Bitcoin - The birth and rise (part 1)
(6 minutes read)
Almost 10 years ago, to be more precise on August the 18th
2008, just one day before my 26th birthday the domain name
bitcoin.org was released. I clearly remember this day because just less then a
month I had applied for a job on the Cruise Ships. And in the evening I got
e-mail that I was hired and I need to board on September 8th in New
York. LOL. If I knew back then about Bitcoin, and how big impact is going to be
today, I was probably going to invest a lot of money into it. But anyway I
didn’t so let’s get back to the topic. On 31st of October the same
year Satoshi Nakamoto (the unknown person or a group of people), published a
paper on the cryptography mailing list metzdowd.com describing the bitcoin
digital currency. It was titled: “Bitcoin, a peer to peer Electronic Cash
System”.
In January 2009 Nakamoto released the first bitcoin software
that launched the network, and the first units called bitcoins. He claimed that
he began working in 2007, and he continued to collaborate with other developers
until 2010. Where in 2010 he handed over control of the source code repository
and network alert key to Gavin Andresen (software developer), transferred
several related domains to various prominent members of the bitcoin community,
and stopped his involvement in the project. Nakamoto’s identity was never
found, although he claimed that he is a 37 year old male who lived in Japan.
But many people speculated that he has nothing to do with Japan, because of his
perfect English and the fact that Bitcoin software was never documented or
labeled in Japanese. The public Bitcoin transaction log shows that Nakamoto’s
known addresses contain roughly one million bitcoins. As of 17thDecember 2017 this is roughly worth over 19 billions. Which makes Nakamoto the
44th riches person on Earth. There is still doubt about the real
identity of Satoshi Nakamoto.
It is believed that the value of the first bitcoin
transaction was 10.000 bitcoins for Two Pizzas at Papa John’s. Over the next
three years bitcoin will become even more popular and reaching many milestones
On August 6 2010 was the first vulnerability in
the Bitcoin protocol. And this vulnerability was exploited on August 15 where over 184 billion of Bitcoins were generated in a transaction and send to
two addresses on the network. However this transactions was discovered
immediately and erased after the bug was fixed. And this was the only major
security in the Bitcoin’s history.
The growth of
Bitcoin:
2011 – A lot of
organizations like Electronic Frontier Foundation, Wikileaks and many others
started to accept Bitcoin. Over 5 million bitcoins have been created by this
time but it was still well under 21 million to be created. Between 2011 and
2012 many new market places got opened as more and more people began to find
out about bitcoin. On June 2nd 2011 the bitcoin price reached 10$.
2012 – The value
of the bitcoin started to grow. So, as the value grow a lot of criminals,
hackers wanted to get their piece of the pie. So on March 1st 2012
around 50.000 bitcoins were pilfered (stolen) from a security breach at the web
host Linode. This made people realized that bitcoin has a lot of value and made
it even more valuable. Unfortunately this wouldn’t be the only theft of bitcoin
during it’s lifetime, but it was the largest at this point, and also made a lot
of people notice bitcoin.
In September 2012 The Bitcoin Foundation was set up. There
has been a lot of conferences during the previous two years, but there was no
Foundation. And this Foundation was formed so it can standardize, protect and
promote bitcoin around the world.
2013 - Bitcoin is starting to really increase it’s
value. March 28 market cap reaches 1 billion and this certainly got the
attention of many people. The first
bitcoin ATM appears in San Diego California on May 2.
November is the
month of big changes for Bitcoin. Since March till November the bitcoin price
has gone from 47$ to astonishing 1072$ per one bitcoin. On November 18th
the US Senate holds a hearing about bitcoin and it is announced under the
tittle: ‘Beyond Silk Road’. Potential Risks, Threats, and Promises of Virtual
Currencies. Many of the panelists and Senators agree that Bitcoin holds great
promise. November 19 -
Bitcoin transactions surpasses Western Union.. November 20th People’s
Bank of China is OK with Bitcoin. Mr Yi at an economic forum says that ‘people
are free to participate in the Bitcoin market’, and that he would ‘personally
adopt a long-term perspective on the currency’. November 22nd - Richard Branson’s Virgin Galactic begins
accepting Bitcoins. November 29th the largest exchange Mt. Gox,
bitcoin price peaks at 1242$ per Bitcoin. This is a result to the rapidly
growing Bitcoin investment from China. The Chinese citizens embrace the freedom
provided by Bitcoin with open arms.
December 5 - Chinese Government Bans financial
institutions from using Bitcoin. The People’s Bank of China puts it’s first
restraints on Bitcoin. They declared Satoshi Nakamoto’s invention not to be a
currency. They prohibit any financial institution to trade, insure or offer
services related to Bitcoin. And over
the following weeks more restrictions slowly strangle the Chinese
Cryptocurrency markets. And prices around the glove start to drop down. In just
10 days the price will drop at 839$. The start of 2013 was great for Bitcoin,
and the investors, but at the end of the year investors are losing their money
as the price continue to drops in 2014.
2014 – DDoS (Distributed Denial of Service) attacks, scams thefts are
increasing. Bitcoin is becoming more attractive to hackers and criminals.
February 7th Mt. Gox the world’s largest exchange, Bitstamp and BTC
all experienced a stoppage trading due to massive DDoS attacks. However only
Mt. Gox halted (stopped) withdrawals first on February 6th which
resulted in a drop in BTC price. The DDoS attack was detected on February 11th
2014. February 24th Mt. Gox closes. After they’ve put the halt to
withdrawals on February 6th, claiming that a hacker exploited their
poor software through attacks, bitcoin exchange Mt. Gox’s website and trading
engine shut’s down without any official explanation. Many exchanges and Bitcoin
businesses issue a joint statement about the mismanagement and deception of Mt. Gox. A leaked document
showed that over 744.000 Bitcoins were lost by the company. The Bitcoin price
in two months dropped from 1242$ to 547$ per Bitcoin, which is more then half.
March 6 - Newsweek Claims Dorian Nakamoto is Bitcoin’s Creator. The
price is 662$. This drives an enormous attention worldwide to Dorian Nakamoto
(unemployed engineer in Temple City, California). Dorian denies any involvement
with Bitcoin. March 26th the IRS Declares Bitcoin to be taxed as
property not a currency. This decision is very complex and within 10 days the
price will drop to 453$.
TO BE CONTINUED….
Thank you for reading
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