Satoshi Nakamoto, the unknown Bitcoin maker, released the first customer network 12 years ago on this day, officially kicking off what may be the greatest monetary revolution of the 21st century.
Six days earlier, on January 3, 2009, Satoshi mined the Genesis block known as # 0 and coded it into the software. Unlike the following blocks in the chain, the coin-based reward from the Genesis block cannot be spent, as only publicly won “coins” can be transferred. So the first block, or # 1, was mined January 9, thus making a real start for the network as it is now known.
At the time Satoshi announced the news to the cryptography mailing list with a download link to Bitcoin 0.1.0 on the open-source software database platform Sourceforge.
Bitcoin was 0.1.0 only compatible with Windows operating system. The first client version with Linux support didn’t arrive until December 2009 with the release of Bitcoin 0.2.0.
Less than a week before the first client software came out, Satoshi mined the Genesis block and started the network. Hal Finney received the very first BTC transaction on January 12, 2009.
At the time, early adopters were already familiar with the possibility of creating monetary value from computing power. According to to Finney: “The ability to generate coins today with a few cents of computation time could be a good bet.”
The programmer and enthusiast of cryptographers famously predicted that Bitcoin could reach world reserve currency status and reach $ 10 million per coin. Satoshi agreed with Finney’s optimistic expectations, adding, “It may make sense to buy some just in case it catches on.”
However, it took until October 2009 for Bitcoin (BTC) would receive its first official recognition. At the time, the New Liberty Standard, an early BTC exchange, was created a benchmark price for Bitcoin set at 1,309 BTC to $ 1.
Pizza, WikiLeaks and Satoshi’s exit
Early miners got on par with Bitcoin as the network is still in its infancy. Some are even making Bitcoin faucets that help promote wider BTC penetration.
In May 2010, Laszlo Hanyecz cemented his place in Bitcoin folklore forever, Pay 10,000 BTC for pizza in what is widely regarded as the first “real” Bitcoin transaction.
Cut off from funding sources, WikiLeaks turned to Bitcoin and some early adopters encouraged Julian Assange consider BTC adoption. Satoshi admonished Oppose the course of action, arguing that an association with WikiLeaks could bring unnecessary heat to the fledgling project.
Indeed, Satoshi’s plea for Assange was one of the Bitcoin maker’s last bits of digital correspondence before he left the scene entirely.
Silk Road and Mining Expansion
In 2011, Bitcoin seemed to be evolving from a strictly cypherpunk affair into the realm of anarchists and free-market advocates. Silk Road, the defunct darknet marketplace, appeared with BTC as one popular payment method for illegal drug trafficking and other prohibited substances.
On the market side, Bitcoin is claiming the $ 1 price milestone as attention begins to spread to the wider tech community. In mid-2011, Bitcoin was at $ 30, but a BTC of 25,000 theft of a user’s slushpool account caused a major price crash.
Bitcoin mining also evolved, with personal computers no longer able to provide enough hash power to secure the expanded network. Graphics processing units and field programmable gate arrays now offer more efficient Bitcoin mining capabilities.
Mt. Gox, Tech Adoption, and Crypto Natives
In 2010, Stellar founder Jed McCaleb founded the Mt. Gox Bitcoin exchange. Fast forward to 2013, and the platform handled more than 70% of the global BTC trading. Mt. Gox seemed too big to fail, but it did fail when hackers have stolen about 850,000 BTC between 2011 and 2014. The news of the thefts caused another major crash in the Bitcoin price.
Meanwhile, technology adoption increased, leading to the emergence of products such as BTC storage devices from Elliptic, for example. US crypto exchange giant Coinbase also came onto the scene, raising $ 25 million in funding.
In terms of regulation, the period between 2013 and 2014 marked the beginning of several governments taking note of Bitcoin. China’s central bank banned banks from facilitating BTC transactions, while the US government seized about 29,000 BTC from Silk Road operators.
In 2015, major altcoins projects such as Ethereum began to emerge, when the founders wanted to create digital currency with features designed to fix perceived flaws in the Bitcoin protocol. Mining also took it one step further with the introduction of application-specific integrated circuits and the rise of industrial Bitcoin mining.
Failure to reach consensus on the block size limit saw one split chain take place in August 2017, leading to the creation of Bitcoin Cash (BCH). However, the real fame came when the price of Bitcoin rose almost twenty times from January 2017 to mid-December. nearly overshadowing $ 20,000.
Macro hedge funds, companies and the rest of the institutional herd
Bitcoin’s rise to the USD 20,000 price level in 2017 was immediately followed by a substantial and protracted crash that hit USD 3,800 in early 2018. last for the rest of the year, with several advocates calling for institutional adoption as the next step in Bitcoin evolution.
Despite Bitcoin being in the grip of a bear market, the fundamentals continued to improve. By mid-2019, the network hash rate was over 70 exahashes per second – more than 10 times the number of grains of sand on the planet. Bitcoin derivatives also boomed, introducing markets such as futures and options contracts, and mainstream companies such as Fidelity announced plans for Bitcoin custody solutions.
By 2020, Bitcoin seemed to have become the darling of institutional investors, with hedge funds and companies pursuing direct exposure to BTC. Some listed companies even have Bitcoin added to their balance, the top-ranked cryptocurrency by market cap as a treasury reserve amid recurring currency policies in major economies.
Bitcoin soared past $ 20,000 in late 2020, but didn’t stop there. Successive reports from major companies buying BTC saw the price go back into parabolic gains despite a drop of 50% in the first quarter of 2020 during the initial sale of assets of COVID-19.
What now for Bitcoin?
It’s only the beginning of 2021, but Bitcoin has already reached more than $ 42,000, twice its magic number in 2017. In the 12 years since Satoshi released the first Bitcoin client, the network and ecosystem itself have evolved from only used in the cypherpunks arena to get the attention of Wall Street.
During that time, gamblers, darknet narcotics vendors, citizens of failed states, tech pros, hedge funds, LLCs, and everyday investors have flocked to the most popular cryptocurrency in the world. Perhaps government adoption is next on the agenda and Bitcoin could become a reserve currency for a major global power. Would Satoshi be happy with such a result?