History of Bitcoin

Introduction

Bitcoin is a hegemon among cryptocurrencies. The moment of its emergence marked a new era of digital finance. Bitcoin indeed represents a significant step forward in the development of human civilization. Its invention opened new perspectives for economic and social relations that can change the face of the global financial system. Let's delve into the history of the formation of such an amazing phenomenon as Bitcoin.

Inception - 2008

One of the most important things to know about BTC is that it did not previously exist in the world. It is a completely new section in the economy.

The era of cryptocurrencies began in 2008, when a mysterious figure under the pseudonym Satoshi Nakamoto released a document titled "Bitcoin: an electronic monetary system between participants".

In this paper, Nakamoto first introduced the concept of BTC and blockchain based on the ideas of decentralization and transparency. He described BTC as a public decentralized network where every transaction is recorded in a publicly available log and validated by the power of the network.

The launch is 2009

On January 3, Nakamoto created the first block on the Bitcoin network, known as the "genesis block" or "block #0" on the BTC network. This is where BTC's ascent begins. In the beginning, BTC had no practical value and was mainly used to test the network and demonstrate the principles of blockchain technology. However, as time went on, more and more people began to learn about BTC and its potential.

After 6 days, Satoshi Nakamoto presented the first version of the client for working with BTC - Bitcoin Core v.0.1.

Another 6 days later, the first BTC transaction was made, where the recipient of the transfer was programmer Hall Finney, who also helped in testing the first cryptocurrency and had the opportunity to communicate with Satoshi Nakamoto. During the same period, Nakamoto allowed crypto-enthusiastic developers to join the work on bitcoin, and towards the end of the year, the second version of the bitcoin client, Bitcoin Core v 0.2, was released online.

Disappearance of the creator - 2010

In 2010, the first bitcoin exchange called Bitcoin Market opened, and the bitcoin exchange rate was determined for the first time: 1 BTC was worth about 0.003 US dollars. Already on May 22, the first purchase with bitcoins takes place, when American developer Laszlo Hanech bought two Papa John's pizzas for 10 thousand BTC. He found a person willing to accept the cryptocurrency in exchange for food through the bitcointalk forum. Since then, May 22 has become a holiday known as "bitcoin pizza day."

In July of the same year, the Mt.Gox exchange started its work. On December 12, Satoshi Nakamoto permanently disappears from the bitcointalk forum. His last messages can be read there.

Free floating - 2011

In 2011, Bitcoin became the subject of increasing attention and interest. It became a widely used means of payment on the Silk Road darknet marketplace. This anonymous trading platform existed until 2013.

Bitcoin's popularity as a means of payment on the darknet has damaged its reputation, leading to the cryptocurrency being associated with fraud. Regulators still recall the interest of shady sellers in BTC as an argument against the proliferation of digital assets.

As the value of BTC increased, the first hacking attacks began. In June 2011, the first Mt.Gox hack occurred, in which 2,000 BTC were stolen, which at the time amounted to about $30,000.

First changes - 2012

On November 28 of this year, the first halving of BTC took place, that is, making it harder to mine. At the same moment, Satoshi's followers create the Bitcoin Foundation organization. The main objectives of the project were the standardization of BTC, as well as the protection and development of the cryptocurrency.

By the middle of the year, the bitcoin rate reaches $5, and the BitPay payment platform reported that the number of sellers who accept payment in cryptocurrency has exceeded a thousand.

New peaks - 2013

In 2013, Mt.Gox became the largest crypto exchange. At its peak, it served 70% of all Bitcoin transactions.

At one point, the price for 1 BTC exceeded the then-unbelievable $100. In November of the same year, bitcoin reached a value of $1000 for the first time. During this period, there was a significant influx of investment in the bitcoin industry, and new cryptocurrencies also emerged. Bitcoin sales exceeded $1 million in a month for the first time.

By May 2013, there were already 10 different digital assets on the cryptocurrency market, including Lightcoin. In August, another major crypto asset called XRP (Ripple) joined them.

Challenges - 2014

BTC faced difficulties in 2014.

Mt.Gox fell victim to the first major hack of a crypto exchange. 850,000 BTC was stolen, making it the largest BTC theft in history. At the time, the value of the theft was $460,000,000,000,000 and at current exchange rates, it was worth about $9.5 billion. After this event, the price of bitcoin plummeted by 50%. While hacks of cryptocurrency exchanges have happened since Mt.Gox, they rarely reached a scale comparable to what happened to Mt.Gox. Shortly afterward, the company filed for bankruptcy. In late 2021, creditors and the Tokyo District Court reached an agreement on a plan to rehabilitate Mt. Gox, ending a legal battle that lasted seven and a half years.

New giant - 2015

The beginning of the year was bright, as crypto exchange Coinbase raised $75 million in investment on January 20, a record for a cryptocurrency company.

By February, the number of merchants accepting payment in bitcoin passed 100,000.
July 30, 2015 turned out to be a landmark date for the cryptocurrency community: the Etherium network was launched. Since then, Etherium has become the second largest crypto asset by market capitalization. This innovative platform introduced the world to smart contracts and, ultimately, decentralized finance. Thanks to this, the Etherium blockchain was able to create a vast ecosystem backed by its own currency, ether (ETH).

Recognition and theft - 2016

In March, Japanese regulators recognized the cryptocurrency as a financial instrument similar to traditional money, and the second bitcoin halving occurred on July 9.

In August, one of the largest crypto exchanges at the time, Bitfinex, was hacked. Fraudsters withdrew 119,754 BTC from the platform. The attackers were first caught only in February 2022.

A new upsurge - 2017

In 2017, a large number of people realized that bitcoin is not the only cryptocurrency, and perhaps not even the most promising one. Altcoins may pose a real competition to this leading cryptocurrency. Bloggers, news outlets, and the media fueled the cryptocurrency hype, but that was just the beginning.

In April this year, a law was passed to legalize crypto payments in Japan, which was the starting point for the price of the asset to skyrocket.
August saw the launch of one of the most famous bitcoin forks, Bitcoin Cash, and these events allowed an impressive period of upward momentum to begin. In December 2017, the bitcoin price reached an all-time high, surpassing $19,000 per unit.

Also in December, bitcoin futures trading started on the Chicago Mercantile Exchange. This was the backdrop for the BTC exchange rate reaching the $20,000 mark at one point.

Cryptozyme - 2018

Subsequently, the Bitcoin boom saw the emergence of many new cryptoassets such as EOS, Tron, and Cardano.

In January, a ban on anonymous cryptocurrency trading was introduced in South Korea, and American investor George Soros called the coin a "bubble". At the same time, China banned mining, which provoked a general panic. As a result, the price of bitcoin and other assets fell by more than 60%.

In general, 2018 was the year of cryptozyme after bitcoin updated the maximum close to $20 thousand in December 2017. Many crypto projects could not withstand the period of falling prices in the crypto market and closed down.

Recovery - 2019

In February 2019, Tesla founder, Ilon Musk, expressed his support for the cryptocurrency community, calling the blockchain technology on which bitcoin is based "brilliant." He noted that in his opinion cryptocurrency is superior to traditional money in the efficiency of transferring value.

After that, the company Meta (formerly Facebook), presented its own crypto asset - Libra. However, its realization never took place. Nevertheless, it was a high-profile infopod.

In general terms, bitcoin began to show signs of recovery in 2019, after a severe drop in price. Key trends during this period included increased interest from institutional investors, the integration of bitcoin as a means of payment by major technology companies, and increased acceptance by regulators around the world.

By the end of 2019, the price of the first cryptocurrency had recovered to around $7,000.

Digital Gold - 2020

The year 2020 was a special year for BTC. At the beginning of the year, the bitcoin price dropped to a low of $3,000, but a little later, the third halving occurred, which takes place every four years and halves the reward for mining new blocks. In addition, the global COVID-19 pandemic triggered a worldwide economic crisis, and many investors turned to bitcoin as "digital gold" - a safe haven in times of uncertainty. This was influenced by the Fed, which stimulated the economy by giving away money that people invested in cryptocurrency.

In August, software provider MicroStrategy began investing in bitcoin, and over time, the company became the largest cryptocurrency investor among publicly traded companies.

By the end of 2020, the price of bitcoin surpassed its previous record, reaching $20,000.

Continuing the upswing is 2021

In 2021, BTC continued its surge, reaching new all-time highs.

In February, it became known that Tesla invested $1.5 billion in bitcoin.
In March, Tesla began accepting bitcoins for its cars, but in May the company stopped accepting cryptocurrency due to the fact that mining is harmful to the environment. Later, Ilon Musk said that his company will start accepting BTS when the harm from mining decreases.

May. China began to put pressure on miners by banning cryptocurrency mining, which led to changes in cryptocurrency mining. Many members of the crypto community moved to the U.S., making America the new largest mining center.

In September, El Salvador became the first country in the world to legalize bitcoin. The cryptocurrency is now the official currency in the country, along with the US dollar.

November 10 - Bitcoin reached a new high of $68,789. The market capitalization of cryptocurrencies exceeded $3 trillion for the first time.

In addition, several bitcoin futures ETFs were launched at that time, making it easier for institutional investors to access BTC.

The year 2021 is also notable for the hype around meta-universes, meme fever and increased interest in NFTs from market participants.

Dark Times - 2022

In 2022, a bear cycle began, during which the price of BTC fell to $16,000, we think many people remember this period very well. It started with the collapse of the crypto project Tegga in May that year, and in July Tesla sold 75% of its bitcoin reserves.

On September 15, Ethereum, the second most capitalized cryptocurrency, switched from the energy-intensive Proof-of-Work algorithm to the more environmentally friendly Proof-of-Stake. In October, Ilon Musk finalized the acquisition of Twitter, which has become a haven for many crypto-enthusiasts.

In November, one of the largest crypto exchanges at the time, FTX, collapsed, a case that promises $30 billion in losses to investors. In addition, 2022 was marked by mass layoffs in the crypto industry.

A little bit more - 2023

February proved to be a difficult one for bitcoin, as the SEC increased its impact on the crypto industry. The number of cryptocurrencies recognized by the SEC as illegally issued securities surpassed 60. In addition, the Commission filed lawsuits against two major crypto exchanges, Binance and Coinbase, over suspicions of fraud and artificial influence on the market.

The situation stabilized after Ripple achieved a partial victory over the SEC. The court recognized that private sales of XRP cryptocurrency do not violate U.S. securities laws.

By mid-2023, the bear cycle was slowly coming to an end as another halving loomed on the horizon and large investment funds began to actively enter the crypto market. At the same time, stricter regulatory measures were being introduced in various countries, which contributed to the development of the cryptocurrency ecosystem and increased transparency.

At the same time, Binance came to a compromise with several US regulators. One of the terms of the agreement was the change of the exchange's CEO. The post of the head of the exchange was taken by Richard Teng, who previously held a high position within the company.

Our days - 2024

The beginning of this year was favorable for the entire crypto community, because the SEC approved the spot bitcoin-ETF in the United States. On January 11, the first day of trading in the instrument took place. Interest in the spot version of the bitcoin-ETF significantly surpassed the performance of the futures traded BTC exchange traded funds.

On March 14, 2024, the Bitcoin price rose to new heights and surpassed previous highs, reaching $73,800.

What's next for us? Cryptology team opinion

After so many years and prophecies of cryptocurrency collapse, it has become clear that Bitcoin is not going anywhere. Blockchain technology is embedded in our lives and will continue to do so whether we want it to or not. Many crypto-enthusiasts are using BTC to pay for goods and services, more and more companies are accepting cryptocurrency as a means of payment, cryptocurrency cards are being issued (such as Ukrainian startup Trustee Plus), taxation is being introduced in many countries, the US and the SEC in particular are looking for ways to regulate the crypto asset market - and this cannot be considered a negative, as cryptocurrency is becoming more legal in this way.

BTC technology is no longer as new as it was in 2008, many new - more interesting and potential projects are being created that solve the problems that the BTC blockchain could not solve. Of course, at some point BTC mining will cease and, with the same demand for the cryptocurrency and decreasing supply, the price will be appropriate.

However, it is unlikely that BTC will be able to make another 100 X's at this point because then at some point its capitalization will surpass that of the entire stock market. However, Bitcoin will always be the main mastodon of the market, the one to which attention will be drawn first.

The history of BTC creation and development is a story of innovation, overcoming difficulties and striving for advanced technological solutions.
Let's go back to the 20th century - the time of creation of the Internet, which changed people's lives forever. Today, the Internet is not a novelty and the technology companies that influenced the creation and development of Internet technology, which grew exponentially 30 years ago, will not be able to show such growth today. And this is comparable to the blockchain technology that it was BTC that brought into our lives.