Bitcoin History in the making
(BTC) Bitcoin history is relatively short, here we list the main events in the evolution of the world’s first and most successful virtual currency. The name bitcoin was chosen at the outset and interestingly it has stuck as bitcoin became front-runner of virtual currencies. Others have tried to mimic bitcoin but it has a huge lead in terms of its market value, acceptance and use.
Neal King, Vladimir Oksman and Charles Bry filed an encryption patent application. All three individuals denied having any connection to Satoshi Nakamoto the accredited inventor and creator of bitcoin. The three also registered the site bitcoin.org in the same month on anonymousspeeech.com. This facility allowed them to buy the domain name with anonymity, a remarkable turning point in bitcoin history.
Satoshi Nakamoto publishes “Bitcoin: A Peer to Peer electronic cash system” via the Cryptography mailing list. This was a pivotal moment in the history of bitcoin because the trading name had been set.
Satoshi mined the first 50 bitcoins. Later this came to be known as the Genesis block, or the first block in a blockchain. Mining into the block is the trail for verification of bitcoin transactions. Later that month the first transaction took place between Satoshi Nakamoto and Hal Finney. This piece of history made Hal Finney the second person to own bitcoins.
Bitcoin received an equivalent value in traditional currencies. The New Liberty Standard established the value of a dollar at 1,309 bitcoins. The equation was derived so as to include the cost of electricity necessary to run the computer that created the bitcoins in the first place.
A programmer living in Florida named Laslo Hanyecz send 10,000 bitcoins to a volunteer in the UK who spent about $25 to order two pizzas from Papa John’s. Today that transaction is valued at $2,774,244 and stands as a major event in bitcoin history.
Hackers installed a bug into the blockchain. It allowed 184 billion bitcoins to be made and released. This was precisely 183,979 billion more bitcoins than the 21 million limit set by Satoshi. The value of the currency promptly fell through the floor as all confidence in bitcoin was lost.
Bitcoin was under the spotlight after the hacking as multiple issues emerged. An inter-government group published a report on money laundering using new payment methods. It suggested bitcoin could help people finance terrorist groups, amongst other illegal financial activities.
The market cap first exceeded $1 Million. This caused a surge in value of the virtual currency to $50 per bitcoin. It was based on the number of bitcoins in circulation at the time.
An illicit online marketplace called Silk Road was using bitcoin as a way to buy and sell drugs online. The use of bitcoin permitted anonymity in the transactions which took place.
The first major bitcoin theft took place. The founder of forum.bitcoin.com reported 25,000 bitcoins had been stolen from his electronic digital wallet. This major security breach caused the value of the currency to plummet from $17.51 to $0.01 per bitcoin. This caused the second major loss of confidence, in bitcoin history.
In an effort to regulate bitcoin, the world’s first guidance report for using or exchanging virtual currencies was issued, It had been prepared by the US Financial Crimes Enforcement Network.
In the same month the total value of the bitcoin market surpassed $1 billion.
In an landmark US Court Case it was declared that bitcoin could be used as money. In the case against Trendon Shavers, a US Federal judge noted that bitcoin “can be used to purchase goods or services”. Meanwhile, Bloomberg began testing bitcoin data on its terminals giving it further credibility and legitimacy.
Bitcoin soared to a value of $700 as the US held its first Senate hearing on bitcoin. Ben Bernake, Chairman of the Federal Reserve gave bitcoin his blessing. He stated that “bitcoin may hold long-term promise, particularly if the innovations promote a faster, more secure and more efficient payment system”.
Bitcoin was banned in China. The Peoples Bank of China declared that bitcoin did not have the same legal status as real currency. China was already the world’s largest bitcoin trader with more than 80% of global transactions being processed through Chinese terminals.
The UK Government exempted bitcoin from VAT. Her Majesty’s Revenue and Customs classified bitcoin as assets or private money. This mean’t that no VAT would be charged on the mining or exchange of bitcoin. This was a very progressive move towards using virtual currency.
The US Government auctioned off Silk Road bitcoins. 29,000 bitcoins seized by the US Government from the illegal online marketplace were auctioned off. This move marked a growing institutional understanding in the use of bitcoin. The use of the bitcoin blockchain means that the identity of users can often be established, which is how the government was able to seize the bitcoins.
First Bitcoin Investment Fund. Global Advisors launched the world’s first regulated bitcoin investment fund. This enabled investors to get involved through an intermediary fund.
UK Chancellor of the Exchequer purchases £20 worth of bitcoin. ($29) An act which showed confidence in using bitcoin.
The first bitcoin transaction was executed on a regulated exchange.
Microsoft began accepting bitcoin payments for its services.
Coinbase’s $75 million dollar funding gained a minority investor, the New York Stock Exchange. Its aims are to help bring transparency, security and confidence to bitcoin.
The UK Treasury announced its results on the call for information on Digital Currency.
Bitcoin value increases during 2016 from $450 to $970.
On 27th October Netbet, a UK online casino announced that their customers would now be able to use bitcoin for credits and debits to their accounts using Neteller and Paysafe transfer methods. Online casinos are becoming very popular and as many countries impose currency restrictions to prevent foreign gambling, bitcoin is being increasingly seen as a way to evade them.
Where will the history go next?
The History may not be complete because the value of bitcoin is predicted to break the $1000 barrier early in 2017. Indeed some predicted the barrier would be broken by the end of 2016, it came very close. See our bitcoin currency converter where you can track it against all the major currencies of the world.
When bitcoin was designed they set a limit of 21 million coins which could restrict the currency in the future. There has been much speculation about this and perhaps the easiest way to get around that limit would be to create a second bitcoin currency. Keep up with milestones in bitcoin history on this website.
Update: August 2017 bitcoin is now trading at more than $3500