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History of Bitcoin

The start of the era of Crypto-currencies

Everyone around you recently keeps talking about Bitcoin, the news keeps discussing the rise of bitcoin and you have constant images of surging arrows in charts running? through your mind from all the online articles and youtube videos you have been scrolling past lately. Is this another gold rush, and are you missing out? Well to introduce you to how it all started, first read this history on bitcoin. In 2008, the mysterious Satoshi Nakamoto released a paper named Bitcoin – A Peer to Peer Electronic Cash System to a public cryptography mailing list. This paper identified the need for a decentralized electronic currency that allowed peer-to-peer online payments without an intermediary financial institution. In this paper, Nakamoto illustrated how a digital signature would make this possible, and explained in detail how the entire public-key cryptography process should take place to transfer the currency from a sender to a receiver.

Bitcoin vs. Bitcoins

First let’s differentiate between Bitcoin, the software, and bitcoins; the currency mined and functioning through this blockchain technology. While Bitcoin’s software was officially released in January of 2009, the domain bitcoin.org was registered in August of 2008. The first block on today’s Bitcoin blockchain termed the ‘Genesis Block’, was mined by the founder Satoshi Nakamoto for a reward of 50 bitcoins. In this block there was a short message encrypted, reading “The Times 03/Jan/2009 Chancellor on brink of the second bailout for banks”. This note was the first timestamp for the creation of Bitcoin and is thought to be poking at the instability of banking systems. Satoshi Nakamoto was the name used by the inventor (or inventors) and the identity of the creator(s) are unknown to the public until today. There have been many rumors to the whereabouts and status of Satoshi Nakamoto but nothing has ever been confirmed. The earliest adopters of Bitcoin also received what would be considered at today’s price sizeable amounts of bitcoins. Amongst them was programmer Finney, one of the first to download the Bitcoin software. Also the creator b-money, Wei, as well as Nick Szabo the creator of bitgold. Satoshi Nakamoto is estimated to have mined over a million bitcoins before handing over the control of Bitcoin’s core code to Gavin Andresen, who is today the lead developer at Bitcoin, who was the actual person to decentralize the digital currency to ensure it continued even in his absence. Bitgold and b-money were similar digital currency ideas based on open ledgers, but while their models were formulated, they never saw the light of day.

Bitcoin’s first valuation

Fast forward to 2010, the first ever trade of bitcoins for goods took place. Up until this point, bitcoins were simply mined and had not been exchanged for other goods, meaning that there was no way to put a value on them. The first trade occurred when a bitcoin miner decided to exchange 10,000 bitcoins for two pizzas, the two most expensive pizzas that are; with the recent bitcoin price surge. Slowly, bitcoin gained popularity as more people started trading the currency, and the added factor of anonymity made it even more lucrative. Soon bitcoin became the number one currency used to trade on Silk road, a dark web black market where everything was available for sale. In the meantime, bitcoin’s rise in popularity gave birth to other cryptocurrencies hoping to rival Bitcoin, such as Litecoin and Namecoin. Read more about the growth of bitcoins and the rise of altcoins.

 

Written by Ismail Yassin

Co-founder of Crypto News and future Crypto-Millionaire with the intention of bringing all the beginner traders, just like him not too long ago, along on the ride. Hop on the crypto-bandwagon and H.O.D.L!

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