were recorded in circulation as of November 2020.

So how can we produce new bitcoins?

You can produce Bitcoin by a complex process known as “Mining.” In simple words, miners basically maintain a grand record of all the bitcoin transactions around the globe.

In the absence of miners, the Bitcoin ecosystem would still be usable and operational, but no new bitcoin will be released.

What is the mining process?

It is a process of solving complex computational problems known as hashes. Each hash gives a chance to the miners to yield a bitcoin. The more problems a miner solves, the greater his chances of earning a bitcoin.

In 2009, you would earn 50 BTC for completely mining one block. However, the rewards have been reduced to 6.25 BTC since 2020.

Miners compete to solve the problem. Being the first one to arrive at an answer is what makes you eligible for the reward. This competition to be the first one, also known as the proof of work, is what continuously increases the mining difficulty.

When bitcoin was first launched in 2009, the mining process was relatively simple and easy. Since the difficulty level was relatively low, the amount of computational power was also low. Even an average household computer’s CPU was able to mine bitcoin. Even Bitcoin’s creator envisioned bitcoin to be mined on an ordinary CPU.

However, as the price of bitcoin increased and the block difficulty increased, CPU mining was replaced by GPU mining. GPU is more efficient and executes instructions faster. With bitcoin mining becoming more mainstream, this even led to a shortage and price increase in GPU.

The continuous difficulty in mining and the need for more efficient systems has brought FPGA and ASIC mining to light.

Bitcoin mining, like other cryptocurrency mining, is legal in Australia. However, with the increasing difficulty of mining, is it really feasible to mine Bitcoin in Australia?

Is Bitcoin Mining Profitable in Australia?

There are multiple factors to look into to determine whether the mining process is a profitable venture.

  • Electric consumption
  • Block Difficulty
  • Hardware cost

Power cost in Australia is one of the highest throughout the globe. The average cost of electricity in Australia is around $0.3025 per kWh. This price can have a significant impact on how much profit you can make while mining bitcoin.

The difficulty to mine bitcoin is continuously increasing as more blocks are being unlocked—the rewards to miners halves after every four years. Moreover, the difficulty of mining bitcoin is adjusted after every 2,016 blocks are unlocked. This continuously makes the process of mining more difficult and less rewarding.

Even buying second-hand or cheap mining hardware can not be feasible since many new miners would compete against major miners with dedicated mining hardware. There are mining centers filled with ASIC miners.

Competing with all those dedicated miners with top-notch hardware with low electricity costs can be a real challenge. This is exactly why mining in Australia is no longer feasible.

What Impact Does Increasing Mining Difficulty Have On Miners?

The Bitcoin network ensures that each block is produced every 10 minutes to verify transactions are smoothly carried out. The mining difficulty is adjusted after roughly 14 days or after every 2,016 blocks to make sure the production time remains 10 minutes.

But how does this affect the miners?

The profits a miner makes are directly related to the hash power he contributes to the network. Since the hashing power is continuously rising while the miner’s hashing power remains the same, the miner’s contribution to the network decreases relatively.

This means that over time, a miner’s profit will decrease if his hashing power is constant. We can deduce the following formula:

ewProfit = currentProfit * currentDiff/newDiff

At a currentProfit of 1 BTC/d and a 30% increase in difficulty, you get:

(1BTC/d)*100/(1–+30)= (1BTC/d)/1.3 = 0.76923077 BTC/d

This shows that the profits decrease by approximately 23 percent.

With the adoption of FPGA and ASIC mining systems, the hashing power has risen a significant amount. FPGAs outperform GPUs in terms of processing power. FPGAs also have far superior power efficiency than GPUs.

However, the massive cost of FPGA mining hardware makes it infeasible for the mining process. And this is why ASIC mining has replaced FPGA mining.

Mining Pool

Mining pools are groups of miners who agree to divide block rewards in accordance with the amount of hash power they contribute. This allows users to combine their hash power to compete with other dedicated miners and earn rewards.

F2pool, Antpool, ViaBTC, and Poolin are the top 4 mining pools that account for more than 50% of all blocks. All four of these mining pools are based in China.

Bitcoin Mining’s Electricity Consumption

Bitcoin presently consumes around 110 Terawatt Hours every year, according to the Cambridge Center for Alternative Finance (CCAF). This accounts for around  0.55 percent of worldwide electricity production, or about similar to the yearly energy consumption of tiny countries like Malaysia or Sweden. The mining process appears to be a high-intensity activity.

According to O’Dwyer and Malone’s study “Bitcoin Mining and its Energy Footprint,” published in 2014, the total power used for Bitcoin mining is roughly 0.1-10GW.

Arvind Narayanan (Associate Professor of Computer Science) in 2018 claimed that around 5 gigawatts of electricity per day are used for the mining process.

Marc Bevand also estimated that the miners consume approximately 4.12-4.73 TWh/year electricity for producing bitcoin.

Despite cryptocurrency trading being illegal in China, the country accounts for 60% of bitcoin mining worldwide. Sichuan is responsible for producing half the global hash power. Other popular mining regions include Yunnan, Xinjiang, and Inner Mongolia.

Hydroelectricity is used extensively in China’s southwestern provinces (for example, Sichuan). Electricity prices might drop as low as 2.5c/kWh during the rainy season. When the dry season resumes and electricity rates climb, some mining firms will relocate to Xinjiang to take advantage of lower-cost cal and wind energy.

For the remaining 40% of the miners, 35% of the global hash power is divided equally between Washington, New York, British Columbia, Alberta, Quebec, Newfoundland and Labrador, Iceland, Norway, Sweden, Georgia, and Iran. Most of these mining centers are in a hilly or mountainous region lying beside rivers.

Interesting story

One of the earliest transactions that demonstrated a real-world use case for bitcoin was posted in a forum. Lazlo offered to trade 100,000 bitcoins that were worth $25 for two pizzas from Papa John’s.

At the time of writing, that transaction is worth 3.45x dollars. That is crazy!

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