The History of Bitcoin
Launched in 2009, Bitcoin allows for Internet-based customer-to-customer transactions with a greater degree of privacy and anonymity compared to traditional credit card payments and banking interactions. Many have embraced Bitcoin for the many advantages it offers, with fast, simple transactions and minimal fees. Here’s a look at how the currency has evolved.
- 2007: Although it’s unclear whether Satoshi Nakamoto is a single person or a group of people, according to legend, Nakamoto began working on the concept of Bitcoin around this time. Although most likely a pseudonym of some kind, Nakamoto is on record as living in Japan in 2007.
- August 2008: The Bitcoin.org domain is officially registered on August 18. Interestingly, it was registered at anonymousspeech.com, which is a site that allows users to register domain names anonymously.
- October 2008: Satoshi Nakamoto publishes a paper called “Bitcoin: A Peer-to-Peer Electronic Cash System.” The paper proposes using a software code to authenticate and protect transactions, which would eliminate the need for a centralized bank or government treasury. This paper also solves the problem of double spending so as to prevent the currency from being copied.
- November 2008: On November 9, the Bitcoin project is registered on SourceForge.net, which is a community collaboration website focused on supporting the development and distribution of open source software.
- January 2009: On January 3, the first official Bitcoin activity takes place when the Genesis block is mined (Block 0). This is followed with the January 9 release of Version 0.1 of Bitcoin, which includes a bitcoin generation system that would create a total of 21 million bitcoins through the year 2040. This software is so complete that it sparks speculation the bitcoin was developed by more than one person. On January 19, 2009, the first bitcoin currency transaction takes place in Block 170 between Nakamoto and cryptographic activist Hal Finney.
- October 2009: On October 5, New Liberty Standard publishes a bitcoin exchange rate, which establishes bitcoin value at US$1 equals 1,309.03 BTC. This equation includes the cost of electricity to run a computer while generating bitcoins.
- February 2010: On February 6, the Bitcoin currency exchange is born, establishing the Bitcoin market. Also in this month, the encryption patent application that was filed on August 15, 2008, by Neal Kin, Vladimir Oskman, and Charles Bry is published.
- May 2010: Just 3 months after a marketplace was established for the bitcoin currency, a user named Laszlo uses bitcoins to order pizza. Reportedly, the pizza cost him 10,000 bitcoins.
- April 2013: Following a price surge that began in January of this year, the collective value of all bitcoins passes a billion dollars.
- November 2013: At a Senate hearing on November 18, federal officials indicate that such digital currency networks offer real benefits for the financial system. Also in this month, bitcoin value surpasses US$700.
Today, overall merchant and consumer bitcoin use is rising about 10 percent each month, with more and more merchants beginning to accept the cryptocurrency. Most notably, this group of merchants includes PayPal, Dell, Expedia, Dish Network, and Overstock.com.