On this day, 11 years ago, the first Bitcoin block (known as the genesis block) was mined by its mysterious creator Satoshi Nakamoto.
Through Block#0, Bitcoin was officially born. Let’s take a look at the crazy ride it’s taken us on throughout its short and remarkable life so far.
On Jan 3 2009, the first Bitcoin block was mined. You can see it on Block Explorer here. The block contains one transaction only, which is the 50 BTC reward Satoshi received for mining it.
Today, 11 years later, there are now more than 18mn bitcoins in existence and the price per Bitcoin has catapulted from almost zero to more than $7,300 today.
That first block also infamously contained a message written into the code. It is a timestamp that simply says:
The Times 03/Jan/2009 Chancellor on brink of second bailout for banks
This was a clear comment on the failure of the existing banks and the need for a radically new peer-to-peer monetary system – Bitcoin.
Who knows how quickly Satoshi thought his invention would catch on or whether it would even reach the success that it has seen so far.
While Bitcoin has given rise to thousands of other cryptocurrencies and sparked interest in central bank-backed digital currencies (CBDCs), there’s nothing quite like Bitcoin.
There are very few people in the industry who can claim to have been in Bitcoin from the early days. It was strictly within the realm of serious internet geeks and zealous computer scientists.
The first year or so of Bitcoin was rather uneventful, as its adoption slowly grew among a tight niche circle of core developers and cypherpunks. But in 2010, a milestone moment would occur.
The first Bitcoin currency exchange wasn’t the most famous (Mt Gox and its rise and fall certainly takes that prize) but it was historic in itself.
The Bitcoin Market was created a little more than a year after Bitcoin’s birth on Feb 6 2010, showing the start of real-world market value for the digital currency.
Probably the first truly memorable moment for Bitcoin was in May 2010, with the infamous payment of two Papa John’s pizzas.
An eye-watering 10,000 bitcoins were exchanged in this transaction, without doubt, making it the most expensive pizza in the world. In today’s prices, that would be some $73mn!
Arguably not one of Bitcoin’s finest moments, it was to become the currency of choice to be used for purchasing illegal products and services on the dark web. In 2011, The Silk Road was created.
Over almost three years (before it was shut down by US authorities and its creator Ross Ulbricht imprisoned for life) millions of dollars’ worth of BTC changed hands facilitating various nefarious deeds from child pornography to sales of cannabis and weapons.
Bitcoin’s stint with the Silk Road solidified its use case as a form of payment and drew more attention to it. However, it also served to tarnish the cryptocurrency’s reputation as a tool for criminals.
Yet, Bitcoin was still a long way from reaching the mainstream. It wasn’t until 2013 that the number one cryptocurrency began turning more heads. Just as with every new wave of adoption, the reason for this was its huge price swing. The value of one BTC soared from $100 to a massive $1,000 in just one month.
This was Bitcoin’s first major bull market marking an all-time high that wouldn’t be reached again for another four years. On Jan 3 2017, the price of Bitcoin went above $1,000 again.
The world’s largest Bitcoin exchange at the time, launched in 2010, rumours of Mt Gox’s lax security and mismanagement of funds were already rampant before the infamous announcement of the hack that shook the Bitcoin world to its very core.
As Mt Gox teetered on the verge of collapse in Feb 2014, its owner Mark Karpeles reported that more than 850,000 Bitcoins had been stolen. Victims of the hack are still waiting nearly six years later to recover their funds. Karpeles was arrested by Japanese authorities in 2015.
Bitcoin once again made the mainstream media but, this time, for all the wrong reasons. The infamous Mt Gox hack would again tarnish Bitcoin’s reputation and destroy market confidence along with the price, which hit a 16-month low in Jan 2015.
While many banks still remained (at least outwardly) vehemently opposed to Bitcoin, others began to see its benefits. In May 2015, NASDAQ adopted blockchain technology to handle transactions.
In September of that same year, JPMorgan, Goldman Sachs, and Bank of America were among nine of the world’s largest banks to enter into a pact to explore blockchain usage in the banking industry.
At the start of 2016, ICAP broker became the first to distribute data on trades through blockchain. And in May, Santander bank began researching blockchain for recording international payments.
2017 has been the most memorable year in Bitcoin’s history to date. This is the year when Bitcoin and cryptocurrencies in general really hit the limelight.
The ICO craze began and the price of Bitcoin soared from just under $1,000 on January 1 to almost $20,000 at the end of the year.
During the same year, we would also see a significant Bitcoin fork creating Bitcoin Cash and the CBoE and CME entering the market with Bitcoin futures products.
They say that what goes up must come down and that was certainly the case with the price of Bitcoin. During the bear market of 2018, BTC would see more than 70% wiped off its value in its worst year on record.
This lead to many people declaring Bitcoin dead and readying themselves to dance on its grave.
From China banning cryptocurrency trading to the US SEC clamping down on ICOs and large tech companies blocking cryptocurrency advertising, 2018 was a savage year for all crypto markets.
While 2019 will fail to go down as the year of the institutions in the Bitcoin space, many landmark events still occurred. We saw huge industry players from ICE Markets’ Bakkt to Fidelity Investments and TDAmeritrade all getting into the market.
We also began to see Bitcoin being talked about at the highest levels, from the Donald Trump tweet to Chinese President Xi Jinping’s endorsement of blockchain technology (and subsequent dismissal of Bitcoin).
Today marks 11 years since Bitcoin’s birth. Growth and adoption may be frustratingly slow for some. Bitcoin has been called many things from a scam to a worthless investment from the likes of Warren Buffet and Jamie Dimon to Peter Schiff.
We may have no certainty about the next 11 years for Bitcoin and whether its network will continue to grow, or if it will ever test the all-time highs of 2017 again.
Yet, despite all the speculation and doubt that surrounds Bitcoin, it is still the world’s best-performing asset since birth with a 9,000,000% rise last decade, making it truly remarkable.
Happy Birthday Bitcoin! Here’s to the next 11 years.
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