The History of Bitcoinawareness
When you first start out in the world of cryptocurrencies, you may hear people use the words “blockchain” and “Bitcoin” interchangeably. In reality, the two are related to one another, but they’re not synonymous. We’re not going to dive into the differences between Bitcoin and Blockchain, but if you want to learn more about them, check out our posts here and here.
Instead of talking about what Bitcoin and the blockchain are, we’re going to talk about how Bitcoin came to be. Many people who hold the first crypto (Bitcoin) don’t know much about its history, who invented it, or how it all began.
We’re going to tell you all about it, but first, a history lesson.
The Seed is Planted
The origins of Bitcoin can be traced all the way back to 1982.Agesago, right? Still, it’s pretty impressive that renowned computer scientist David Chaum first came up with the idea he labeled ‘e-Cash’ forty years ago.
Chaum detailed his cryptographic idea in a paper titled “Blind Signatures for Untraceable Payments.” In it, he claims that using new forms of cryptography, an automated system used for payments could prevent third parties from viewing the information.
In 1990, Chaum attempted to push his idea out into the world, labeling his creation DigiCash. The purpose of DigiCash - much like Bitcoin - was to create a secure, safe, and untraceable online digital currency. While Chaum’s reputation was enough to attract the interest of venture capital investors, DigiCash never caught on and the project soon went bankrupt.
Roots Take Hold
Eight years later, two ideas for cryptocurrency emerge. Nick Szabo suggested his “Bit Gold,” which would provide a method through which transactions could occur without the need for a third party entity, like a bank or other financial institution. Szabo’s method focused on solving a proof-of-work algorithm to earn bits. If that process sounds familiar, Bitcoin’s blockchain uses a similar method.
In addition to Szabo, Wei Dai put forth a similar idea for digital currency, naming his “b-money.” Another proof-of-work system that focuses on solving mathematical equations, Wei’s method broadcasts all transfers and transactions to the entire network, much like the process used by today’s blockchains.
Unfortunately, neither method came to fruition, and it would be another decade before we would see an attempt at creating and distributing a digital currency.
Bitcoin is Born
The idea for a proof-of-work system that didn’t rely on third party entities wasn’t new in 2008. What was new was the proliferation of the internet, which made spreading the idea much easier than in years prior. In the fall of 2008, a whitepaper titled “Bitcoin: A Peer-to-Peer Electronic Cash System” was published.
Bitcoin’s whitepaper was written by Satoshi Nakamoto - an unknown individual or group of people - putting forth the same ideas as Bitcoin’s predecessors. It would provide a way to perform transactions using proof-of-work consensus and would not require the need for a third party.
In early 2009, the Genesis Block of Bitcoin was mined, creating the first ever Bitcoins. A few weeks later, Nakamoto performed the first Bitcoin transaction, sending well-known developer Hal Finney 10 BTC. Later that year, New Liberty Standard released the first exchange rate for Bitcoin, listing $1 as the equivalent of 1,309.03 BTC.
The Rise of Bitcoin
As word of the crypto began to spread and with a value established by New Liberty Standard, Bitcoin soon became a way to purchase goods and services. One of the most notable purchases took place on the famed “Bitcoin Pizza Day.” In May of 2010, programmer Laszlo Hanyecz spent 10,000 BTC on two pizzas. At the time, Bitcoin’s value was less than a penny. However, many within the industry saw the potential Bitcoin offered.
2010 was a year of many firsts for the original cryptocurrency. Bitcoin broke through the $0.01 barrier for the first time, had a market cap of $1 million for the first time, and had the first mining pool. Things were looking up for the fledgling digital currency.
As Bitcoin continued to make gains into 2011, the cryptocurrency began to receive attention, not all of it good. Bitcoin was the focus of a TIME Magazine, which garnered positive public sentiment. Unfortunately, Gawker released an article that same year focusing on Silk Road, an underground market that frequently used Bitcoin as a form of payment.
Coming Into Its Own
Throughout the next decade, Bitcoin continued to grow and expand, bringing crypto to a wide range of traders, buyers, and sellers. Since its inception, Bitcoin has led the way in a crypto market that has entered new markets.
In 2013, the price of Bitcoin exceeded $1,000 for the first time. Just four years later, the crypto topped $10,000, a 10x explosion in less than half a decade! Today, there are thousands of ways to use Bitcoin as a form of payment. You can use Bitcoin to purchase goods or services from anywhere in the world.
The OG of Crypto
There’s much more to know about the original cryptocurrency. From mining Bitcoin to Bitcoin halvening, this innovative crypto has a lot going for it. To learn more about how Bitcoin works, check out our article that tells you all about Bitcoin.
To quickly and easily add Bitcoin to your crypto wallet, visit one ofBitcoin Depot’s thousands of Bitcoin ATMs.
Oct. 20, 2022