A Very Short History Of Bitcoin
Contributed in Russian by Andrey Anosov
Long before Bitcoin and other crypto-currencies became digital currencies, an idea appeared on one of the forums. Before a coin attracted the attention of thousands and maybe millions of investors, ordinary lovers of new products and those who want to profit from the next freebie –known as “Satoshi Nakamoto” suggested one interesting idea that was successfully implemented in the near future.
In October 2008, an article was published by Satoshi Nakamoto: “A Peer-to-Peer Electronic Cash System” which means: a decentralized or equitable electronic cash system.
Satoshi became the father of crypto-currency or blockchain. There were multiple attempts to create similar structures, but it was all centralized — similar to existing banking structures.
The first version of Bitcoin code was released in January 2009. The first block in the Bitcoin blockchain was created, which gave rise to the first Bitcoin mining. This transaction was between Nakamoto himself and one of the developers named Hal Finney.
Initially, Bitcoin did not have an exchange rate and equivalence in fiat currency, but in October 2009, one US dollar was equal to 1.309 Bitcoin. The exchange rate was equal to the cost of electricity to create the first Bitcoin through mining.
In 2010, the first Bitcoin exchange was created. It was called “dwdollar”. Florida developer Laszlo Hanetz paid 10,000 bitcoins to someone in England, who in exchange bought Laszlo pizza which cost $25. It was the most expensive pizza in history. At the time of this writing, 10,000 bitcoins is equal to $130,000. For example, in mid-December 2017, 10,000 bitcoins was equal to almost half a million dollars.
In August 2010, hackers discovered a vulnerable place in the Bitcoin blockchain, which allowed them to generate 184 billion Bitcoins and the price of Bitcoin dropped at the time.
The Bitcoin exchange platform called “MtGox” was created the same year and Bitcoin; ended 2010 with a market capitalization of just over $ 1 million.
In 2011, a black market was created under the name “Silk Road” based on Bitcoin. The main idea of this project was anonymous transactions. For the first time ever, the price of Bitcoin rose above $ 1. At the same time, Bitcoin gained fame as a black market currency or a way to purchase drugs online.
In 2012, some companies began to apply and accept Bitcoin as a currency to pay for goods and services. By the end of 2013, the price of one Bitcoin was a little more than $ 1,000.
In 2014, China, USA and UK began to create rules and restrictions on the use and taxation of Bitcoin, which allowed the use of Bitcoin by financial institutions. Many companies, including Microsoft, have begun to accept payments in Bitcoins.
In February of the same year, the main Bitcoin exchange “MtGox”, was subsequently hacked by DDOS attacks, losing millions of dollars and hastily closed. Despite this, the price of Bitcoin, though dropped to $200, stabilized in the range of $200 and 350.
During 2015, the price of Bitcoin remained stable and Bitcoin began to acquire the qualities of a legitimate currency. Ross Ulbricht, the founder of the Silk Road, was sentenced to life imprisonment, signaling to the world that Bitcoin cannot be used for criminal purposes with impunity.
Another hacking occurred in 2016 on one of the crypto-currency wallet services, as a result of which about 72 million US dollars were lost.
Finally, at the end of 2017, the price of 1 coin went up to 20,000 US dollars, starting in 2017 with a price of $1,000. Right after, due to the fact that many countries have banned the use of cryptocurrencies, and the main social networks like Facebook and others have banned the advertising of cryptocurrencies for various reasons. By the end of 2018, the price of Bitcoin went down to $3,000, which made mining almost unprofitable. The price went up the next year. At the time of this writing, the bitcoin price is $5,300.
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