What is Bitcoin? Bitcoin is a cryptocurrency used as an exchange for goods or services paid online, digitally. Cryptography was used to create and control the online payment currency.
The beginning – In November 2008, a paper was posted to a cryptography mailing list using the name Satoshi Nakamoto. It was introduced as Bitcoin – A peer to peer electronic cash system for electronic transactions, without relying on trust.
It was in January 2009 the Bitcoin network really came into effect. It ran quietly in the background and was a topic of excitement and fascination among coders but hadn’t really be noticed much outside the digital realm. It was discussed mainly in online forums and eventually that led to having its own forum set up, dedicated to Bitcoin. It helped coders co-ordinate as the code was changed, and by the middle of 2009, people other than Satoshi Nakamoto were contributing to the open-source codebase in Github. It was an innovative breakthrough in cryptography. A community known as Cypherpunks played a key role in the recognition and understanding of the technology.
The first transaction took place in May 2010 when a programmer spent 10,000 BTC to purchase 2 pizzas online. Advertised was “I’ll pay 10,000 Bitcoins for a couple of pizzas…if you’re interested let me know and we can work out a deal” – Laszio.
In early 2010 A market support system became apparent which allowed structured trading. Users were becoming more widespread and by 2011 Bitcoin had become popular. Its use was however, somewhat limited to the ones who got into it early on. The anonymity of the digital currency made it ideal for the black market online dealings.
In 2011 The Silk Road was created. It was a shop online for illegal goods and services, mainly drugs and prostitution that used Bitcoin to pay for everything. Once word of this untraceable money source got out, it was linked mainly to money laundering and drugs.
Forbes, Bloomberg and Time magazine wrote articles about it. People of authority such as politicians warned against it and many articles were written in the media.
Wikileaks began accepting donations in Bitcoin. Apps were launched, including Bitpay, a service accepting Bitcoins over the phone. Eventually Bitcoin began to be traded for other currencies.
The creator, Satoshi had always overseen the maintenance of the codebase but never met with anyone or spoke over the phone. He only posted on forums and through direct messaging online. No one had ever met or knew him personally, or at least if they did, he went by a different name and was unidentifiable.
In April 2011 he wrote his last email to Gavin Anderson leaving him in charge of the operation and was never heard of again. Anderson and 4 others structured new codes and updated the system. He told them that he had moved on to other things and was sure the project was in good hands.
In 2012, Bitcoin currency was under attack from hackers constantly and several million were stolen from the databases ofthe various large accounts. The black market was still thriving online with the use of Bitcoin and an estimated 15,000,000 passed through it in 2012 alone. Gambling sites were also utilising it.
WordPress began accepting bitcoin in order to facilitate bloggers internationally where traditional payment was restricted internationally. It took off in the blogosphere. Boom!
By the end of 2012, the price of 1 BTC was worth over $13
In 2013 The Silk Road was shut down and all assets seized. The police force now owned a massive amount of the Bitcoin empire. Though this was a huge omen for Bitcoin among the bad name that was associated with it, it pushed through the crisis with the help of the banks that were now accepting it as a real form of currency.
One bank decided to ban Bitcoin after initially approving it and The Peoples Bank of China banned financial institutions from working with those who traded it.
On the other hand, the US Senate held a hearing which was open to the long-term prosperity of Bitcoin.
There were hundreds of copycat systems released and a lot of scams but Bitcoin was not to be rivalled and had taken off independently, but of course there are other options.
By the end of 2014 1 Bitcoin was worth a staggering $314 and by the end of 2015 1 Bitcoin was equal to $426
Here is a graph showing the comparison of Gold value to that of Bitcoin, bearing in mind this is before the WannaCry ransomware virus hit:
Security still remains an issue and in 2016 a major exchange currency company in Hong Kong called Gatecoin lost 2,000,000, then promptly stopped trading. Shapeshift were another US based exchange that suffered a series of hackings.
In 2017 The Wannacry ransomware cyber attack happened and brought down the computer systems of many large organisations including hospitals, FedEx and Deutsche Bahn and many many more. They were operating on a Windows system and it caused them to run on an emergency only system until a kill switch was discovered by Marcus Hutchins, a 22 year old web security researcher from Devon, England by registering a domain name he found in the code of the ransomware. It greatly slowed the initial outbreak, but since then newer versions have been discovered without the kill switch. Luckily researchers have found ways to recover data from some machines but in order to fully recover data, a ransom is being demanded of payment via Bitcoin, so that it is undetected. This has resulted in Bitcoin value shooting through the roof.
At the moment 1 Bitcoin is trading at $3,170, as of today!!!
This year Bitcoin Cash has been forecast as a new asset to Bitcoin but its partner company will only be worth a fraction of the original bitcoin value. In the long term, this will probably be a sustainable alternative.
`£100 of Bitcoin in 2010 would be worth £4.3M in todays money!’
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