10th BTC Birthday: All You Need to Know About Bitcoin

10th BTC Birthday: All You Need to Know About Bitcoin

This year Halloween marked a decade since one of the most conspiracy currencies (if it is one) emerged. On October 31, 2008, right when the world was suffocating from the financial crisis, a person or a group of people going as Satoshi Nakamoto, a «Japanese guy», dropped a bitcoin white paper.

Ten years ago it was a representation of the protest against the established banking system but now bitcoin is more than that. Dubbed the «Big Daddy», this cyber coin has gone through a long way straight to Wall Street. Let’s look at the main milestones of cryptic bitcoin’s existence.  

The Dawn

The world still has no idea about who indeed Satoshi Nakamoto is (are). However, the language used in bitcoin’s white paper implies it might not have been a Japanese person but English, whereas the complexity of the code which underpins bitcoin hints there might have been a whole team working on it. 

The whole idea of bitcoin lies in letting people dodge centralized banking systems via distributed ledgers. The first 50 bitcoins — referred to as «Genesis block» — were mined by 2009. A week after that the first bitcoin-transaction took place. And it was from Nakamoto to a deceased dev Hal Finney. 

The first trading platform where users could buy and sell bitcoin was called «dwdollar». It is there where the real-world transaction occurred. As bitcoin was almost worthless, one guy purchased pizza for bitcoins, see here what happened about it.

What is clear is that after bitcoin settled, Satoshi Nakamoto «split fast». By 2011 he passed the reins of governance to a software engineering Gavin Andresen and went mute on public forums. Nakamoto, according to estimates, also took with him 1 million BTC units. Andresen, in his turn, became the top dev of the open code which perfects bitcoin protocol.

 

Gavin Andresen

Dark Spots on Bitcoin’s Reputation

Two companies have left smudges on bitcoin’s reputation. The first — Mt. Gox — was a crypto-exchange which initially supported bitcoin in 2010 and later handled around 70% of all cyber money transactions globally. However, in 2011 it saw many disastrous hacks and them went bankrupt, undermining crypto-reputation, predominantly, establishing bitcoin as not a very safe currency. 

Silk Road added fuel to the situation. This online dark web marketplace handled transactions for drugs, guns, etc. for bitcoin, making it a «coin of criminals». Once American law enforcement closed down the platform, the price for BTC plummeted. This created incentives to purchase bitcoin at a lower price. 

Early Bitcoin Investors Weigh In 

Among those who first bought bitcoin were venture capitalist Tim Draper, who has remained a keen supporter of crypto until now and even predicts in four years from now BTC unit will cost $250,000. Draper, in particular, bought BTC after Mt. Gox was shut down. 


Tim Draper

The other known investors — twin brothers Tyler and Cameron Winklevoss — piled into BTC in 2013 and right now they are believed to be crypto-billionaires. The twins are pushing for Bitcoin ETFs nowadays. 


Tyler and Cameron Winklevoss

Bitcoin and Wall Street 

Today bitcoin is a household name on Wall Street. Last year December two American non-crypto exchanges started trading bitcoin-based futures — CME and Cboe. When the former launched the trade, bitcoin reached a price milestone of $19,839, as per coinmarketcap.com. As CNBC’s markets reporter Kate Rooney explains, «‘futures’ let an investor bet that the price will hit a certain level without having to buy the asset itself.

Issues

Now many experts claim bitcoin is no longer efficient due to the scaling problem. The network is overloaded, that’s why the transaction time and fees are high, which makes it less attractive for users as the means of payment. If that was bitcoin’s mission from the outset, now it is more like an asset — people invest in it hoping to sell the coin at a larger price to get revenues. 

As of writing bitcoin is traded at nearly $6,400 and it is still the most valuable cyber-coin in the world, despite its difficulties. 

Images Source: Flickr