Moctar BouraimaBitcoin, the world's first cryptocurrency, was created in 2009 by a mysterious individual or group of individuals known as Satoshi Nakamoto. Since then, it has seen rapid growth and increasing adoption, shaking up the global financial landscape.
In this article, we will look at the historical development of Bitcoin. We will discuss its origins, as well as the different stages that it went through during its existence.
2008: Publication of the Bitcoin white paper
The origins of Bitcoin date back to the global financial crisis of 2008. This crisis exposed the weaknesses of traditional financial systems, which are centralized and vulnerable to manipulation.
In this context, Nakamoto proposed a new type of currency that would be decentralized, secure and transparent. This currency would be based on blockchain technology, a distributed ledger that records all transactions.
So, October 31, 2008 (Halloween night) , Nakamoto published a white paper titled “Bitcoin: A Peer-to-Peer Electronic Payment System.” It is a white paper that describes how Bitcoin works and its technical and financial advantages.
2009: The first Bitcoin block: The Genesis Block
On January 3, 2009, Satoshi Nakamoto created the first block of Bitcoin which is the Genesis block. This event marks the birth of the Bitcoin network and the start of a financial revolution.
Indeed, the Genesis block is a special block that contains the basic information of the Bitcoin network. We find the creation date, the mining difficulty and the following message:
The Times 03/Jan/2009 Chancellor on brink of second bailout for banks
This message is a reference to the article in the British newspaper The Times of January 3, 2009. The latter reported the financial difficulties experienced by the traditional banking system. It is interpreted as a criticism of this system and as a declaration of intention by Satoshi Nakamoto to create an alternative, decentralized and transparent currency.
For this block, Satoshi Nakamoto received 50 bitcoins and since then these bitcoins have never been withdrawn or sent to another address.
2010: First transaction with Bitcoin Pizza Day
On May 22, 2010, a major event marked the history of Bitcoin: the first real transaction with bitcoins. That day, Laszlo Hanyecz bought two pizzas for 10 bitcoins, or about $25 at the time.
This transaction also represents the symbol of Bitcoin's evolution into a valuable digital asset. She also contributed to the popularization of cryptocurrency and its adoption by the general public.
2010: Launch of the MtGox platform
The creation of the Mt. Gox stock exchange in 2010. Mt. Gox is one of the events that mark the history of Bitcoin. It was the first major Bitcoin exchange that offered users a platform to buy, sell and trade the crypto.
At first, Mt. Gox was a small exchange, but it quickly grew to become a dominant force in the industry. By 2011, the company was already processing a large portion of the world's Bitcoin transactions. This growth helped increase the adoption of Bitcoin, as more and more people were then able to obtain it more easily.
February 2011: Bitcoin price hits one dollar
As Bitcoin's popularity grew, its price did not remain static. In February 2011, the price of Bitcoin reached parity with the US dollar for the first time. This price rise was a sign of Bitcoin's growing recognition as a digital asset. It also drew attention to the potential of cryptocurrency and generated increased interest from investors.
November 2012: The first halving of bitcoin: a historic turning point
On November 28, 2012, the first Bitcoin halving took place, reducing the block reward from 50 to 25 BTC. This major event called “halving” marked a turning point in the history of Bitcoin, both technically and economically.
Today, it is an event still eagerly awaited by the community, hoping that the price of bitcoin will increase in value, because its supply is decreasing.
A reduction in supply
Technically, halving is a unique issuance mechanism that limits the number of bitcoins that will be created. THE Bitcoin has a peak supply of 21 million units, and halvings reduce the speed at which these coins are issued.
Therefore, the first halving reduced the bitcoin reward for miners. This decrease in supply helped increase the scarcity of Bitcoin, which had a positive impact on its price.
A first bitcoin bull run
Indeed, the price of Bitcoin experienced a sharp increase in the months following the first halving. The latter led to an increase in demand as investors sought to acquire a rarer asset. Bitcoin took advantage of this, reaching $1 for the first time in March 000. This period is then described as being the first real bull run for bitcoin.
October 2013: The collapse of the Silk Road website
The Silk Road platform was an underground online marketplace that operated on the dark web. He facilitated the trade in a variety of illegal products and services, including drugs, weapons and false documents. The market used Bitcoin as its primary payment method, which allowed it to operate with impunity for several years.
In October 2013, the FBI closed Silk Road and arrested its founder, Ross Ulbricht. The market shutdown was a blow to the cryptocurrency community, which has been accused of facilitating crime.
As a result, this case has raised questions about the potential for criminal use of cryptocurrency. Regulators around the world have begun to examine the issue and consider measures to combat the use of cryptoassets for illicit purposes.
2014: The disappearance of Mt. Gox: a hard blow for the image of Bitcoin
As of February 2014, Mt. Gox was still one of the largest Bitcoin exchanges in the world. However, it announced its closure that same year, filing for bankruptcy protection. Indeed, the cause of this shutdown was a major hack in which Mt. Gox lost around 850 BTC. This already represented several hundred million dollars at the time.
In reality, this event was a blow to the image and confidence in the companies working around Bitcoin. The price of Bitcoin fell by more than 50% in a matter of days, and confidence in the digital currency was shaken.
Moreover, disappearance of Mt. Gox revealed several vulnerabilities in the cryptocurrency ecosystem. First, it showed that centralized exchanges were vulnerable to hacks. Second, she emphasized the importance of secure storage of cryptocurrencies. Finally, it demonstrated the need for robust security measures to protect users.
Overstock.com, the first major retailer to accept Bitcoin
In 2014, Overstock.com (now no more) a popular e-commerce retailer, became the first major retailer to accept Bitcoin as a payment option. This decision had a significant impact on the adoption of cryptocurrency by the general public.
Previously, Bitcoin was primarily used by a small community of tech-savvy users. Overstock.com's acceptance of Bitcoin has allowed a wider audience to experience this new form of currency.
Overstock.com's move also helped bridge the gap between traditional trading and the world of cryptocurrency. By accepting Bitcoin, Overstock.com has shown that it is ready to embrace new technologies.
2016: The second Bitcoin halving: another important milestone in Bitcoin history
On July 9, 2016, Bitcoin suffered its second halving event. The latter reduced the block reward from 25 BTC to 12,5 BTC. The event, which occurs every 210 blocks, or approximately every four years, is a fundamental feature of the Bitcoin protocol.
In fact, the halving aims to limit Bitcoin inflation by reducing the amount of new coins created each year. This is important to maintain the value of cryptocurrency and ensure that it remains a rare and valuable asset.
The price of Bitcoin reached a high of $2 in late July 550. It saw an increase of over 2017% from the pre-halving price. Furthermore, if such an increase was recorded, it was due to a number of factors. These are the increased awareness of Bitcoin, growing adoption by financial institutions, and growing interest from institutional investors.
2017: General public recognition and institutional interest in Bitcoin
In December 2017, Bitcoin experienced unprecedented mainstream recognition. Its price reached an all-time high of over $19. If this performance was possible, it is because of the growing adoption of Bitcoin by businesses and individuals.
Indeed, institutional interest in Bitcoin was driven by the introduction of Bitcoin futures by major financial institutions. These contracts allow institutional investors to speculate on the future price of Bitcoin without having to directly own the underlying asset.
2018: Ban on the purchase of Bitcoin by major banks
In February 2018, several major US banks banned the purchase of Bitcoin using their credit cards. The move was seen as a response to the volatility and perceived risks associated with digital currencies.
In fact, the mother of cryptos has experienced significant volatility over the past few years. Its price reached a peak of $20 in December 000, before falling to less than $2017 in February 7. This volatility has led banks to worry about their customers, who could suffer heavy losses in the event of drop in price.
Additionally, banks have also expressed concerns about the risks associated with cryptocurrencies. This is particularly the case for the risks of fraud and scams. Indeed, the cryptocurrency market is still relatively new and poorly regulated, making it more vulnerable to abuse.
Therefore, the ban on Bitcoin purchases by credit card was intended to protect customers against these risks. It was also intended to discourage individuals from speculating on cryptocurrencies, which could lead to increased volatility.
The third Halving of Bitcoin
On May 11, 2020, the third Bitcoin halving event took place, reducing the block reward from 12,5 BTC to 6,25 BTC. This event, which takes place every four years, is a mechanism integrated into the Bitcoin protocol designed to control the inflation of the cryptocurrency.
Another important milestone for Bitcoin
The third halving was a significant milestone for Bitcoin, highlighting the deflationary nature and scarcity of crypto. It has also garnered attention from the crypto community and investors around the world.
2020: Increased integration of Bitcoin as a means of payment
In October 2020, PayPal announced support for Bitcoin. The platform now allowed users to buy, sell and hold cryptocurrencies directly in their PayPal accounts. The move was welcomed by cryptocurrency advocates, who see it as significant validation of the technology.
PayPal's integration of Bitcoin has opened access to this cryptocurrency to millions of additional users. PayPal has over 400 million active users worldwide, which is a huge market.
Strengthened legitimacy
PayPal's move is also a sign that Bitcoin is increasingly seen as a legitimate form of payment. PayPal is a well-established payments company and its support for Bitcoin is a strong signal to investors and businesses.
2021: Tesla invests $1,5 billion in Bitcoin
In February 2021, Tesla, the global leader in electric vehicles, announces a $1,5 billion investment in Bitcoin. The company also announced that it would accept cryptocurrency as payment for its vehicles.
This decision had a significant impact on the cryptocurrency market. The price of Bitcoin increased by more than 20% in the hours following the announcement.
Tesla's investment and acceptance of Bitcoin has been praised by the community. This paved the way for other businesses to now accept Bitcoin as payment
The Bitcoin ETF: a new avenue for mainstream investment
On February 11, 2021, the Ontario Securities Commission (OSC) approved the first physically settled Bitcoin-backed exchange-traded fund (ETF) in Canada. The fund, called Purpose Bitcoin ETF, began trading on the Toronto Stock Exchange on February 18, 2021.
The approval of this ETF is an important step for the recognition of cryptocurrencies as a legitimate asset class. It offers Canadian investors a regulated way to invest in Bitcoin. This, without the need to create a digital wallet or trade on a cryptocurrency exchange.
—> Read: What you need to know about Bitcoin ETFs
Coinbase goes public
On April 14, 2021, Coinbase, one of the world's largest cryptocurrency exchanges, debuted on the Nasdaq exchange. This initial public offering (IPO) was an important moment for the cryptocurrency sector. Indeed, it was the first time that a major crypto exchange had gone public.
Coinbase's IPO was a resounding success, with the company's shares soaring 52% in their first day of trading. This performance gave Coinbase a valuation of $92 billion, making it one of the largest publicly traded companies in the United States.
Furthermore, Coinbase's IPO is a sign that the cryptocurrency sector is growing and consolidating. It is also a signal that institutional investors are increasingly interested in cryptocurrencies.
2023: SEC Lawsuit Against Binance
On June 5, 2023, the United States Securities and Exchange Commission (SEC) filed a lawsuit against Binance. It was also suing its CEO and founder, Changpeng Zhao, as well as the operator of Binance.US. The 136-page complaint alleges that Binance violated the law by operating as an unregistered securities exchange.
In fact, the SEC claims that Binance offered and sold unregistered securities. This is the case for Binance Coin (BNB) tokens, for American investors. The SEC also alleges that Binance operated illegally in the United States by failing to register with the SEC as a securities exchange.
For its part, Binance rejected the allegations of SEC. The exchange says it is not a securities exchange and has no plans to register with the SEC.
—>Read “Understanding Binance’s setbacks"
Conclusion
Bitcoin has had an impressive historical journey since its creation in 2009. From its mysterious creation to the publication of its white paper to its growing adoption, Bitcoin has disrupted traditional finance.
The most interesting thing is that this technology has not yet finished maturing. It’s obvious that she still has some nice surprises in store for us…
