A Concise History of Bitcoin From 1983 to 2015

Bitcoin is believed to be the oldest crypto. However, the first efforts to create a cryptocurrency started a decade ago before Bitcoin was launched. So, what about having a closer look at how things were evolving?

Everything Started Decades Before the Bitcoin Launch

The idea of anonymous distributed electronic cash first came to the world in 1983 when American cryptographer David Chaum published his paper titled “Blind Signatures for Untraceable Payments”.

Source: 1e9.community

In this paper, the cryptographer conceptualized a currency that can be sent from one person to another privately. He also developed a “blinding formula”. This formula was used to send encrypted information between users.

Further, David Chaum created his own company DigiCash and implemented his idea in the first cryptocurrency called eCash. Even though the company went bankrupt in 1998, it laid a strong foundation for the further development of cryptocurrency.

Further projects that contributed to the development of the crypto industry are the following:

E-Gold (launched in 1996 by Dr. Douglas Jackson and Barry Downey) - electronic money tied to gold. The project enabled users to transfer ownership of gold rapidly.

Hashcash (launched in 1997 by Alan Back) - the main aim of the project was to filter spam and prevent denial-of-service attacks. But it has introduced many things that were used by Bitcoin later. Proof-of-work for the creation of new coins and their distribution in the network was one of these things. Over time, more power was needed to mine Hashcash, and little by little, the project fizzled out.

Bit Gold (launched in 1998 by Nick Szabo) - this electronic currency introduced many concepts that enable Bitcoin creation such as peer-to-peer transfers, mining, cryptography, and ledger technology. 

B-Money (launched in 1998 by Wei Dai) - this project, like all the previous attempts to create a cryptocurrency, was unsuccessful. But it also made its contribution to blockchain technology by relying on a decentralized network and creating digital pseudonyms.

2008 - Bitcoin Launch: the Turning Point in the History of Crypto

In 2008, somebody named Satoshi Nakamoto published the Bitcoin white paper. There, he described the blockchain system and how it can serve the cryptocurrency market.

On January 3, 2009, Satoshi Nakamoto created the first block of the Bitcoin blockchain. This block is called the genesis block. Nine days later, Satoshi Nakamoto made the first-ever transaction in the Bitcoin network. He sent 10BTC to Hal Finney, a cryptographer who had created proof-of-work. 

2009 - the First Service for BTC Exchange Is Created

2009 was the year when the first Bitcoin buying and selling service was created. It was called the New Liberty Standard. This service established the value of Bitcoin according to the value of energy needed to mine one coin (1.309,03 BTC for $ 1). The first registered market transaction was performed on October 11, 2009, when somebody bought 5,050 BTC for $5.02. 

Source: Blockchain.com

It was the moment when cryptocurrency became an economic good.

2010 - the First Purchase with Bitcoin Is Made

On May 22, 2010, the first purchase was made with Bitcoin. Laszlo Hanyecz, a renowned Bitcoiner, published his request in a forum on Bitcointalk.

Source: Bitcointalk

Four days later, on May 22, Laszlo reported that he had received his pizzas. Since then, the crypto community celebrates Pizza Day on May 22.

Source: Bitcointalk

It was the first purchase made with Bitcoin. But not all know that it was an open offer. Laszlo bought 8 pizzas for a total of 40,000 Bitcoins. In August of the same year, he claimed that the offer isn’t valid anymore.

Source: Bitcointalk

And indeed, at that time, this purchase would be worth $600. Sounds kinda too much for 2 pizzas.

On July 18, 2010, a brief message was sent on Bitcointalk about the launch of the first exchange where Bitcoin can be bought and sold. 

Source: BitcoinTalk

Mt.Gox became one of the most important platforms until its controversial and dark demise. 

In March-April 2011, three more exchanges were created that supported Bitcoin to fiat exchanges. Those were Britcoin, Bitcoin Brazil, and BitMarket.eu.

2011 - Silk Road Emerged

2011 was the year when Dark Web released its Silk Road website. Known as “eBay for drugs”, the website had operated for 3 years and was used to trade illegal items and substances. In 2013, the FBI arrested the Silk Road owner and founder Ross Ulbricht and seized 144,000 Bitcoins. 

2014 - Mt. Gox Collapses. Microsoft Announces That They Start Accepting BTC as a Payment Method

Source: Cointelegraph

in February 2014, Mt. Gox collapsed. More than 850,000 Bitcoins were stolen by the exchange CEO Mark Karpeles. The trust of users was undermined, and it sent the BTC price down. 

Even though Mark Karpeles was arrested in 2015, and Mt. Gox was obliged to reimburse users for their losses, the exchange users are still waiting for their funds to be returned. 

But 2014 brought also good news for BTC. Microsoft announced in December that they will start accepting payments in Bitcoin in association with BitPay, their payment processor. 

2015 - NASDAQ Starts Using the Blockchain Technology

In June 2014, NASDAQ decided to start testing blockchain for trading pre-IPO company shares. This beginning has inspired many other companies to start exploring blockchain for their needs. We can say that since 2015, the mass adoption of Bitcoin and blockchain started.

What Has Bitcoin Achieved by Now?

More than a decade has passed since Bitcoin was launched. But during this time, BTC achieved a lot.

It became a valid alternative to fiat money. Many websites accept the coin as a payment method. Among companies that accept Bitcoin as a payment for their services or goods are Microsoft, Home Depot, AT&T, and many others.

Bitcoin is legalized in many countries. In some, such as El Salvador, BTC is legal tender.

But the most important thing is that Bitcoin popularized blockchain. The technology is used now in many fields, including those not connected to crypto: medicine, logistics, welfare, education, etc. Many other projects were created that rely on blockchain for different real-world applications. Even though now, technology is still not developed to the extent we’d like it to be, it is for sure changing the world.