Bitcoin has been in existence for less than 15 years but in that short time, it has made major waves in the financial industry. This new, innovative form of digital currency has taken the world by storm and become one of the most talked-about inventions of the century.
To go from creation to possibly changing the way the world monetary system works is not only impressive but also fascinating. In just over 10 years, the lifespan of bitcoin has already been a wild ride with many ups and downs along the way. Here are seven key moments in Bitcoin history that have brought us to where the cryptocurrency is now.
- The Creation
As noted by Cove Markets, Bitcoin first entered the scene in 2008. The domain name bitcoin.org was registered in August of that year and in October, a person using the (possible?) pseudonym Satoshi Nakamoto published a paper entitled, Bitcoin: A Peer-to-Peer Electronic Cash System.
At the beginning of 2009, Nakamoto mined the first-ever block in the blockchain that would become bitcoin. In the code of the block, he embedded the date and a special message that read, “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks”. This was a reference to that day’s headline in the British newspaper, The Times, and is also believed to be a shot at the traditional fiat currency institutions against which Bitcoin was made to compete.
- Sending the First Bitcoin
After the first Bitcoin was mined in January 2009, Nakamoto shared this creation with the world by creating the first bitcoin transaction to software developer Hal Finney a few days later. Finney was the first person (outside of Nakamoto) to download the Bitcoin software on the day it was released which is how he received this inaugural transaction.
Finney is a prominent member of the cypherpunk movement, which explains why he was so early in on Bitcoin. This movement includes people who believe that digital cryptography and other virtual privacy-enhancing measures are the key to improving society. Nakamoto sent the original paper to a cypherpunk mailing list and other well-known cypherpunks such as Wei Dai and Nick Szabo, who were among the earliest adopters of the technology.
- The First Purchase
During the rest of 2009, Bitcoin became more popular within in-the-know circles where tech-savvy users loved its theoretical potential. On May 22, 2010, that theoretical potential took the first step to becoming real. On that day, which is now celebrated by bitcoin fans as “Bitcoin Pizza Day”, a computer programmer in Florida named Laszlo Hanyecz used 10,000 bitcoin (BTC) to get two pizzas from his local Papa John’s.
This first commercial purpose illustrated both the potential for and the problems with bitcoin becoming a serious, usable currency in the future. The fact that Hanyecz found a way to spend Bitcoin on a tangible item such as pizza was a huge leap for bitcoin as a viable currency. However, the fact that he paid 10,000 BTC for the pizzas (now worth somewhere in the neighborhood of $100 million) shows the issues with spending such a volatile commodity.
- The Mt. Gox Incident
The year 2010 also marked the founding of Mt. Gox, a bitcoin exchange based in Tokyo, Japan. The exchange would become THE place to trade bitcoin over the next few years and by 2014, the exchange was handling more than 70% of all global bitcoin trading. In February of 2014, though, Mt. Gox suddenly shut down and filed for bankruptcy. Shortly after, they announced they were missing 100,000 of their own bitcoins and 750,000 of their clients’ coins.
This accounted for about 7% of all the Bitcoin in the world at the time, and was then worth around $470 million. Today that amount of Bitcoin would be worth about $8.5 billion. A few months later, the company did find around 200,000 of the Bitcoins in an old Bitcoin wallet that was no longer in use, but the rest was never recovered. In 2015, an investigation concluded that the Bitcoin had been stolen from Mt Gox’s digital wallet over time, starting in 2011.
- Satoshi Nakamoto “Unmasked”
Since Bitcoin was invented, everyone even slightly involved or interested in the cryptocurrency has wondered and hypothesized who actually is the creator, “Satoshi Nakamoto”. In 2014, Newsweek published an article claiming to have tracked the creator down to the suburbs around Los Angeles. When Newsweek reported confronting the then-64-year-old Dorian Satoshi Nakamoto, he responded by saying, “I am no longer involved in that and I cannot discuss it.” After the article was published, he sent a statement to the magazine that stated categorically, “I did not create, invent or otherwise work on Bitcoin. I unconditionally deny the Newsweek report.”
Prior to and since Nakamoto’s denial, many people have claimed or have been thought to be the actual creators. Cypherpunk’s Finney and Szabo, or a group including both, have been rumored to be behind bitcoin. Other scientists, mathematicians, programmers, and students from around the world have been named in various reports over the years. Even more outlandish figures such as drug-dealer Paul Le Roux and famous entrepreneur Elon Musk have been fingered as Nakamoto. To this day, though, there is no concrete proof who really is Nakamoto.
- The All-time High
Over the years, the price of bitcoin has experienced an incredible amount of fluctuation but the general trajectory has been upward. This upward trend peaked on December 17, 2017, when the price of bitcoin hit an astonishing $19,783. The price of the currency had begun the year at just under $1,000 per coin.
The prices fell to under $7,000 just 2 months later when China banned trading the cryptocurrency. The prices continued to vacillate wildly over the next few years going as low as around $3,000 and as high as around $13,000. Towards the end of 2020, it is trading around $10,000 per coin.
- Price Collapse and Trading Boom
Along with the global coronavirus pandemic in 2020 came a bitcoin flash crash. This caused the cryptocurrency to lose more than half its value in just 2 days and eventually briefly dip under $3,000 from its February 2020 price of around $10,000.
This dip, combined with the work-from-home orders, layoffs, and furloughs brought on by COVID-19, saw a record number of new investors enter the bitcoin market. In March, when the price dropped so significantly, crypto exchanges such as Kracken saw massive numbers of new users sign up. This has helped lead to prices again rising back to the levels we see today.
Conclusion
In just 12 years, Bitcoin has seen more drama and intrigue than most financial products experience in their lifetime. With all that has occurred, we can only imagine what the next decade has in store for this currency of the future. The only thing we know for sure is that there will be more volatility and many more key moments that rival the ones above.
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