The year for Bitcoin — A 2021 roundup of the flagship crypto

While
2021
did
provide
some
sort
of
respite
for
investors
operating
across
the
global
crypto
landscape,
it
was
still
largely
been
driven
by
fears
that
first
reared
their
ugly
heads
back
in
2020.
From
rising
inflation
rates
to
another
wave
of
coronavirus-related
outbreaks,
the
ground
beneath
everyone’s
feet
continued
to
move
even
without
them
knowing. 

For
example,
while
everyone
assumed
that
Bitcoin
(BTC)
would
hit
a
price
target
of
$100,000
quite
easily

including
many
traditional
financial
institutions

by
the
turn
of
the
new
year,
the
flagship
crypto
continued
to
showcase
a
high
degree
of
volatility
despite
having
touched
an
all-time
high
of
$69,000
earlier
in
November,
and
essentially
just
moved
in
a
broad
sideways
channel
for
the
past
ten
months.

That
said,
there
have
been
a
lot
of
developments

mostly
positive
but
some
negative
as
well

surrounding
Bitcoin
this
year.
In
this
piece,
we
will
look
to
explore
many
of
these
themes
and
much
more.
So,
without
any
further
ado,
let’s
get
straight
into
the
heart
of
the
matter.

Adoption
gains
momentum
as
El
Salvador
leads
the
roost

Known
as
the
“Land
of
Volcanoes,”
the
Central
American
nation
of
El
Salvador
shocked
everyone
in
2021
by
becoming
the
first
country
to

adopt
Bitcoin
as
legal
tender
,
potentially
paving
the
way
for
other
countries
to
follow
suit,
especially
those
being
faced
with
issues
related
to
rampant
inflation

looking
at
you,
Turkey,
Venezuela
and
Zimbabwe.

And,
even
though
the
move
hadn’t
quite
converted
El
Salvadorans
into
overnight
BTC
proponents,
President
Nayib
Bukele
has
been
quite
strategic
in
his
approach
when
it
comes
to
overhauling
his
country’s
economic
woes.
Citizens
were
given
access
to
a
Chivo
crypto
wallet
while
he
has
also
vowed
to
address
the
internet
connectivity
issues
that
currently
plague
the
country.

Lastly,
El
Salvador’s
highly
touted
“Bitcoin
Bond”

which
makes
use
of
a
federated
BTC
sidechain
to
issue
a
legally
viable
monetary
bond

is
being
viewed
by
many
as
an
attractive
money-making
avenue
since
it
offers
users
with
a
novel
means
of
investing
in
the
currency
as
well
as
providing
them
with
a
chance
to
obtain
the
county’s
citizenship.

Bitcoin
transactions
garner
momentum

The
Lightning
Network
(LN)
showcased
a
tremendous
amount
of
growth
over
the
course
of
2021
with
a
growing
amount
of
funds
being
poured
into
various
LN
channels

especially
with
more
nodes
popping
up
online,
seemingly
with
each
passing
day.

Statistically
speaking,
there
is
more
than
3,300
BTC

locked
across
various
public
Lightning
channels
,
at
the
time
of
writing,
with
more
funds
likely
contained
within
other
private/unannounced
channel
networks
that
are
currently
being
operated
between
various
exchanges.

In
terms
of
improvements,
the
infrastructure
of
the
Lightning
Network
underwent
a
number
of
major
overhauls
this
past
year
(such
as
Amboss),
improving
the
systems’
native
node
administrative
capacity
as
well
as
retail
customer
UX
for
Lightning
wallets.
Looking
ahead,
LN’s
BOLT-12
module

promises

to
make
recurring
payments
easier
as
well
as
enable
other
useful
features
such
as
donations
via
static
QR
codes.

Taproot
makes
its
long-awaited
debut

One
of
the
biggest
breakthroughs
for
the
Bitcoin
network
since
the
SegWit
overhaul
of
2017

a
process
by
which
the
block
size
limit
on
asset’s
blockchain
was
increased
by
removing
signature
data
from
transactions
included
in
each
block

was
the

activation
of
the
Taproot
upgrade
.

Taproot
is
basically
designed
to
help
the
flagship
cryptocurrency’s
community
of
backers
and
core
developers
gain
access
to
better
a
“policy
privacy”
framework,
allowing
them
to
not
reveal
all
of
the
possible
ways
through
which
they
could
potentially
spend
their
BTC.

To
be
a
bit
more
technical,
the
update
enhances
the
efficacy
of
certain
multisignature
setups
all
while
making
individual
transactions
on
the
Lightning
Network
more
secure
and
privacy-oriented.

That
being
said,
in
order
for
these
advantages
to
truly
see
the
light
of
day,
a
little
more
work
may
be
needed,
particularly
on
the
MuSig2

a
simple
and
highly
practical
two-round
multisignature
scheme
that
makes
transaction
facilitation
hassle-free
for
Bitcoiners

front
as
well
as
in
relation
to
certain
technical
niches
associated
with
Lightning
Network-based
client
implementations
and
improved
hardware
wallet
support
functionality
(meant
solely
for
Taproot).

Mining
disruption
caused
by
China

A
piece
of
news
that
had
Bitcoiners,
as
well
as
crypto
enthusiasts
in
general,
a
little
shook
this
past
calendar
year
was
when

China
imposed
an
unequivocal
blanket
ban

on
its
local
crypto
economy.

Even
though
the
eastern
powerhouse
has
issued
many
such
prohibitions
in
the
past,
this
time
the
threat
was
a
lot
more
serious,
as
a
large
number
of
crypto
mining
firms
had
to
relocate
from
the
country’s
borders
in
order
to
keep
their
operations
alive

with
many
even
having
to
close
shop
permanently.

Following
the
mass
exodus
that
took
place
after
the
ban
came
into
effect,
Bitcoin’s
hash
rate
dropped
quite
to
record
lows

sliding
from
around
180
exa-hashes
per
second
(EH/s)
to
about
90
exa-hashes
per
second
(EH/s)

only
to
make
a
swift
recovery
shortly
thereafter.
Much
of
the
BTCs
hash
rate
recovery
was

attributed

to
miners
migrating
to
more
hospitable
parts
of
the
world
including
the
United
States
of
America,
Kazakhstan,
Canada,
Belarus,
etc.

After
the
ban,
the
crypto
market
also
witnessed
a
growth
in
the
number
of
publicly-listed
miners,
showcasing
the
ability
of
these
firms
to
tap
into
debt
capital
markets
as
well
as
scale
dramatically
thanks,
in
large
part,
to
their
ability
to
borrow
massive
sums
of
money
against
their
natively
mined
crypto.

Infrastructure
development
surges

Bitcoin’s
ever-growing
community
of
backers
continued
to
pour
money
into
the
digital
asset’s
technical
development.
In
this
regard,
organizations
such
as
Spiral,
Blockstream
and
MIT’s
Digital
Currency
Initiative
doled
out
sizable
funding
as
well
as
sponsorship
grants
to
help
Bitcoin
Core
devs
based
all
across
the
globe.

Other
organizations
that
also
made
sizable
donations
to
help
spur
the
growth
of
the
Bitcoin
ecosystem
included
Chaincode
Labs,
the
Humans
Rights
Foundation
and
a
cryptocurrency
exchange
BitMEX,
whose
grants
were
meant
to

help

awardees
carry
forward
their
work
in
relation
to
improving
the
reliability
of
the
Lightning
Network’s
payment
system
as
well
as
improving
the
implementation
of
the
Stratum
v2
Bitcoin
mining
pool
protocol.

Major
mainstream
companies
add
Bitcoin
to
their
coffers

No
story
regarding
Bitcoin’s
recently
concluded
calendar
year
could
be
complete
without
mention
of
how
some
of
the
biggest
investors
in
the
world
continued
to
load
up
on
the
flagship
crypto.
In
this
regard,
2021
started
off
with
the
Dogefather
aka
Tesla
CEO
Elon
Musk

investing
a
cool
$1.5
billion
in
Bitcoin
,
making
it
one
of
the
largest
investments
into
the
flagship
crypto
by
a
mainstream
corporation.

For
a
brief
window
of
time,
Tesla
even
noted
in
an
SEC
filing
that
it
was
going
to
allow
its
clients
to
use
BTC
as
a
medium
of
payment
for
its
various
offerings

a
decision
that
was
eventually
rescinded.
As
was
to
be
expected,
soon
after
Musk’s
apparent
backing
of
the
digital
asset
became
public
knowledge,
its
price
shot
up
to
a
then
all-time
high
of
$43,000
within
a
matter
of
minutes.

That
said,
the
only
man
to
outdo
Musk
with
his
Bitcoin
purchases
this
year
was
Microstrategy
CEO
Michel
Saylor
whose
maximalist
attitude
was
reflected
by
his
constant
accrual
of
the
premier
cryptocurrency,
both
when
it
was
hovering
at
its
all-time
highs
as
well
as
lowest
levels.
Numbers-wise,
Microstrategy
now
lays
claim
to
a
whopping
124,391
BTC
that
were
purchased
for
nearly
$6
billion.
Conservative
estimates
suggest
that
the
firm
has
already
accrued
$2.1
worth
of
profits
from
its
BTC
investments.

Financial
institutions
join
in
the
action

Soon
after
Musk
made
his
foray
into
the
world
of
Bitcoin,
a
number
of
other
financial
services
giants
such
as
Mastercard
and
U.S.-based
lender
Bank
of
New
York
Mellon
proceeded
to

start
offering
their
clients

a
wide
range
of
crypto-related
services
spanning
from
custody
to
payments.

Similarly,
U.S.
Bank,
America’s
fifth-largest
commercial
financial
entity,
also
revealed
that
it
was
offering
its
clients
a

fully
functional
crypto
custody
service
,
assisting
them
in
storing
their
private
keys
for
Bitcoin,
Bitcoin
Cash
(BCH)
and
Litecoin
(LTC)
with
help
from
NYDIG.
State
Street
and
Northern
Trust
were
among
the
other
major
U.S.-based
financial
institutions
to
disclose
similar
plans.

At
the
start
of
the
year,
Nasdaq-listed
Marathon
Patent
Group
went
ahead
with
a

$150
million
purchase
of
Bitcoin

as
part
of
its
reserves,
a
decision
that
was
followed
by
social
media
juggernaut
Twitter
enabling
a
‘crypto
tipping’
option
for
its
patrons.
Not
only
that,
but
Jack
Dorsey
helmed
payments
provider
Square
also
announced
that
it
was
going
to
be
allocating
5%

estimated
to
be
worth
$170
million

of
its
assets
to
Bitcoin.

Lastly,
a
number
of
other
firms
including
WeWork,
AXA
and
Substack
also
announced
their
decision
to
start
accepting
payments
in
Bitcoin

a
move
that
was
aped
by
companies
of
a
relatively
smaller
market
cap
across
the
globe.

Conversations
surrounding
Bitcoin’s
environmental
impact
grew

Another
major
topic
of
contention
surrounding
Bitcoin
last
year
was
the

currency’s
environmental
impact
,
with
an
increasing
amount
of
studies
revealing
the
digital
currency’s
massive
annual
power
consumption.

To
put
things
into
perspective,
a
University
of
Cambridge
analysis
noted
that
Bitcoin

utilized

707
kWh
per
transaction
which
works
out
to
a
whopping
approximately
121.36
terawatt-hours
a
year.
This
energy
has
been
touted
to
be
more
than
the
power
needs
of
many
major
countries
like
Argentina,
the
Netherlands,
and
the
United
Arab
Emirates
(UAE)
among
others.

In
recent
months,
however,
an
increasing
number
of
mining
firms
are
transitioning
toward
the
use
of
renewables.
For
example,
MintGreen,
a
Canada-based
cleantech
cryptocurrency
mining
outfit
recently
signed
a
deal
with
Lonsdale
Energy
Corporation
to
supply
heat

generated
from
BTC
mining

to
the
residents
of
North
Vancouver
in
British
Columbia
by
the
start
of
2022.

Similarly,
many
other
firms
including
CleanSpark
and
Bit
Digital
have
transitioned
toward
a
more
environmentally
conscious
means
of
harvesting
Bitcoin.
In
fact,
a
study
recently
released
points
to
the
fact
that
hydroelectric
power
is
the

most
common
source
of
energy

for
miners
presently,
with
a
little
over
60%
of
all
mining
farms
across
the
globe
utilizing
this
renewable
power
medium
to
facilitate
their
day-to-day
operations.

Global
regulatory
scrutiny
increases
greatly

China
wasn’t
the
only
country
to
formulate
and
initiate
a
comprehensive
ban
on
Bitcoin
this
year
with
many
other
nations
including
Egypt,
Algeria
and
Iraq
also
imposing
blanket
bans
on
crypto
businesses
operating
within
their
borders.
This
could
partially
have
been
because,
over
the
course
of
Q3,
Q4
2021,
more
than
a
dozen
public
and
private
mining
companies
were
able
to

accrue

hundreds
of
millions
of
dollars,
forcing
regulators
to
start
taking
notice
of
this
space
like
never
before.

Monetarily
speaking,
the
increased
regulatory
pressure
was
compounded
by
the
fact
that
Bitcoin
miners
were
able
to
generate
over
$15.3
billion
in
revenue,
a
number
that

represented

a
year-on-year
increase
of
206%
when
compared
with
2020.
This
may
have
caused
governments
to
start
looking
at
ways
in
which
to
control
this
sector’s
exponential
growth.

In
some
countries
like
India,
where
cryptocurrencies
seemed
to
have
gained
a
strong
foothold
over
the
last
few
months,
the
government
decided
to
start
looking
at
ways
of

introducing

new
laws

namely
the
Cryptocurrency
and
Regulation
of
Official
Digital
Currency
Bill,
2021

seeking
to
prohibit
“private
cryptocurrencies,”
a
term
whose
definition
that
has
yet
to
be
made
clear.
That
said,
India
is
still
keen
on
promoting
the
use
of
blockchain
tech
as
well
as
certain
other
digital
assets
that
can
wholly
fall
under
its
regulatory
purview.

Bitcoin
ETF
makes
its
debut
on
the
NYSE

October
19,
2021
was

hailed
as
a
landmark
date

by
crypto
enthusiasts
all
over
the
globe,
as
it
was
the
day
when
the
world
saw
the
debut
of
the
world’s
first
Bitcoin
exchange-traded
fund
(ETF)
on
the
New
York
Stock
Exchange
(NYSE).

ProShares’
Bitcoin
Strategy
ETF
became
the
world’s
first
U.S.
exchange-traded
fund
based
on
Bitcoin
futures
to
be
approved
by
the
United
States
Securities
and
Exchange
Commission
(SEC),
allowing
investors
across
the
board
with
a
novel
means
of
investing
in
the
premier
cryptocurrency.

As
soon
as
the
offering
made
its
debut,
it
attracted
a
record
amount
of
institutional
capital.
In
fact,
the
demand
was
so
monumental
that
soon
after
its
launch,
the
CME
Group

ProShares’
Bitcoin
Strategy
ETF’s
parent
issuer

had
to
file
an
application
with
the
SEC
asking
the
regulatory
body
to
lift
any
restrictions
pertaining
to
the
maximum
amount
of
contracts
that
one
could
buy
in
relation
to
the
ETF.

Coinbase
IPO

Another
event
that
may
not
be
associated
primarily
with
Bitcoin
but
was
representative
of
the
currency’s
growing
market
clout
(as
well
as
mainstream
acceptance)
was
that
of

Coinbase’s
initial
public
offering

(IPO)
that
saw
the
cryptocurrency
gain
approval
of
the
traditional
finance
market.

Coinbase’s
IPO
debut
saw
the
stock
open
at
a
price
point
of
$381,
a
number
that
was
significantly
higher
than
its

pre-listing
reference
price
of
$250


something
that
directly
alluded
to
heightened
institutional
demand
for
the
crypto-focused
stock.

Looking
ahead
toward
2022

Moving
into
the
new
year,
Bitcoiners
all
over
the
world
are
anxious
to
see
how
the
future
plays
out
for
the
market,
especially
with
fears
of
inflation
and
economic
instability
looming
large
across
the
globe.
That
said,
it
appears
as
though
the
ecosystem
surrounding
the
digital
asset
has
continued
to
mature,
with
an
increasing
number
of
conferences
and
meetups
all
set
to
take
place
in
2022.



Related: NFTs
find
true
utility
with
the
advent
of
the
Metaverse
in
2021

Also,
as
an
increasingly
decentralized
future
looms
closer,
more
people
are
beginning
to
realize
the
importance
of
securing
their
BTC

especially
in
the
way
they
spend/receive
their
coins
as
well
as
facilitate
their
transactions
in
a
private
manner.

read original article here