Bitcoins date back to 2008, with the registration of the bitcoin.org domain and the publication in October that year of ‘Bitcoin: A Peer-to-Peer Electronic Cash System’ by the pseudonymous Satoshi Nakamoto. The bitcoin network launched in 2009. This is perhaps one of the greatest digital achievements of recent times. This business is moving millions in investment every year. And this has mainly been made possible through the creation of application development interfaces (APIs).
“A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution”. This was how the creator of bitcoin outlined the promising concept, which at the time was just a whitepaper. “We propose a solution to the double-spending problem [i.e. bank involvement] using a peer-to-peer network, ” continues the document that gave rise to this cryptocurrency.
bitcoins are still part of the fintech scene, where new ideas, projects and startups are continuously emerging, constantly refreshing the market with original investment opportunities, as ideas constantly appear and disappear because of tiny details. The history of bitcoins and their outlook suggest that the cryptocurrency is in good health and has a future, although its instability means that it will never be a global virtual currency.
Some specialists in the sector believe that the upward trend in bitcoins will hold during 2016, remaining between 350 and 550 dollars. However, not surprisingly, some other analysts don’t rule out a slip back towards 300 dollars. It is currently comfortably over 500 dollars (as of 2 June 2016) and has been on a clear upward trend since October 2015.
The chart below shows the CoinDesk BPI (bitcoin price index):
Prudence: with 2013 in mind
We are a long way from the peak when cryptocurrency was priced at over 1,200 dollars, in late 2013. During the period, until the virtual currency fell to well below 300 dollars, some bitcoiners made money from monetary speculation, and the large data centers for bitcoin mining found themselves in a very lucrative field, until the drop in prices sucked the profitability out of professional mining and renting servers for this purpose.
However, since mid-2015 some interesting factors have arisen that anticipate an increase in the volume of investment in bitcoins, and a change in the type of investors. Some key findings from the latest CoinDesk outlook report:
● Venture capital investment increased from 362 million dollars at the end of 2014 to 490 million dollars in 2015. The growth rate was down from 280% in 2014 to 36% in 2015.
● At the end of 2015, the volume of transactions and the number of major firms interested in bitcoins was four times higher than in 2014.
● There are expected to be some 16 million bitcoin virtual wallets in 2016, a 25% year-on-year increase.
Business development based on APIs
At present, there are some leading companies whose main business is the purchase, sale and use of bitcoins in the various fields requiring application development interfaces and blockchains, the technology behind it (transactions, M2M, prediction and privacy), including Coinbase, Bitpay, Blockchain, BlockCypher and Block.io.
All of these companies have one or more APIs that provide services in the bitcoin world. Coinbase offers an interface for the creation of bitcoin wallets; Bitpay for the management of payments in the cryptocurrency; Blockchain offers several interfaces for receiving payments, processing data blockchains, queries, transactions and virtual wallets; and BlockCypher and Block.io offer several simple and versatile APIs for the development of wallets and reliable blockchain applications.
● Coinbase. The Coinbase API enables development of bitcoin applications and the integration of bitcoin developments into existing third-party applications. The functionality offered includes:
– Creation of bitcoin virtual wallets.
– Purchase, sale, delivery and receipt of bitcoins.
– Safe storage of cryptocurrencies.
– Recovery and querying of historic price data.
– Receipt of notifications when a payment occurs.
– Payment-management functionality.
The testing process for the Coinbase API takes places in a testing environment or sandbox. In this case, the testing environment is executed in Testnet 3. Testnet is an alternative to the bitcoin blockchain. This provides developers with a testing scenario without having to use bitcoins or real value, and without the risk of causing any breakage in the chain of blocks on which bitcoin is based. Testnet 3 was created to simplify the whole testing process.
Coinbase currently has a number of mobile SDKs and libraries for application development. These are available in various programming languages: syntax such as Ruby, Python, Node.js, PHP and Java for libraries; and SDKs for both Android and iOS operating systems. Libraries are also available for the OAuth authentication protocol.
● Bitpay. Bitpay offers an API REST that its customers use to manage their invoices, issue reimbursements, administer accounts and obtain real-time information on bitcoin prices. Developers can use the API through HTTP and HTTPS requests, with the data being returned in JSON format, or, even more simply, by using libraries in programming languages such as PHP, Node.js and Ruby. The API uses an authentication protocol that they call BitAuth, under which each customer is assigned a specific identification ID.
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