Born out of the 2008 crisis
On October 31, 2008, six weeks after Lehman Brothers collapsed, someone calling themselves Satoshi Nakamoto posted a nine-page white paper describing 'a peer-to-peer electronic cash system' (Nakamoto, 2008). The genesis block of January 3, 2009 embedded a Times headline about a second bank bailout. On May 22, 2010, Laszlo Hanyecz paid 10,000 BTC for two pizzas, still celebrated as Bitcoin Pizza Day. Satoshi's identity remains unknown.
How it works
Transactions are grouped into blocks roughly every ten minutes. Miners compete to solve a costly puzzle (proof of work); rewriting history would take most of the network's computing power, which prevents double spending (Böhme et al., 2015). Supply is capped at 21 million, and the block reward halves every 210,000 blocks; the April 2024 halving cut it to 3.125 BTC.
Money or speculative asset?
Yermack (2015) argues Bitcoin's volatility makes it a poor unit of account and store of value; fans call it 'digital gold' against inflation. Compare the logic of central banking in the quantity theory of money. El Salvador made it legal tender in 2021, and the US SEC approved spot ETFs in January 2024, yet Griffin and Shams (2020) found evidence that Tether issuance propped up 2017 prices.
Korea: kimchi premium and regulation
Makarov and Schoar (2020) documented Korean prices far above global ones in 2017–2018, sustained by capital controls that blocked arbitrage. Korea now requires real-name bank accounts for exchanges (2021), enforces the Virtual Asset User Protection Act (July 19, 2024), and plans to tax crypto gains above ₩2.5 million at 22% from January 2027, a date that has slipped before.
FAQ
- Who controls Bitcoin?
- No company or government; nodes and miners follow a shared protocol, and changes need broad consensus.
- Is it legal in Korea?
- Yes, trading on registered exchanges is legal, with real-name accounts and user protection rules.
Sources reviewed: 2026-11-02
References
- Nakamoto, S. (2008). Bitcoin: A peer-to-peer electronic cash system. The original nine-page white paper.
- Böhme, R., Christin, N., Edelman, B., & Moore, T. (2015). Bitcoin: Economics, technology, and governance. Journal of Economic Perspectives, 29(2), 213–238. A clear overview of Bitcoin's economics and governance.
- Yermack, D. (2015). Is Bitcoin a real currency? An economic appraisal. In D. Lee Kuo Chuen (Ed.), Handbook of digital currency (pp. 31–43). Academic Press. Argues Bitcoin behaves more like a speculative asset than money.
- Makarov, I., & Schoar, A. (2020). Trading and arbitrage in cryptocurrency markets. Journal of Financial Economics, 135(2), 293–319. Documents large cross-country price gaps, notably in Korea.
- Griffin, J. M., & Shams, A. (2020). Is Bitcoin really untethered? The Journal of Finance, 75(4), 1913–1964. Evidence that Tether flows supported 2017 prices.
- 국세청. (n.d.). 가상자산 과세 안내. Korea NTS guide to virtual asset taxation.
- 국가법령정보센터. (n.d.). 가상자산 이용자 보호 등에 관한 법률. Korea's 2024 Virtual Asset User Protection Act.