We're seeing another year wind to a close, and many are ready to take off for the holidays and speculate about what to expect from crypto in 2022. But this is also a time to take stock of the time that's passed—and when you do it's clear that we lived through an explosive year for crypto in 2021. That's why in this article we'll be looking back at some of the metrics and achievements that drew a lot of attention to Bitcoin in 2021. Without further ado, here are some of the highlights that are worth taking note of.
Bitcoin got its first major upgrade since 2017
Decentralized cryptocurrencies are, by their very nature, not under the control of a central authority like a company or bank. This means that there is no single entity that can upgrade Bitcoin. Rather, consensus has to be achieved among the people who actually participate in the network in order for an upgrade to take place.
As a result, the last Bitcoin upgrade was back in 2017. This changed in June 2021, however, when the overwhelming majority of miners pledged support for the "Taproot" update, which was finally implemented in November. Taproot is actually a collection of Bitcoin Improvement Proposals (BIPs) which serve functions like making it faster and more efficient to verify transactions. If you're interested in a more technical look at what Taproot does and how it works, Trezor's Taproot breakdown does just that.
One of the main selling points of this upgrade was the fact that it can allow more smart contracts to be efficiently created on the Bitcoin blockchain. Up until now, Bitcoin has been far from a destination of choice for smart contracts, with the overwhelming majority being handled on other blockchains such as the Etheruem network. With the explosive recent growth of "decentralized finance" applications that rely on smart contracts, this could be a step towards making Bitcoin more adaptable to new use cases.
Chinese regulators couldn’t stop Bitcoin’s hashrate from soaring
One of the biggest stories to shake the cryptocurrency industry this year was the news in May 2021 that China was giving the boot to crypto miners in the country. While China has often taken an adversarial stance to cryptocurrencies like Bitcoin, it still served as a key destination for crypto mining ever since the network launched in 2009 thanks to factors like cheap electricity.
With miners being suddenly forced to leave China, many feared the worst. After all, cryptocurrency miners are responsible for a network’s hashrate—which serves as an indicator of the amount of computation resources that are available to the network. In fact, a cryptocurrency’s hashrate is often seen as a reflection of its overall decentralization.
However, when China kicked out miners, other parts of the world opened their doors. As a result, Bitcoin’s hashrate was not only able to recover from the drop it experienced after China’s crackdown, but has actually since soared to a higher rate than ever before.
Bitcoin price set a new all-time high
Despite Bitcoin’s recent price decline over the last few weeks, it is absolutely worth mentioning that 2021 was the year in which Bitcoin set a new all-time high. On November 10, Bitcoin briefly reached a price high of around $68,950 per coin. Around the same time, the cryptocurrency market as a whole reached a $3 trillion dollar valuation. The current Bitcoin price has retreated nearly 30% since then, but prices still exceed highs achieved in previous years—and even previous all-time highs.
Forbes "30 Under 30" List Includes 21 Bitcoin and Blockchain Innovators
Forbes’ annual "30 Under 30" list rounds up young influential and innovative figures across twenty industries. This year, the outlet welcomed 21 figures from the Bitcoin and blockchain landscape across industries like finance, social impact, consumer tech, and more.
Senior Forbes contributor Nina Bambysheva noted that “2021 will be marked not just as the year of the Great Crypto Awakening, punctuated by record prices and eye-watering valuations for blockchain startups, but perhaps more importantly, by a fresh wave of talent flowing into the ever growing industry.”
Cryptocurrency was the most popular theme on Reddit
This year, no topic was more oft discussed on Reddit.com than cryptocurrency, which was mentioned at least 6.6 million times. As the 20th largest website in the world and one of the most popular places for assets and movements to be discussed, cryptocurrencies coming out as the top topic among users is no small feat.
According to the site’s Reddit Recap 2021, the cryptocurrency topic beat out other popular discussion points like gaming, sports, weddings, health and fitness, food and drink, and movies and television.
“In 2021, there were a lot of conversations on Reddit, but none more prominent than cryptocurrency,” Reddit announced. “For more than 10 years, Reddit has been home to over 500 cryptocurrency communities. As more redditors participate in conversation, whether it be for information, help, or to share major successes, Reddit continues to be the hub for cryptocurrency enthusiasts.”
The year that Bitcoin became legal tender in a country for the first time
2021 was the year that Bitcoin, for the first time ever, became a country's recognized legal tender. El Salvador, in a hastily passed and admittedly contentious move, made Bitcoin the country's second currency alongside the US dollar.
This continues to be massive news—and a massive experiment—around the world, though unsurprisingly in the Bitcoin community most of all. Especially when you consider the fact that, just a few years ago, the idea of even buying something as trivial as pizza with bitcoin was a memorable event. Since the country’s "Bitcoin Law" came into effect, President Nayib Bukele has said that the country purchased millions of dollars worth of bitcoin in an attempt to "buy the dip".
For more about the situation in El Salvador, check out Coinmap’s deep dive into the world’s first "Bitcoin Country".
90% of all Bitcoin has now been mined
As of December of this year, 90% of Bitcoin’s maximum supply has officially been mined. The currency, often likened to a form of digital gold, was specifically designed to be scarce. This, its proponents believe, is a better solution to the fact that fiat currencies like the US dollar are essentially infinite since more money can be printed by central banks, inevitably resulting in issues such as inflation.
When it comes to Bitcoin, just shy of 21 million coins will ever be issued on the Bitcoin blockchain. This is the currency’s maximum supply, and its circulating supply is even lower due to the fact that many coins have been lost or destroyed.
With 90% of Bitcoin’s maximum supply now having been mined, the currency’s scarcity has theoretically increased. It is worth noting, however, that the final 10% of Bitcoin’s supply is unlikely to be mined before the year 2140 due to a process known as block halving.
A new year, and new metrics
With the new year around the corner, there’s no telling what news might be in store for Bitcoin in 2022. For us here at Invity, we’re hoping that it will be the year that both outside observers and traders alike become increasingly crypto-educated.
Feel free to let us know which crypto metrics and achievements caught your eye in 2021, and tell us what you’re hoping to see in the new year!