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This is the story of the first Bitcoin exchanges

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Today, we're used to going to exchange platforms like Binance . That's where we buy cryptocurrencies. And it's very simple. All you need is a bank card and you can buy what you want in just a few clicks. Buying cryptocurrencies today couldn't be easier.

Initially, when Satoshi Nakamoto published the Bitcoin white paper in 2008, Bitcoin had no value. One Bitcoin was essentially worth 0 euros. Bitcoin gained value when people wanted to own it and therefore paid the "price" for it.

And, in the beginning, there weren't any exchange platforms as such. The very first Bitcoin transaction took place on January 12, 2009. It was the first transaction between Satoshi Nakamoto and Hal Finney. Finney is a computer scientist and crypto activist who was one of the first to take an interest in Bitcoin. Satoshi had sent BTC to Hal to test and validate the transactions. There was no monetary value associated with Bitcoin at that time.

More and more people became interested in Bitcoin during that year. Among the first to show interest were mathematicians, cryptographers, and generally members of the cypherpunk movement.

The first bitcoin transactions

At that time, the first Bitcoin exchange appeared. It was October 5, 2009, and the platform was called " New Liberty Standard ." Some say that this platform was created by Satoshi Nakamoto himself. The price displayed was 1309,03 BTC for $1. At that time, demand for Bitcoin was low. However, the value was established based on the mining costs (electricity) required to extract Bitcoins.

That's where it all started.

A first transaction was recorded on October 12, 2009 where New Liberty Standard purchased a total of 5050 BTC from Sirus (Martti Malmi) for an amount of exactly $5,02.

Bitcoin developer Martti Malmi ( @marttimalmi ) from 2009 to 2011 recalled this transaction in a tweet published on January 15, 2014.

The very first person to pay with Bitcoin was Laszlo Haynek . He bought two pizzas for 10,000 BTC. Without fully realizing it, he gave the green light for future Bitcoin payments.

—>Read the article: “ The 10 people who have shaped the history of Bitcoin since the beginning ”.

Bitcoin payment is officially born

In February 2010, a Bitcointalk user named "dwdollar" created an exchange called Bitcoin Market. As the name suggests, one could buy bitcoins peer-to-peer, as is the case today on Noones , for example. One could also buy bitcoin via PayPal.

Initially, you could mainly buy bitcoin by sending a person the requested amount on Paypal.

However, very quickly, Paypal refused transactions related to Bitcoin. This is completely understandable - in hindsight - because ultimately, Bitcoin is a supreme competitor to Paypal as a payment platform.

That said, in 2011, Paypal no longer accepted transactions directly or indirectly related to bitcoin due to fraud and scams. Many users complained to Paypal in cases where the seller, for example, did not send the bitcoins even after receiving the money on Paypal….

The advent of the first Mt Gox exchange platform

You may be familiar with this name or the scandal associated with Mt Gox ? If not, you will soon understand why Mt Gox has become etched in the memories of early bitcoin users.

On July 18, 2010, the MtGox platform was first mentioned on the Bitcointalk network . Bitcoin prices were displayed there, similar to how they were on stock exchange platforms.

Jed McCaled created the exchange platform. He sold it to a young French computer scientist named Mark Karpeles on March 6, 2011. He moved to Japan and became the most prominent person in the Bitcoin community.

It very quickly became the number 1 exchange platform in terms of trading volume.

However, Mt. Gox suffered unprecedented setbacks following a major hack. The Japanese government ultimately accused Mark Karpeles of falsifying his company's account data. In 2015, he was indicted in Japan for embezzlement . He is suspected of having misappropriated €2,3 million in Bitcoin deposits. Mt. Gox went bankrupt with one of its largest losses, losing 850,000 BTC.

However, it has kept a "bad reputation" with this loss of 850 BTC lost. Let us recall that some of the users have been reimbursed….

The Mark Karpeles affair is frankly very complicated to follow as there have been significant reversals.

Note: Mark Karpeles reportedly opened a rating agency for exchange platforms in 2022. You can find out more by following his announcements on Twitter.

—> Read the article: The incredible fall of Mt Gox and Mark Karpelès

New exchange platforms are emerging

With the success of MtGox, new platforms are emerging. The great innovation of these platforms is that users could buy bitcoins in exchange for dollars directly.

We can cite Britcoin, created on March 27, 2011. Users could exchange bitcoins for pounds sterling (GBP). Quickly, in response to demand from the Brazilian population, the exchange opened to Brazilian Reals (BRL).

We can also cite the BitMarket.eu platform, created on April 5, 2011 where we could for the first time exchange bitcoins for Euros.

At this time, peer-to-peer platforms are those most used. Indeed, the governments of the world are not in favor of legislating on bitcoin at this time, an asset that they do not yet understand and which they distrust.

In 2012, the LocalBitcoin platform was created and to this day, it is a reference platform for buying bitcoin peer-to-peer.

—> Read our article “ The best Peer-to-Peer (P2P) platforms for buying bitcoin ”

The first security and hacking problems…

MtGox was the leader in terms of buying and reselling bitcoin at that time. However, on June 19, 2011, a first attack was carried out on the platform exploiting a security flaw. Thousands of bitcoins were "stolen".

Another platform "Bitomat" which was in 3rd place in terms of volume is attacked and loses 17 BTC. This was just the beginning. Other hacks, always bigger, followed... Other platforms like MyBitcoin are hacked (loss of 000 BTC) or TradeHill which also loses thousands of BTC, in 120.

At this time, Bitcoin gained popularity but it was also where it began to gain a reputation for being an asset subject to security hacks.

There is more talk in the media about hacks and sudden losses on exchange platforms than about the technological advances of Bitcoin.

The current situation of bitcoin exchange platforms

Today, there are thousands of trading platforms. There are thousands of cryptocurrencies as well. The platforms have become more secure and offer ever more diverse services. Today there are more than 13,000 exchange platforms listed.

New platforms are created every day, moreover.

Among the best-known exchange platforms today, here is a small, non-exhaustive list:

2011: Kraken is based in San Francisco. Kraken was the first Bitcoin exchange created in the USA, by Jesse Powell.
In 2012: Coinbase: is also based in San Francisco and was created by Brian Armstrong. Today, it is a publicly traded company which is perhaps the best known of the platforms.
2012: Bitfinex: Company based in Hong Kong, founded by Raphael Nicolle and Giancarlo Devasini. For a long time, Bitfinex was second in Bitcoin trading volume.
2013: Okex : Based in Beijing, China is one of the largest exchange platforms today. Moreover, the platform has opened up to DeFi and is now called Okx.
In 2017: Binance : Created in 2017 by Chanpeng Zhao (known as CZ), Binance was originally based in Shanghai, China. Today, the platform has become number 1. It is the one with the largest volume of Bitcoin today. Likewise, Binance constantly innovates by offering different services such as launchpool etc.

Now you can read about the best exchange platforms for buying cryptocurrencies.

Note: No financial advice is given in this or any other article on zonebitcoin. This is information of which you are the sole judge and master. Be responsible with your investments and only invest as much as you are willing to lose.

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