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A recap of the leading stories that grabbed headlines in 2021
As intangible as Bitcoin might seem, Bitcoin infrastructure has boomed in the last year. Despite government bans on miners, global economic uncertainty and a new breed of misleading narratives from every angle, the industry is stronger today than ever before, with more hashpower, more self-custody and more independence than Bitcoin detractors would care to admit.
In building a new, undefined industry, companies like Trezor are committed to doing things right. There can be no compromise when it comes to digital ownership. A decentralized economy will prove essential to humanity’s next phase and digital money is the most important thing to focus on.
But it’s not simply an online economy: Bitcoin’s future depends on decentralized infrastructure. The physical hardware that verifies transactions, mines new blocks, and secures keys, is key to defending against network compromise. Making it easy and safe to use Bitcoin through improving this physical layer will be how Bitcoin succeeds.
Below we’ll cover some of the top Bitcoin moments of 2021, focusing on content highlights that hint at our future trajectory and those which we believe will spur Bitcoin adoption in the coming years.
The year of Taproot
Where the Bitcoin halving was the biggest story of 2020, Taproot was the equivalent for 2021. The SegWit upgrade was important in many ways, introducing a new way to allow the community to signal support for the upgrade — to avoid the slow long-tail adoption that followed SegWit v0 — and establishing a bright future for privacy in the Bitcoin ecosystem.
If you’re still not up-to-speed on Taproot, a number of helpful resources were published on Trezor Blog throughout the year.
To start, it may help to understand what practical benefits Taproot brings for you as a hardware wallet user. Essentially, Taproot has cut out major inefficiencies in how transactions are verified, making it cheaper and faster to send complex transactions. How, exactly? Find out below!
How Taproot will benefit hardware wallets
While the technical specifics of Taproot have been covered extensively by many Bitcoin and crypto news outlets, there’s one topic that was overlooked: the future of Taproot.
November’s upgrade was only the second in a series of improvements which will be brought about by SegWit, with many exciting new changes planned for future versions. Take a dive through CISA, Graftroot and quantum-resistance in this blog from Trezor ambassador Josef Tětek.
Taproot v2: how will the latest Bitcoin upgrade evolve in the future?
To top it all off, we discussed the above and more in a Twitter space with industry heavyweights Braiins and SlushPool, to see what the experts had to say about the activation process, the impact on miners, and plans for the future.
Have a listen to the talk below and make sure to join our next discussion live in person to ask our guests your most pressing questions!
Bitcoin for nations
The most significant Bitcoin headlines in the mainstream news this year did not focus on Taproot. Instead, leading publications across the world printed some variation of the words ‘El Salvador makes Bitcoin legal tender’. While disbelief, ridicule, and even outrage at the small Central American nation was woven throughout many of the articles that followed, the symbolic step away from the US Dollar has set a precedent that many other countries are set to follow.
Only small countries use Bitcoin: Congratulations, El Salvador!
With the world having entered this decade full of uncertainty, Bitcoin offers hope to countries whose dependence on the United States has left them on the precipice of a catastrophic fall. The safe money they had turned to has been diluted by reckless money printing and the only escape left from inflation is Bitcoin. With politicians of every creed starting to understand the benefits of hard money, it is only a matter of time before other nations scramble to adopt a Bitcoin standard.
While El Salvador’s motivations for turning to Bitcoin are not entirely transparent, a strong grassroots movement is already in place in the country and, should the population remain willing, it could become Bitcoin’s pivotal proving ground in front of a global audience.
How does Bitcoin survive a chip shortage?
This year has been volatile. Lumber, steel, packaging, fuel and practically every good that you can name has undergone supply shock, as inflation began to creep up in the wake of the pandemic. As mentioned earlier, Bitcoin also relies on physical goods, on efficient supply chains. When trade routes become gridlocked, Bitcoin’s growth also takes a hit.
In October 2021, the wait time for a delivery of microchips was over a year, as we published in an article discussing the implications of a chip shortage and what it could mean for Trezor and other Bitcoin hardware manufacturers.
How the global chip shortage affects crypto hardware
The situation is still far from resolved, and as we head into 2022 it looks like many parts of the industry will see continued disruption. While miners were somewhat spared much trouble thanks to an exodus of machines from China, with the hashrate now fully recovered it too will depend on a fresh supply of chips in the coming year.
At Trezor, we introduced reserve orders on our flagship Trezor Model T, to provide a buffer and reduce immediate demand. With many customers choosing to wait slightly longer for their delivery, we managed to keep supplies balanced through the busiest sales season of the year.
Going forward, we will continue to offer two purchase options on the Model T until the chip supply becomes more dependable, so you will always be able to access the security you need.
Trezor Suite: greater privacy, security and usability
The crowning achievement for Trezor this year was the official launch of Trezor Suite, a brand new desktop and web interface for Trezor hardware wallets. Trezor Suite unites three fundamental concepts — security, privacy and usability — that will allow Bitcoin to be used more effectively by more people, protecting the independence of individuals around the world.
In January 2022 the old Trezor Wallet interface will be discontinued, so now’s the perfect time to get acquainted with all the powerful new features. Get the most out of your Trezor and download Trezor Suite today.
Privacy
Protecting your privacy is essential to staying safe in a digital economy. While your Trezor can protect your keys from online attacks, the only way to prevent physical encounters is to anonymize your online activity.
That’s why Trezor Suite comes bundled with Tor, a privacy network that anonymizes your online activity. In just a couple of clicks your internet traffic will be rerouted through layers of encrypted servers, so not even your ISP will know what you are doing online.
Privacy in Trezor Suite: Introducing the Tor Switch
More privacy upgrades will be coming to Trezor Suite in future. Of these, the most anticipated feature is CoinJoin, a way to mix coins so they are no longer traceable back to any particular address. This will deliver a significant blow to blockchain surveillance companies, especially as CoinJoin transactions could cost roughly the same as regular ones.
Usability
Bitcoin is notoriously difficult to use, even for more experienced users. Recognizing the many hurdles to adoption, both new and old users will benefit from Trezor Suite’s comprehensive design. With everything you need to use Bitcoin in one place, you can focus on the things that matter.
From buying bitcoin direct to custody to bumping stuck transactions with RBF, Trezor Suite is the next step in adoption: full-featured for those who need it, clean and simple for those who don’t. Check out just how easy it is to buy bitcoin at competitive rates directly through Trezor Suite:
Compare crypto exchanges and buy bitcoin instantly with Trezor
Thanks to Trezor’s sister company Invity, you can be sure you are always interacting with a trustworthy exchange. If you’d rather eliminate trust completely, Invity also recently introduced a decentralized exchange (DEX) option where Ethereum smart contracts execute trades peer-to-peer, without the need for any third party involvement.
Security
As a desktop app, Trezor Suite isolates users from many of the threats found online. Phishing is still one of the most common cybercrimes and crypto users are by far the most affected.
Trezor Suite: Security made simple
While Trezor Suite can be used in a browser, it is safer and more powerful when used as a desktop app. Keeping everything self-contained ensures Trezor owners use their device correctly and have all the information and tools they need in one place.
Corporations warm up to Bitcoin
Last year, the publicly-listed software company Microstrategy made the decision to start holding Bitcoin. While it may have felt like a one-off impulse at the time, subsequent purchases amounting to over 122,000 Bitcoin — now 96% of the company’s value — showed unwavering commitment as the company began issuing bonds to let them stack even more.
Michael Saylor, MicroStrategy’s CEO, controversially positioned himself as a figurehead of the Bitcoin movement despite earlier comments about Bitcoin’s days being numbered. While this somewhat undermined his influence, his efforts to improve public perception of Bitcoin and provide educational materials such as Bitcoin for Everybody has won him back some fans.
Tesla and other institutions are a double-edged sword for Bitcoin
Following Saylor’s example, Elon Musk made headlines this year when he announced that Tesla had also bought Bitcoin. But the story did not end there, as Tesla soon sold a portion of their holding to ‘test liquidity’, while Musk also chose to drum up the tired narrative about the ecology of mining in order to protect his companies’ green credits (which amount to more profit for Tesla than car sales), while also causing widespread confusion by rallying meme-coin markets such as Dogecoin and Shiba Inu.
Filtering out the noise in 2022
Despite the growing institutional interest, it seems that few companies are capable of making head nor tails of Bitcoin. This is especially evident when one looks at the rise of brands suddenly championing buzzwords such as metaverse and web3 without exposing themselves to Bitcoin.
It is not just ignorance of the true potential that has driven this trend, but the knowledge that associating with these terms is a shortcut to tier-one press presenting the brands as fresh and ‘down-with-the-kids’.
While there is merit to the concept of non-fungible tokens, many of the brands who have purchased NFTs, released collections of virtual tokenized objects, or pledged to host exclusive events for token holders, are ostensibly marketing stunts that do not leave much to get excited about.
In this regard, 2021 can be seen as the first stirrings of something much more significant coming in future: brands engaging with decentralization in order to protect their assets, not merely to sell more products. Let’s hope 2022 will bring more level-headed and informed discussions around the company boardrooms. Either way, Bitcoin remains for individuals, not incumbents.
How Bitcoin boomed in 2021 was originally published in Trezor Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.