The Journey of the First Cryptocurrency: Bitcoin

From its modest beginning in 2008 to its ATH in November 2021, Bitcoin (BTC) has led investors and the rest of the world on a wild ride. Within just over a decade, the very first cryptocurrency has witnessed massive price fluctuations on its way to tens of thousands of dollars. Still, Bitcoin doesn’t fail to attract the interest of institutional and retail investors across the globe and posits itself as the ‘Digital Gold’ that may soon overtake gold as the store of value.

Bitcoin is designed as an alternative payment network that allows people to conduct financial transactions without relying on any central authority such as the government or banking institutions. The Bitcoin network uses the proof-of-work consensus mechanism for tracking and verifying transactions.

THE Birth of Bitcoin: 2008

Bitcoin was born after the 2008 Great Recession as a result of people’s rising skepticism towards banks and their unprecedented involvement in the financial system, which led to the recession. Satoshi Nakamoto, a pseudonymous individual, published a white paper, ‘Bitcoin: A peer-to-peer electronic cash system’ proposing an alternative ‘self-governing, secure’ payment system to combat the inefficiencies in the conventional centralized financial systems. At an initial price of $0.0008 per bitcoin, the Bitcoin network was launched on Jan. 3, 2009.

Source: Cointelegraph

2009: First Transaction

Hal Finney, a computer programmer, got the world’s first bitcoin mining payment (10 BTC) for mining block-70 on the noon of January 12, 2009. He received the tokens from ‘Satoshi Nakamoto,’ and it has been generally speculated since then that Satoshi was the one who built the Bitcoin blockchain network, as he also published the whitepaper in 2008.

2010: Pizza for Bitcoin

Bitcoin remained a novelty product a year later, with only fans and computer geeks interacting with it. A hungry programmer, Laszlo Hanyecz, paid 10,000 BTC to buy two Papa John’s Pizzas. The 10,000 bitcoins today will be worth $430,000,000! (approx.)

2011: 1 BTC = $1

As per the historical data from investing.com, Bitcoin’s price for the first time surpassed $1 on February 9, 2011. Furthermore, it was around this time that the entire crypto market hit a market cap of $10 million.

2012: Bitcoin-Euro Vending Machine

According to an old post by Verge, a German student developed the country’s inaugural BTC-Euro-based vending machine in 2012. This was a watershed moment for crypto, which had previously been dismissed as a technological fad. Bitcoin’s price and volume both increased dramatically this year.

2013: Market cap touches 1 Billion $

Bitcoin’s market capitalization crossed $1 billion in 2013 while the price of an individual BTC was $92. Its total supply was around 11 million, and the value was range-bound with considerable volatility during the latter half of the year.

2014: A Bitcoin Wedding

On August 5, 2014, a Floridian couple registered their marriage on the Bitcoin blockchain. The wedding took place at the Disney World Coins in the Kingdom Bitcoin Conference on October 4th and 5th at The Wyndham Lake Buena Vista on The Walt Disney World Resort. According to Coindesk, they paid for their Disneyland ceremony with 0.1 BTC. Microsoft, the world’s biggest computer and related service provider, accepted Bitcoin as a form of payment on December 11, 2014, in collaboration with BitPay, a crypto payment service.

2016: A Revolutionary Year for Bitcoin

According to coinmarketcap.com, the price of one bitcoin increased by 121%, from $433 to $959 in December 2016. According to numerous media reports, most trades took place in China, with several Chinese purchasing Bitcoin to buffer against the sinking Chinese RMB in 2016.

2017: Ernst & Young starts accepting BTC

According to numerous media sources, Ernst & Young (EY), one of the Big Four accounting companies, began accepting Bitcoin for its services in January 2017. Meanwhile, Jamie Dimon, CEO of JPMorgan and an American multinational investment bank, called Bitcoin a “fraud.” He later withdrew his statement. In March, the price of bitcoin reached its all-time high of $20,000.

2018: Warren Buffett’s Take on Bitcoin

Warren Buffett, the CEO of Berkshire Hathaway, stated cryptocurrencies such as bitcoin and others were “ probably rat poison squared” in an interview with CNBC. Bitcoin’s price had already surpassed $10,000 at that point. In the interview, Buffett stated that he did not have short or long positions in Bitcoin since he does not yet comprehend the underlying technology. However, Bitcoin had a difficult year, with many investors losing huge amounts of money and questioning the cryptocurrency’s future. Its value collapsed by 70% during the year.

March 12, 2020: A Dark day for BTC

Bitcoin’s price dropped by more than 50% on March 12, 2020, to a year-low of $4,000 due to pandemic-related uncertainties. Many crypto traders activated their stop-loss mechanisms due to the abrupt price collapse and the lack of a circuit-breaker mechanism on crypto exchanges, dragged the prices even lower. This event, dubbed ‘Black Thursday’ by the crypto community, caused numerous reverberations in the prices of other crypto coins.

2021: Year of BTC

In March Tesla started accepting payments in Bitcoin. The cryptocurrency’s price soared to a peak of $64,829 post this development on April 14. However, on May 13, Musk announced that Tesla would no longer accept Bitcoin payments for its vehicles owing to environmental issues surrounding bitcoin mining.

Bitcoin’s value sank by roughly 50% as a result of this. Later in September, El Salvador became the first country to accept Bitcoin as legal tender besides the US dollar in all purchases.

In October, the Securities and Exchange Commission (SEC) approved bitcoin futures ETFs, a first for the market, following a meeting of the regulator’s five commissioners. On November 10, Bitcoin reached an all-time high of $68,789.63.

What lies in the future?

Bitcoin is being widely accepted at thousands of ecommerce merchants and organizations such as Microsoft, AT&T, PayPal, Wikipedia, Starbucks, Twitch, and even some fast-food restaurants have started accepting Bitcoin as payment. Bitcoin stands at $ 42,103.75 currently. Putting short-term volatility aside, economists predict that it might reach $100,000 (Rs 72 lakhs) in the coming years.