Bitcoin’s 10th Anniversary: 10 Milestones that capture the rocky and exciting history of this digital asset.
Today marks the 10th anniversary of the Bitcoin Whitepaper, the document that spawned an entirely new form of transactional trust, and lead to the creation of Bitcoin; the first ever digital currency. Though its been a tumultuous ride for Bitcoin, ten years is something to marvel at. Especially when considering how so much of its growth and adoption was organic and spearheaded by its fiercely passionate user-base. So, in light of this accomplishment we wanted to write an article that illustrates Bitcoin’s past through its ten biggest milestones (both good & bad), and hopefully through this process we’ll provide some insight into its future.
- The creation of the Bitcoin Whitepaper:
On October 31st, 2008 an anonymous programer going by the pseudonym “Satoshi Nakamoto” drafted “The Bitcoin Whitepaper”. A nine-page paper that proposed a decentralized peer-to-peer payment network that would be powered by its user’s, eliminating the need for third-parties.
2. Early days: The Genesis Block & The Bitcoin Pizza:
In early 2009, the first block containing Bitcoins, hereby referred to as the “Genesis Block” was mined. By January 9th, the first iteration of Bitcoin’s software was released. Three days later, on January 12 the first ever Bitcoin transaction occurred when Nakamoto sent 10 Bitcoins to the noted computer programmer and Bitcoin advocate Hal Finney. Unfortunately, Mr. Finney passed away in 2014, but many people within the community continue to speculate that Mr. Finney was in fact Satoshi Nakamoto. Bitcoins next breakthrough came in 2010. After sending Bitcoins from one person to another, the logical next step was to try and use Bitcoin to purchase actual goods & services. This happened in May of 2010, when Laszlo Hanyecz sent 10,000 Bitcoins to a man in London to pay for two pizzas, valued at $25. If your head is throbbing thinking about how much that sum is worth today, your not alone. The net present value of Mr. Hanyecz’s pizza delivery is over $60,000,000 USD!
3. Bitcoins First Protocol Vulnerability:
2010 wasn’t all smooth sailing for Bitcoin. Later in that year, someone spotted a vulnerability in the protocol and exploited it to allow for transactions to be processed without proper verification, the result was 184 billion new BTC being minted. Since Bitcoin had always been designed to only ever produce 21,000,000 units, this would have decimated its’ value as this would have eliminated scarcity from the equation of trying to assign asset value. Thankfully this vulnerability was detected very early on and was fixed before any real damage could be done.
4. Bitcoin Public Perception Improves; Cryptocurrency passes the $100 threshold:
After being featured in an article from TIME magazine, awareness surrounding the digital currency continued to widen. In April of 2012, the currency surpassed the $100 threshold for the first time in its short history.
5. Bitcoin Surpassed the $1,000 Threshold for the First Time:
In 2013, Bitcoin’s fierce and loyal community continued to push the digital currency forward. The price of Bitcoin surpassed $1,000 for the first time.
6. All Good Things Come to an End: The Mt. Gox Hack:
In January of 2014, a Japan based BTC Exchange called Mt. Gox was climbing up the ranks and handling 70% of all Bitcoin transactions in the world. Nearly one month later, Mt. Gox was bankrupt. Mt. Gox was hacked and the exchange lost about 740,000 Bitcoins, which was the equivalent of 6% of all the Bitcoins in existence at the time. That sum has a net present value of $4.6 Billion USD. Over time regulators have managed to recover around 200,000 coins , but the outstanding 540,000 Bitcoins are still lost. Mt. Gox never recovered from the media backlash and they now serve as the ultimate reminder for why its not smart to leave decentralized digital assets like Bitcoin, on centralized exchanges.
7. The Band Breaks Up — Bitcoin Cash forks from Bitcoin:
After over 2 years of infighting over issues pertaining to scalability and block size, the Bitcoin community finally hard-forks, and a new cryptocurrency dubbed “Bitcoin Cash” emerges.
8. Its 2017, and your grandparents ask “Have you heard about this Bitcoin thing?”:
2017 was the year that Bitcoin saw meteoric growth and really gained some traction outside of its’ core following. After a tough 2016 which saw Bitcoin struggle to maintain its $1000 price point, Bitcoin finally received some mainstream attention and by June of 2017 was trading at $3000. The rise did not stop there, it hit $6000 in October, and $10,000 by November. By the end of the year Bitcoin was trading at over $19,000. There was truly no precedent for a such a strong and sudden rise in value, and retail and institutional investors alike continued to chase the trend in hopes of getting in on the action. Unfortunately, the trend did not last forever and the price of Bitcoin started to correct in 2018.
9. 2018 — Fear, Uncertainty, & Doubt:
2018 was a challenge for Bitcoin and alt-coins alike. After finally capturing the interest of institutional investors, the technology didn’t scale at the same rate as interest from the market did. Eventually without new promising updates about the technology, there were no new trends to warrant Bitcoin trading at such a high price. Investors started to liquidate their positions, which cooled down the market significantly. To date Bitcoin is trading at $6,332 which is a decline of almost 70% from its All-Time-High.
10. 2018 and Beyond:
The last few weeks have seen the market operate at somewhat of a standstill. Many crypto advocates and investors are trying to recreate that mainstream adoption that was seen in 2017. Most notably is the creation of financial products that give investors exposure to Bitcoin without actually reuiqring them to own any, such as Bitcoin ETF’s. There are three main funds that are vying for the chance to give investors Bitcoin exposure through an Exchange Traded Vehicle. First is from SolidX Partners, whose ETC product will be called ‘SolidX Bitcoin Trust’ and will list on the NYSE with the ticker ‘XBTC’. The second comes from the Winklevoss twins and their ‘Winklevoss Bitcoin Trust’ with plans for it to trade on the BATS exchange under the ticker ‘Coin’. Last is the ETF product administered from Grayscale Investments, their ETF trades over-the-counter under the ticker ‘GBTC’.
Its been a bumpy ride for Bitcoin adoption so far, but someone once said “You can’t make an Omelette without breaking some eggs”. Hopefully in the grand scheme of things, the eggs are already cracked and the whisking is just about to begin.
