Source Link: https://analyzingalpha.com/bitcoin-history

Bitcoin was created in 2009 by the pseudonymous developer Satoshi Nakamoto. Bitcoin is just over a decade old, but there is no doubt that it is one of the most profitable and successful cryptocurrencies in the world of finance. It gained millions of followers, and in the last quarter of 2021, it reached a value of $66,999.00 at Coinbase.

Here’s a quick summary of the history of Bitcoin:

August 2008: The Birth of Bitcoin

The name ‘Bit’-coin is named after the binary digit, the basic computation unit. The domain name “bitcoin.org” was registered on August 18, 2008. Then, the developer, Satoshi Nakamoto, posted the link to the whitepaper titled “Bitcoin: A Peer-to-Peer Electronic Cash System on a cryptography mailing list” on October 31, 2008.

The whitepaper mentioned that Bitcoin is a digital currency that would enable secure, peer-to-peer transactions. And there will be no intermediary involvement, such as the government, central bank, or financial institutions. It was also mentioned that the transactions would be traced through a blockchain.

January 2009: The Beginning

Nakamoto implemented the bitcoin software and released it in January 2009.

Nakamoto mined the genesis block of bitcoin, the first block of cryptocurrency ever mined, and received 50 bitcoins. The block genesis became the prototype for all other blocks in its blockchain.

January 2009: The First Test Transaction

Computer scientist, Hal Finney, downloaded the bitcoin software on January 12, 2009. After downloading, he received ten bitcoins from Nakamoto, which was the first transaction in the test. This test transaction confirmed that bitcoin could function as a money network.

Later, in the same year, Hal Finney predicted that if Bitcoin became a dominant payment system globally, its price would skyrocket due to the innate emission limit of 21 million coins.

October 2009: The New Liberty Standard

October 5, 2009, is when the New Liberty Standard was set up. It is when the real value of bitcoin was created. It established a value ratio of 1.309,03 BTC for $1 per the energy cost of mining Bitcoin.

Martti Malmi, a Finnish software developer, sent 5,050 bitcoins for $5.02 to New Liberty Standard using PayPal.

February 2010: The First Bitcoin Exchange

During this time, a Bitcointalk user named dwdollar created a Bitcoin market portal. Bitcoin transactions could be conducted in this portal using payment systems like Paypal.

May 2010: The Bitcoin Pizza Day

On May 22, 2010, Laszlo Hanyecz, a resident in Florida and a programmer, purchased two Papa John’s pizzas for 10,000 Bitcoins, worth around $47. Now, the valuation of the pizzas would be a whopping $365 million.

2010: Nakamoto Hands Bitcoin Network to Gavin Andersen

In 2010, Andersen approached Nakamoto. He believed in Nakamoto and became a dependable resource for him. It was believed that before handing bitcoin to Andersen, Nakamoto mined one million Bitcoins.

February 2011: Silk Road Chapter

The infamous Silk Road was a digital black market platform founded in February 2011 by Ross William Ulbricht, which works under the pseudonym “Dread Pirate Roberts.” The platform deals with trading narcotics and other illegal substances. It existed for 30 months and accepted bitcoin as an exclusive mode of payment. In 2013, Silk Road was shut down, and Ross Ulbricht was sentenced to life imprisonment.

February 2011: Dollar Parity Day

It was when noted developers like Jeff Garzik and Jed McCaleb joined the bitcoin core team, and this news pushed the price of a Bitcoin to one dollar. February 10, 2011, is remembered as Slashdot day or Dollar Parity Day.

September 2012: Bitcoin Foundation

In September 2012, Bitcoin Foundation was formed along with the Linux Foundation. The foundation was funded through grants from for-profit companies that depend on Bitcoin technology. Gavin Andersen was also hired as the Chief Scientist of the foundation.

November 2012: First Bitcoin Halving

On November 28, 2012, the first halving event happened. It was after 10,500,000 BTC had been mined. Block 210000 was completed, and the block reward became 25 BTC from the original 50 BTC.

2012: Introduction of MilliBitcoins, Microbitcoin, and Satoshis

This year, three new measurement systems called milliBitcoins (mBTC), microBitcoins (uBTC), and Satoshis were introduced.

March 2013: Blockchain Fork

The blockchain split into two independent chains with different rules in March 2012. It is because of a bug in the bitcoin software’s version 0.8.

2013: Bitcoin Price Bubble

2013 is another significant year in the Bitcoin world. The market witnessed an unprecedented price rise. Bitcoin began trading at $13.40 and went through two price bubbles in the same year. And by April 2013, the price shot up by $220.

December 2013: China Imposes Bitcoin Restrictions

The People’s Bank of China prohibited Chinese financial institutions from using bitcoins as a currency on December 5, 2013.

January 2014: The Mt. Gox Disaster

In January 2014, Mt.Gox, one of the largest Bitcoin exchanges in the world, suddenly shut down. The 850,000 Bitcoins worth $460 million also vanished. It closed its website and exchange service and filed for bankruptcy protection from creditors.

June 2016: SegWit

Bitcoin released its version 0.13.1 update on June 2016. It is the first to implement Segregated Witness transactions (SegWit) in the protocol. The term “SegWit” means separating, segregating, and witnessing the transaction signatures.

April 2017: Bitcoin Became Legal In Japan

Japan passed a law recognizing bitcoin as a legal tender, with retailers backing the new law in April 2017. There was an increase in capitalization from $18.34 billion to $19.5 billion.

August 2017: Bitcoin Cash

Bitcoin Cash was formed in August 2017. It was because of the hard fork in Bitcoin. Each Bitcoin holder received an equivalent amount of Bitcoin Cash. Bitcoin Cash made its debut on various cryptocurrency exchanges at $900.

September 2017: China Bans Crypto ICOs

After China banned initial coin offerings on September 4, 2017, bitcoin crashed to $3,226. The complete ban started on 1 February 2018.

December 2017: CBOE Launches Bitcoin Futures

Chicago exchange operators Cboe Global Markets Inc and CME Group launched bitcoin futures trading in December 2017. It is to facilitate mainstream investors to bet on the price of the virtual currency.

December 2017: Another Bitcoin Price Bubble

On December 17, 2017, happened the third bitcoin price bubble. Bitcoin was $975.70, but the price skyrocketed to $20,089 on December 17, 2017. Bitcoin held onto the higher price zone and didn’t breach $1,000.

August 2020: Bitcoin Acceptance By Corporates

In August 2020, bitcoin was widely accepted by corporates, including Paypal, Square, and MicroStrategy. 

MicroStrategy invested $250 million in bitcoin as a treasury reserve asset. Also, Square, Inc. placed nearly 1% of its total assets ($50 million) in Bitcoin. Lastly, PayPal announced a new service that allows its customers to hold and trade cryptocurrency from the platform.

September 2020: Zug Allows Bitcoin For Tax Payments

Switzerland announced on September 2020 that citizens and institutions in the Canton of Zug could start making tax payments up to 100,000 CHF in Bitcoin and Ethereum by February 2021. Because of this, Zug is now known as the “Crypto Valley.”

February 2021: Tesla Purchased $1.5 Billion Bitcoin

On February 8, 2021, Elon Musk endorsed bitcoin by purchasing $1.5 billion in bitcoins. The amount represents about 8% of all the $19.4 billion that Tesla has in cash and liquid assets.

April 2021: Bitcoin Reached $64,000

Bitcoin moved past $64,000 on April 14, 2021. It is backed by institutional buying and the euphoria surrounding the direct listing of Coinbase on NASDAQ.

June 2021: China Bans Bitcoin Mining

On June 2021, China imposed stringent crypto regulations urging financial institutions and banks to scrutinize and deactivate individuals’ performances in crypto transactions. The crackdown happened because China considered it a threat to the country’s economic stability.

June 2021: El Salvador Legalizes Bitcoin

El Salvador passed legislation in June 2021 to make Bitcoin a legal tender alongside the US Dollar. It came into effect in September 2021.

This law allows users to make payments for services, trade products, and make bank transfers with a commission waiver. However, if the vendor wishes to receive compensation via the US Dollar, the customer can make conversions directly on the app.

September 2021: Crypto Trading In China Is Illegal

In 2019, China banned crypto trading. However, it was in 2021 when China deemed crypto trading illegal. It has warned that those involved in “illegal financial activities” are criminals and will be prosecuted.

October 2021: The First US Bitcoin ETF Debuts

October 19, 2021, marked another important date in the history of bitcoin. For the first time, the Proshares Bitcoin Strategy ETF started trading on the US stock exchange. It has the ticker name BITO. This is the first in the US but not globally. Canada has three bitcoin ETFs already.

Final Words

Bitcoin has been around for over a decade, and bitcoin investors believed it would continue to go strong in the following years. Though controversies marked the first decade, the success is still undeniable. After 2017, the price of bitcoin stabilized above $1000. 

Cryptocurrency enthusiasts and investors are pretty optimistic about bitcoin. It is also expected that the next bitcoin halving will occur in 2024.

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