The story of Bitcoin sounds like a Hollywood Blockbuster. From the dusty streets of some forsaken town, Bitcoin was merely a whisper but through persistence it rose from nothing to become everyone’s something. All eyes are on Bitcoin, following its every move – whether it’s going up or down. We take a look back at Bitcoin’s journey to become the star it is today.
Are you aware that the concept behind Bitcoin actually predates Bitcoin itself? Yes. Prior to its launch, David Chaum and Stefan Brands started with the eCash protocol concept and afterwards Adam Back came up with the HashCash proposal. Later on, Wei Dai came up with b-Monday and Nick Szabo with bit gold. Nick Szabo’s concept remains relevant today as it spoke of a “collectible market based mechanism for inflation control”. He suggested a Byzantine fault-tolerant asset registry that could be used to keep and transfer various proof-of-work solutions. He suggested the use of HashCash for its algorithm. It is said that this model was what Bitcoin’s creator, Satoshi Nakamoto used to build the Cryptocurrency on. Another historic figure in the Cryptocurrency world is Hal Finney who created reusable power of work or RPOW. The Bitcoin.org domain was first registered in 2008, then later that year, Nakamoto published a paper titled Bitcoin: A Peer-to-Peer Electronic Cash System.
Ever since its creation, there has been wide speculation around who the real Satoshi Nakamoto is. He or she has never revealed themselves to the public and it remains the biggest mystery in the crypto world. Some speculate it could be Wei Dai or Hal Finney but this has long been denied. Satoshi described Bitcoin as a peer-to-peer network that worked on open source coding. The genesis block was used to mine the first Bitcoins in 2009. Hal Finney was the first person, besides Nakamoto to download the Bitcoin software and as a reward he received 10 x Bitcoins, as he was the first person to do a Bitcoin transaction. Upon deciding to remain a ghost in the crypto world, Nakamoto gave over the reins of the coin to a developer named Gavin Andresen. He lead the Bitcoin Foundation, which is the closest to a face Bitcoin has ever been given. Bitcoin was used the first time to buy two pizzas from Papa John’s. At that stage it cost 10 000 BTC.
Ups and downs
The first technical difficulty the Bitcoin network experienced was late in 2010 when a bug was detected. The bug allowed certain users to bypass the economic restrictions of Bitcoin and in doing so, create an unlimited amount of Bitcoins. The Bitcoin transaction log did not verify the Bitcoin transactions. Fortunately, the bug could be fixed but what is interesting is that Bitcoin was then forked and an updated version was created. This is important when one looks at the number of times the Bitcoin network was forked over the past year (2017).
Bitcoin has grown significantly since its first release and as the demand for the coin grew, so did the amount of transactions going through the Blockchain. Throughout the years, the Blockchain became slow and the time to perform a transaction became quite long. It was decided to update the software and the Bitcoin network was forked. The great thing about these forks is the so-called fork money or free cash. Those who held Bitcoin at the time of the fork, were rewarded with Bitcoin Cash. This was followed by more fork money namely Bitcoin Gold, Bitcoin Diamond and others.
Another challenge Bitcoin experienced was in 2013 upon the discovery that an illicit drug and weapons website, Silk Road was making use of Bitcoin to buy these illegal goods. The FBI seized 26 000 Bitcoin and arrested owner Ross William Ulbricht. It soon became evident that these types of acts and following bad publicity could have an impact on the price of Bitcoin at the specific time.
One cannot talk about Bitcoin without referring to Mt. Gox. This was the first Bitcoin exchange back in 2011 but due to a major hack, it had to close its doors. This serves as a reminder to always safeguard you private keys.
The Bitcoin giant
The first Bitcoin cost only $0.003. Today it is worth more than $15 000! It made its way up from $110 to $800, in June 2013. In 2015, it reached a record high of $504 and stabilized at around $600 in 2016. 2017 was the year of Bitcoin, as it continued to climb without any signs of slowing down.
The secret of Bitcoin
The secret to Bitcoin lies in the fact that it is open sourced, decentralized and relies on an anonymous ledger. More and more people are adapting the Bitcoin lifestyle on a daily basis and trust in its concept of living in a society that is not regulated by government agencies. Bitcoin preaches of an open society that is aimed at liberating those who are looking for financial independence.
As previously stated, 2017 has truly been a remarkable year for Bitcoin as it increased from $800 to $17 000 but the reason why there is no stopping Bitcoin is due to its innovative and revolutionary Blockchain technology. Trading with Bitcoin is merely one aspect of what makes this crypto so fantastic. With Blockchain technology, one can improve the quality of your life by either keeping sensitive and personal documentation safely stored on the block chain or selling renewable energy or smart tech, the possibilities are endless. The fact that Bitcoin operates on a system that can be implemented in the real world, is the secret to Bitcoin’s success.
In closing, there are many reasons given by media outlets every day why one should not trust Bitcoin and Blockchain technology but at the end of the day, it is important not to put all your eggs into one basket. Diversity is the key.