Bitcoin Explained: Origins, Forks, and Why It Still Dominates Crypto

Book: Cryptocurrency QuickStart Guide: The Simplified Beginner’s Guide to Digital Currencies, Bitcoin, and the Future of Decentralized Finance
Author: Jonathan Reichental
ISBN: 978-1-63610-041-8
Chapter: 4

Some people say “Bitcoin” when they mean all of crypto. That used to annoy me. Then I read Jonathan Reichental’s chapter on Bitcoin and got why it happens. As of 2023, Bitcoin alone was roughly 40% of the entire crypto market. Ethereum sat at 20%. Everything else fought over the scraps. Bitcoin is basically Kleenex for cryptocurrency. The brand became the category.

This chapter zooms in on the coin everyone already knows the name of. But knowing the name and understanding what Bitcoin actually is, where it came from, and where it might go are very different things.

What Bitcoin actually is

Bitcoin is a digital asset that runs on a worldwide network of computers. Laptops, phones, servers. They all run open-source Bitcoin client software and connect to a peer-to-peer ledger. No bank in the middle. No admin panel.

A small style note that actually matters: lowercase “bitcoin” means the currency units. Capital “B” Bitcoin means the network. You will also see BTC as the ticker. Fifty bitcoins equals 50 BTC.

You do not need to run your own node to own Bitcoin. Hosting one gives you direct control over transactions and keys. Ownership comes down to your private key. Lose it, lose your bitcoin.

The origin story is a perfect storm

Bitcoin did not appear in a vacuum. Satoshi Nakamoto’s white paper dropped in October 2008, right as trust in banks was cratering during the Great Recession. The genesis block was mined January 3, 2009, with a message baked in: “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.” That is not subtle. Bitcoin was born as a response to a broken financial system.

The timeline Reichental walks through is worth knowing:

• August 2008: bitcoin.org registered anonymously
• October 2008: White paper published on a cryptography mailing list
• January 2009: Genesis block and first software release
• February 2010: First Bitcoin exchange prototype
• May 22, 2010: Pizza Day. 10,000 BTC for two pizzas. Those coins would be worth hundreds of millions today.
• August 2010: A hacker exploited a bug and created 184 billion bitcoins. The community forked the chain to undo it.
• February 2011: Bitcoin hit $1 parity with the US dollar on Mt. Gox

That Mt. Gox exchange later became infamous. Hackers stole over 800,000 bitcoins. Roughly 7% of all BTC in existence at the time. Gone.

Only 21 million bitcoins will ever exist. As of the book’s writing, about 19 million were already mined. Halving cuts the block reward roughly every four years. Started at 50 BTC per block, then 25, then 12.5, then 6.25. The last bitcoin is projected around 2140.

Satoshi wanted payments, not a portfolio bet

Here is the part that stuck with me. Alan, the teenager in Reichental’s fictional Forrest family, says something sharp at dinner: Bitcoin was not supposed to be something you talk about like stocks or real estate.

He is right. Nakamoto’s vision was peer-to-peer electronic cash. Anonymous. No banks. No governments. Trust nobody.

But reality took a hard left turn. Price went from $0.08 in 2010 to over $68,000 in 2021. “Hodling” (a misspelling of “holding” from a forum post) became a lifestyle. Institutions piled in. Bitcoin became an investment asset, not a payment rail.

Privacy, crime, and the inflation hedge debate

Bitcoin’s privacy story got complicated fast. Silk Road used BTC for illegal drug sales. Ransomware hackers demand Bitcoin. Law enforcement adapted. Public keys and transactions are on the record. Exchanges get subpoenaed. The FBI recovered 63.7 bitcoins from a ransom case in 2021. Anonymity is not what it used to be.

Then there is the inflation hedge narrative. Bitcoin has a fixed supply like gold. Governments print fiat money. So BTC should hold value, right? Maybe. But Bitcoin dropped 80% in December 2017. Fell 50% in March 2020. Fell 53% in May 2021. A hedge that swings that hard is a rough hedge.

Hard forks and soft forks

When Bitcoin users disagree on the rules, the chain can split. That is a fork.

Bitcoin Cash (BCH) is the famous example. August 2017. Some users wanted bigger blocks (more than 1MB) for faster, cheaper everyday payments. They hard forked after block 478,558. Hard fork means two separate blockchains. If you held BTC at the fork, you got an equal amount of BCH.

Soft forks are gentler. Like a Blu-ray player that still plays DVDs. Old nodes can still participate. SegWit is a soft fork that moved signature data outside blocks to fit more transactions in.

Over 100 hard forks have spun off Bitcoin. Bitcoin SV (BSV) forked from Bitcoin Cash and claims to be the “real” Bitcoin. None of them dethroned the original. Not even close.

Why Bitcoin still wins

Reichental gives a few reasons, and I think he is mostly right:

Network effect. Bitcoin is the entry point for most new crypto users. Forty percent market share is not an accident.

Layer 2 fixes without forking. The Lightning Network acts like an HOV lane. Transactions happen off the main chain, then settle on it later. Faster and cheaper without splitting the community.

First-mover advantage. Money’s value is partly belief. Bitcoin has the most belief, the most awareness, the most institutional backing.

Reichental himself does not buy the “Bitcoin is forever” argument. Environmental concerns around proof-of-work, plus the crypto culture’s dislike of monopolies, leave room for challengers. History is full of dominant players getting replaced.

Pros and cons, honestly

The chapter lists advantages with an “OK, but” for each. Smart format.

No intermediaries. You control your money. But miners charge fees. Exchanges charge more. And anonymity is not absolute.

Cross-border payments. Bitcoin does not care about borders. But most merchants still do not accept it.

Irreversible transactions. Great for merchants tired of chargebacks. Terrible if you send to the wrong address.

Convenience. Wallets set up fast. Paying bills with a credit card is still easier.

Challenges are real too. Volatility (1-3% daily swings vs less than 1% for USD/EUR). Slow throughput (about 3 transactions per second vs Visa’s 45,000). Criminal reputation. Environmental impact. Tax headaches. Theft risk.

Bitcoin.org still says it is experimental. That is not a disclaimer. That is a warning.

Where Bitcoin goes from here

After 2140, miners live on transaction fees alone. Today fees are less than 10% of miner income. That transition is more than a century away, but it matters.

Near term, politics and economics drive the price more than code. Reichental’s bottom line: only invest what you can afford to lose. Watch whether Bitcoin actually gets used for real commerce, not just speculation. Without utility, price is just crowd mood.

I came away from this chapter respecting Bitcoin more as a cultural and technological milestone than as something I would use to buy coffee tomorrow. The vision was pure. The reality is messy, volatile, and mostly about storing value. Both things can be true.

Previous: The Role of Cryptography in Crypto
Next: Ethereum and Smart Contracts Explained