The history of Bitcoin: Everything you need to know

Some say Bitcoin was created in response to the global financial crisis in 2008 putting power in the hands of those who suffered from the greed of large banks.

Crypto Banking
Xace
Marketing
April 6, 2020
5 min read

According to Google Trends, interest in Bitcoin has been spreading across the world since 2009. In this post, we will be looking at Bitcoin’s history and giving you the lowdown on everything you need to know.

What is Bitcoin

Bitcoin is regarded as the first established cryptocurrency in the world. However, it should be noted that many attempts at electronic cash had already been made, going right back to computer scientist David Chaum’s “Digicash” developed in the 1980s.

Who created Bitcoin?

The creator of Bitcoin is an anonymous person or possibly a group of people, known as Satoshi Nakamoto.

Why was Bitcoin created?

To truly understand what Bitcoin is and the value it can bring to our world, it is very important to know why it was created in the first place.

Some say Bitcoin was created in response to the global financial crisis in 2008 to put power back in the hands of individuals who suffered from the greed of large banks and central authorities which held all control.

In Bitcoin’s whitepaper – an academic document with details about Bitcoin – Satoshi Nakamoto states that the goal of Bitcoin is to create a new “peer-to-peer electronic cash system” that is completely decentralized with no central authority.

Bitcoin was created so that people could transfer and store money in a secure way. It is essentially a payment and banking system with enhanced privacy.

With bitcoin, nobody can:

  • manipulate the money supply through inflation
  • track the use of money
  • have monopolies on financial services
  • confiscate money from people at will

Bitcoin uses a shared common ledger which can’t be manipulated by dishonest people. Transactions in the ledger can’t ever be falsified or changed. 

But, although Bitcoin was first conceived as a peer-to-peer electronic cash system, it’s become much more than that — it’s now also a popular investment and store of value, like gold. This is especially true in areas with high economic volatility

The important milestones in Bitcoin’s history

2008 

August 18, 2008, the domain name “bitcoin.com” was registered.

A few weeks later, on October 31, 2008, the world as we know it would be changed forever.

On that day, a link to a paper with the title Bitcoin: A Peer-to-Peer Electronic Cash System, was uploaded to a cryptography mailing list.

2009

The bitcoin network was created on January 3, 2009, when the first block of the chain was mined. This was called the genesis block. Embedded in the coinbase of that block was a text alluding to a British news headline from that day referring to bank bailouts.

On January 12, the first Bitcoin transaction was made when Satoshi sent 10 BTC to crypto-activist Hal Finney

And in October, the first exchange rate was established: 1 USD is worth 1,392.33 BTC, according to the New Liberty Standard.

2010

In May 2010 the first Bitcoin purchase was made. Florida-based programmer Laszlo Hanyecz sent 10,000 BTC to a London man in exchange for two pizzas, valued at a total of $25. This still valued a single Bitcoin as a fraction of a penny, but with a purchase made, intrigued parties saw potential in the product. A couple of months later, Bitcoin's value finally broke the penny threshold.

The first Bitcoin exchanges popped up in 2010. Bitcoin Market in February and Mt. Gox in July. Slush, the first mining pool, also mined Bitcoin successfully for the first time that year. Mining pools are where several miners combine resources to get Bitcoin. By November, the market cap for Bitcoin surpassed $1 million for the first time.

Not that it was all ups for Bitcoin. Someone spotted a vulnerability in Bitcoin's protocol in October that allowed for transactions without proper verification and exploited it, generating 184 billion BTC. The transaction was soon erased, and the vulnerability fixed.

2011

In February 2011 a major milestone occurred: 1 Bitcoin was worth $1 for the first time.

TIME Magazine published an article on Bitcoin for the first time, but the same year there was also an article on Gawker detailing Silk Road, the dark web drug market where Bitcoin was frequently used as payment. The publicity got people talking, and by June, Bitcoin was worth over $30. Soon after, it crashed back down to about $10.

Also, in June, Mt. Gox dealt with a serious security breach that compromised tens of thousands of accounts and their Bitcoins. It would not be the first security issue Mt. Gox would deal with.

Still, Bitcoin was becoming an entity that more and more of the public knew about and interest in the cryptocurrency grew. This led to a rise in altcoins, other forms of cryptocurrency whose developers were either trying to improve upon Bitcoin or had created the digital coin for a different purpose. 2011 was the year Litecoin debuted.

2012

Bitcoin was on its way to becoming the world's top digital coin, crossing the $100 threshold in April.

In September, The Bitcoin Foundation was formed to standardize the technology.

2013

Bitcoin's price saw its share of ups and downs in 2013, but it passed a value of $1,000 for the first time and was becoming the most recognizable and successful wallet and exchange available. Cypriots sought financial refuge in Bitcoin and the Darknet’s use of Bitcoin was also exposed and confronted.

2014-16

In January 2014 Bitcoin fell below $1,000 and struggled below the key level for a few years, at a time where a new dawn of blockchain technology was just getting started with the likes of Ethereum. During this period, Crypto exchange Mt. Gox went bankrupt and shut down. Bitcoin rose and fell somewhat, while failing to reach its high. Bitcoin also gets front page coverage from the Economist, featured as “the Trust Machine”

2017

This was Bitcoin’s biggest and busiest year when Japan became the first nation to formally recognise Bitcoin as legal tender.

After spending 2016 desperately trying to claw its way back up, 2017 was when it finally reached and passed the $1,000 mark. It kept ascending. By June 2017, Bitcoin was worth over $3,000.

Even so, some Bitcoin users were frustrated with the network. The rising number of Bitcoin miners meant higher fees and more time spent processing transactions, leading some to want an increase in block size. In August 2017, this led to Bitcoin Cash (BCH) being created via a fork in the network. 

Still, for the remainder of 2017 Bitcoin was on an upswing. By October, it was topping $6,000. It ended November at nearly $10,000, and by the end of December Bitcoin hit a peak of $19,783. More and more people and companies began chasing the trend as the price just kept rising. Unsurprisingly, it wouldn't continue that heady growth. 

2018

2018 was a tough year for Bitcoin users, especially ones who held on assuming the price would keep ascending. Many sold their Bitcoins while they could, and the price steadily dropped all year. 

2019

As of September 2019, there were 5,457 Bitcoin ATMs worldwide. In August of that year, the countries with highest number of Bitcoin ATMs were the United States, Canada, the United Kingdom, Austria, and Spain.  

On October 31, bitcoin’s 11th anniversary, the world’s first cryptocurrency reached a major milestone – $1 billion in cumulative transaction fees.

2020 

The Bitcoin network has surpassed 500 million transactions since going live over 11 years ago.

It has also been predicted by a German bank that the Bitcoin price will increase exponentially before landing on the $90,000 mark in 2020.

The future of Bitcoin

Few transformative technologies have captured the public’s interest — and imagination — as quickly as Bitcoin. 

Hal Finney, the computer developer who was the recipient of the world’s first Bitcoin transaction, said: “the computer can be used as a tool to liberate and protect people, rather than to control them.” Bitcoin is the world’s first global currency that harnesses the power of computers — and humankind’s innate need to innovate — to enable worldwide economic freedom.

We’re looking forward to seeing what the future has in store!



Similar Payment Articles

Online Payments
Oct 26, 2020
2 min read

How to pay remote workers based abroad

When it comes to paying remote workers who are based abroad, things get a little tricky.
Xace
Marketing
Read More
Malta
Oct 21, 2020
2 min read

Malta's cryptocurrency vs banking paradox

Despite gaining the epithet ‘Bitcoin island’, many firms have been surprised to discover that Maltese banks are far from friendly towards crypto activity.
Xace
Marketing
Read More
Online Payments
Sep 21, 2020
5 min read

What is a payment processor for gambling?

A payment processor or payment service provider (PSP) is a service implemented by a merchant to process all online payments made by debit card or credit card.
Xace
Marketing
Read More
Banking for Gambling
Sep 15, 2020
2 min read

Malta Online Gaming Statistics 2020

Malta online gaming statistics are impressive. The online gaming industry in Malta is one of the fastest-growing industries locally
Xace
Marketing
Read More
Payment Accounts
Sep 3, 2020
5 min read

Tether: Everything you need to know about the history of USDT

The history of Tether (USDT) is long and complicated. It grew because it provided a much-needed stable option for exchanges and traders.
Xace
Marketing
Read More
Online Payments
Aug 28, 2020
5 min read

5 ways your business can send and receive money internationally

Small businesses and freelancers have long complained about the costs of sending and receiving money from abroad.
Xace
Marketing
Read More
Crypto Banking
Aug 11, 2020
2 min read

The History of Ethereum

Ethereum is the second most popular cryptocurrency by market cap known for smart contracts and decentralised apps.
Xace
Marketing
Read More
Banking for Gambling
Jul 28, 2020
5 min read

UK Online Gaming Statistics 2020

UK online gaming statistics 2020 make for impressive viewing. It’s estimated that there are around 20 million people in the UK who play video games.
Xace
Marketing
Read More
Banking for Gambling
Jul 8, 2020
5 min read

10 ways you can monetise your video game

There is now now a greater variety of ways that you can monetise your games. In this article, we look at 10 ways you can monetise your video game. 
Xace
Marketing
Read More
Esports Banking
May 15, 2020
2 min read

4 ways to make money in Esports

If you’re interested in trying to make money from the Esports sector, it’s first useful to understand the financial side of the business.
Xace
Marketing
Read More
Online Payments
Jun 1, 2020
2 min read

7 reasons to use a virtual debit card

Unlike the plastic rectangles you carry in your purse or wallet, virtual debit cards exist only in a digital form on your phone or online portal. 
Xace
Marketing
Read More
Online Payments
Mar 30, 2020
5 min read

What is a payment processor?

When comparing payment gateways the first thing that you should look at is pricing. Then consider whether the payment gateway will grow your business.
Xace
Marketing
Read More
Banking for Gambling
Mar 23, 2020
10 min read

How to improve your bank account, brokerage & payment gateways for Casinos & Bitcoin

Using a Xace digital bank account & our industry standard ID to manage your casino payments and compliance ecosystem, with industry low fees and settlement
Xace
Marketing
Read More
Online Payments
Mar 16, 2020
5 min read

What are payment institutions?

What are ‘Payment Institutions’ and how are they driving the finance revolution?
Xace
Marketing
Read More
Online Payments
Mar 10, 2020
2 min read

What are SEPA payments?

SEPA stands for the Single Euro Payments Area - a payment method introduced by the European Union.
Xace
Marketing
Read More

About us

Our entire platform has been built to give our customers a wide range of payment options, across a wide range of sectors.
Read more

Have a question?

We have a dedicated FAQ section, full resources section, and, if that doesn’t answer your question our support team are on hand to help.
Read more
For questions relating to active accounts, please log in and access the messaging centre, available 24/7.

Join Xace and simplify the way you manage your money for both business and personal accounts.

Need help? Contact Support

Support