In late 2008 and at the height of what is regarded as one of the worst financial crises in the history of the world, a person or group of people going by the name Satoshi Nakamoto registered a domain named bitcoin.org. This was followed by the publication of a white paper titled ‘Bitcoin: A Peer-To-Peer Electronic Cash System’. It aimed to explain how this new currency would work as well as how it would change how the financial industry operates.
In 2009, Nakamoto mined what remains to be the first-ever Bitcoin, at the time being referred to as the ‘genesis block’. Soon after, Nakamoto sent a bitcoin to a cryptography expert and enthusiast by the name Hal Finney. This first successful Bitcoin transaction helped to kick start a colossal crypto wave that has swept across every corner of the financial world in the last decade. For more information on Bitcoin and other cryptos, don’t forget to check Crypto Head.
The first-ever real Bitcoin purchase
In May 2010, Laszlo Hanyecz, a Florida-based computer programmer purchased a couple of pizzas for 10,000 BTC which an unnamed Briton paid for using his credit card while Hanyecz transferred the Bitcoins to him. This proved to be the first real Bitcoin purchase and has since been celebrated in the crypto community every year on May 22 as the Bitcoin Pizza Day.
Bitcoin and the dark web
In 2011, a dark-web marketplace by the name Silk Road was launched by a mystery person known as Dread Pirate Roberts. Inside, users could purchase anything without fearing arrests or detection, although that meant they had to stay anonymous. To achieve this, they would use Tor routers to access the web without being tracked while their preferred mode of payment was Bitcoin. It is during this period that the popularity of this digital currency started to snowball. By the time of Roberts’ arrest (whose real name was later confirmed to be Ross Ulbricht) and subsequent closure of the Silk Road in late 2013, more than a million transactions worth nearly 10 million Bitcoins had been completed on the site.
Silicon Valley and venture capitalists start to show interest
By mid-2013, the value of all Bitcoins in circulation had surpassed $1 billion, a figure even the biggest skeptics of this new currency would hardly snub. It is around this time that popular figures in the traditional finance industry started showing interest in Bitcoin and cryptos in general. Perhaps the most notable of the early Bitcoin investors were the Winklevoss twins – Cameron and Tyler Winklevoss. To date, they still hold among the biggest amounts of Bitcoins in the world. They have also gone on to launch a virtual currency exchange platform known as Gemini where they are the majority shareholders.
The Mt. Gox Disaster
The history of Bitcoin cannot be complete without the mention of the Mt. Gox exchange platform that at one time was the biggest in the industry but then went under as quickly as it rose to stardom. Initially set up in 2006 as a gaming site, Mt. Gox only gained popularity in 2010 when its founder Jeb McCaleb decided to convert it into a crypto exchange. A year later, he sold it to Mark Karpeles and that marked the start of a tumultuous period that culminated in its shutdown in 2014. In those three short years, Mt. Gox lost millions of dollars and BTCs to security breaches and poor management. Indeed, it is blamed for halting the rapid growth that Bitcoin was enjoying at the time.
The emergence of new altcoins
The growth of Bitcoin was undoubtedly going to attract the attention of other like-minded developers, and it was only a matter of time before new cryptos hit the market. Around 2013, new coins including Ethereum and Monero entered the market in a move that indicated the increasing maturity of the crypto space. Today, there are over 2000 crypto forms, although only a small portion of them have managed to enjoy noteworthy success.
What is the future of Bitcoin and other cryptos?
2017 was the best year for cryptocurrencies and in particular Bitcoin which recorded its all-time peak price of nearly $20,000. Unfortunately, the success was short-lived as it crashed only about a year later, but it’s slowly picking up the pieces. In the same vein, smaller coins like Ethereum and Ripple are showing signs of growing further, and this indicates a bright future for the industry. But what is more important is the fact that more and more investors, major companies, and even regulators are slowly but assuredly accepting that the future of the financial sector lies in the hands of digital currency.