The History of Bitcoin: The First Cryptocurrency

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Bitcoin Timeline Overview

1998–2009 The pre-Bitcoin years

Bitcoin Timeline History

Bitcoin was created in 2009 as the first decentralized currency to run on Blockchain technology. It was created out of the turmoil of the 2008 Great Recession as people started to lose their trust in monetary institutions and the financial system which is controlled by the government.

1998–2009 The pre-Bitcoin years

Although Bitcoin was the first established cryptocurrency, there had been previous attempts at creating online currencies with ledgers secured by encryption. Two examples of these were B-Money and Bit Gold, which were formulated but never fully developed.

2008 — The Mystery of Satoshi Nakamoto

A paper called Bitcoin — A Peer to Peer Electronic Cash System was posted to a mailing list discussion on cryptography. It was posted by someone calling themselves Satoshi Nakamoto, whose real identity remains a mystery to this day.

2009 — Bitcoin begins

On Jan. 3, 2009, the blockchain was launched when the first block, called the genesis block, was mined. The first test transaction took place about one week later. The Bitcoin software was then made available to the public for the first time and mining — the process through which new Bitcoins are created and transactions are recorded and verified on the blockchain — begins.

2010 — Bitcoin now has a value

As it had never been traded, only mined, it was impossible to assign a monetary value to the units of the emerging cryptocurrency. In 2010, someone decided to sell theirs for the first time — swapping 10,000 of them for two pizzas. If the buyer had hung onto those Bitcoins, at today’s prices they would be worth more than $100 million.

2011 — Other cryptocurrencies start to emerge

As Bitcoin increased in popularity and the idea of decentralization and encrypted currencies caught on, the first alternative cryptocurrencies appeared. These are sometimes known as altcoin and generally try to improve on the original Bitcoin design by offering greater speed, anonymity or some other advantage. Among the first to emerge were Namecoin and Litecoin. Currently there are thousands of cryptocurrencies in circulation with new ones frequently appearing.

2013 — Bitcoin’s price crashed

Shortly after the price of one Bitcoin reaches $1,000 for the first time, the price quickly begins to decline. Many who invested money at this point will have suffered losses as the price plummeted to around $300 — it would be more than two years before it reached $1,000 again.

2014 — Scams and theft

Perhaps unsurprisingly for a currency designed with anonymity and lack of control in mind, Bitcoin has proven to be an attractive and lucrative target for criminals. In January 2014, the world’s largest Bitcoin exchange Mt.Gox went offline, and the owners of 850,000 Bitcoins never saw them again. Investigations are still trying to get to the bottom of exactly what happened but whatever the story, someone dishonestly got their hands on a haul which at the time was valued at $450 million dollars. At today’s prices, those missing coins would be worth $4.4 billion.

2016 — Ethereum and ICOs

One cryptocurrency that came close to stealing Bitcoin’s throne this year is the Ethereum platform. This platform uses the cryptocurrency Ether to facilitate blockchain-based smart contracts and apps. Ethereum’s arrival was marked by the emergence of Initial Coin Offerings (ICOs). These are fundraising platforms which offer investors the chance to trade what are often essentially stocks or shares in startup ventures, in the same manner that they can invest and trade cryptocurrencies. In the US, the SEC warned investors that due to the lack of oversight, ICOs could easily be scams or ponzi schemes disguised as legitimate investments. The Chinese government went one further by banning them outright.

2017 — Bitcoin reaches $10,000 and continues to grow

The increase of cities and countries where Bitcoin could be spent contributed to its continued growth and popularity, during a period where its value remained below previous peaks. Gradually as more and more uses emerged, it became clear that more money was flowing into the Bitcoin and cryptocoin ecosystem. During this period the market cap of all cryptocoins rose from $11bn to its current height of over $300bn. Banks including Barclays, Citi Bank, Deutsche Bankand BNP Paribas have said they are investigating ways they might be able to work with Bitcoin. Meanwhile the technology behind Bitcoin — blockchain — has sparked a revolution in the fintech industry (and beyond) which is only just getting started.

Bitcoin Today

As of March 2022, one (1) Bitcoin is worth about $37,000. It’s a long way from its all-time high but also a long way from its post-peak bottom in 2018 of just over $3,000.

Future of Bitcoin

No one is certain about what is in store for Bitcoin’s future. Whatever your opinion on Bitcoin and cryptocurrency — and educated commenters have described them as everything from the future of money to an outright scam — it seems they are here to stay. Will it replace government-controlled, centralized financial institutions? We are unlikely to know the answer for some time yet.

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