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Happy Birthday, Bitcoin!

Happy Birthday, Bitcoin!

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By Dotun Ibiwoye,

On Oct. 31, 2008, bitcoin was born worth only a few cents. Fast-forward to 10 years. The total value of bitcoin in circulation now is worth $4,184,582,408 USD as at today. It also dominates 53% of the cryptocurrency market.

When it has flu, fever , migraine or insomnia the other alt coins in the blockchain are directly in trouble. So it must not fall sick.

Ten years ago, as Lehman Brothers was declaring bankruptcy and the global economy was lurching into recession, the idea for an alternative currency was being quietly built online.

Bitcoin is a cryptocurrency, a digital asset premeditated to work as a standard of exchange that uses cryptography to control its creation and management, rather than relying on central government and establishments.

This new form of currency has been constantly evolving over the past decade, developed by an unknown person and maintained by a collective group of the brightest minds in technology.

This new form of money that is created and held digitally, and the most important part  is that no government owns it, or decides its value. The peer-to-peer network community decides it value.

Bitcoin is generated through a complex structure of calculated formulas that run on computers; the network shares a public ledger using blockchain technologies that record, and authenticate, every transaction processed.

There are many questions about Bitcoin, but the most common one to be asked is, “Who established it

it?” That answer is not straightforward, because the identity of the creator remains a mystery.

Satoshi Nakamoto is the only name that everyone knows.. Satoshi Nakamoto has disappeared from the world, or so because he cannot be traced.

On October 31st, 2008, “Bitcoin: A Peer-to-Peer Electronic Cash System” was posted to a cryptography mailing list, published under the name “Satoshi Nakamoto”.

The whitepaper outlined the foundation of how Bitcoin would operate.

On August 18, 2008, an unknown person or entity registered the Bitcoin.org domain.

On January 8th, 2009, the first version of Bitcoin is announced, and shortly thereafter, Bitcoin mining begins.

The mystery that surrounds Satoshi Nakamoto is fitting; privacy was a key value for both Bitcoin, and its users.

Others have tried to claim his mantle – most recently an Australian man named Craig Wright, who has since withdrawn his claim. While we may never know who first created Bitcoin, we do know that the technology he started has left ripples in the financial industry.

A decade has gone by quickly. Yes, its 10 years and exactly 10 years back on this day, 31st October, Satoshi Nakamoto published the Bitcoin White Paper, to a small mailing list of cryptographers. Little did he know that his paper would one day challenge the basics of how money works across the globe. The paper though was loosely written and didn’t have concepts that were revolutionary, but the whole idea of financial freedom gave rise to a new form of money that we call today as Bitcoin.

Bitcoin’s Memory Lane:

The creation of Bitcoin

Such a “technological tour de force as Microsoft founder Bill Gates once said about Bitcoin, is not easily brought to life by even the smartest among us. There are small pieces to the Bitcoin puzzle that led up to the Genesis Block in 2009 that created this historic event.

  • Bitcoin creator Satoshi Nakamoto is the most mysterious part of Bitcoin’s early history. Bitcoin development was rumored to have begun in 2007, but real progress is seen in August of 2008, when Neal Kin, Vladimir Oksman, and Charles Bry file an application for an encryption patent application.
  • On Halloween, October 31, 2008, the official white paper for the design of Bitcoin was published on metzdowd.com. The eight-page outline shows how the Byzantine General’s Theory, previously unsolved for decades, and issues with double spending have been solved by this new Bitcoin invention. Andreas Antonopoulos touts it as the best such research paper he’s ever read, revealing how Bitcoin is not just a currency, but a new technology destined to change the world. Block 0 is mined on January 3, 2009, and Bitcoin is officially invented.

Bitcoin’s first transaction

Nine days later, the first ever transaction in Bitcoin is made between founder Satoshi Nakamoto and cryptographer Hal Finney. This founding father of Bitcoin actually created the first proof of work system even before Bitcoin came to be. Sadly, not long after this historic moment, he was diagnosed with ALS, which would claim his life almost exactly five years later in 2014, at the age of 58.

The Pizza Purchase

The first retail purchase on May 22, 2010 is probably the most famous story in Bitcoin history. Jacksonville, Florida Bitcoin “miner” Laszlo Hanyecz pays 10,000 Bitcoins that he mined himself for two pizzas. At the time, Bitcoin did technically have an exchange rate of a few cents, but who knew that? The purchase price for the pizza was approximately U$25. Selling 10,000 units of unknown computer code for two real pizzas seemed like a great deal at the time.

  • The year of 2010 sees many first for Bitcoin, including the first escrow transaction (October 16), the first mobile transaction (December 8) and the first time Bitcoin’s total value exceeded US$1 million on November 6, with each bitcoin trading for approx. US$0.50. Bitcoin is now a real currency.

Bitcoin Pizza

The Silk Road chapter in Bitcoin history begins in 2011 with the “Dark Web” release of the infamous Silk Road website. Known as the “eBay for drugs,” everything from contract killers to story writers is allegedly marketed here to those who frequent the Internet’s underbelly.

  • In October of 2013, the U.S. authorities shut down Silk Road with the arrest of Ulbricht, and in June of 2015, Ulbricbht is given life in prison for multiple offenses while forfeiting US$183 million. The evolution of the site’s history, along with its founder, is chronicled in Alex Winter’s “Deep Web” documentary, released shortly after Ulbricht is sentenced in New York.

BitPay Launches in May, 2011

The largest merchant services provider in Bitcoin history began in the spring of 2011, offering new services like the first smartphone wallet. BitPay signed many of Bitcoin’s largest partnerships, including WordPress, Newegg, and the St. Petersburg College Football Bowl, thus creating “The Bitcoin Bowl”. Of the over 100k merchants who use bitcoin, over 60,000 work with BitPay, worldwide.

Bitcoin “To the Moon” in late-2013

Bitcoin’s momentum builds in USD value over the first four years, but suddenly rises from US$125 in September of 2013 to over US$1,100 at the end of November, 2013. This is due to many factors, including the introduction of China exchanges and miners to the ecosystem, and the questionable price management and dealings of the world’s largest Bitcoin exchange at the time, Mt. Gox. Market capitalization value goes from US$1.5 Billion to US$13.5 Billion from October 1 to November 30, 2013, according to coinmarketcap.com

Mt. Gox & Bitcoin Price Collapse

Opened under its original owner Jed McCaleb on July 17, 2010, word on the street of Mt. Gox’s instability, mismanagement of funds, and lack of security culminate in the collapse in February of 2014. Lack of consumer confidence in the exchange begins to erode the price from its peak in November. At the time of the collapse, over 850,000 bitcoins are reported by owner Mark Karpeles to have been stolen, attracting Japanese authorities to investigate. Karpeles is arrested in the summer of 2015 in relation to the findings of the investigation.

  • Worldwide, destroying bitcoin market confidence as the price plummets throughout 2014. The USD price reaches a 16-month low in January of 2015 before resuming its habitual upward movement once again. This is yet another example of the forecast of Bitcoin’s demise, only to be proven wrong over 100 times, to date.

Microsoft accepts Bitcoin

It was formally announced on December 11, 2014 that the world’s largest computer retailer, Microsoft, is accepting bitcoin as a form of payment, in association with BitPay, their payment processor. Strangely, a press release was not offered before or during this process, and only after Microsoft users began to see the payment option did word go viral online, forcing a formal announcement by both companies.

NASDAQ agrees to begin using Bitcoin’s Blockchain technology

NASDAQ, the world’s second largest financial stock exchange, agrees to begin trials on a blockchain-backed version of the group’s Private Market for trading pre-IPO company’s shares on June 24, 2015. Working with API developer Chain, NASDAQ’s Private Market will begin issuing, cataloging, and managing transactions of their privately issued shares through blockchain technology.

This agreement expands the scope, perception, and value of Bitcoin’s blockchain technology, inspiring other major financial entities to begin their own research.

 

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Victor Gotevbe Victor Gotevbe is Publisher and Editor in Chief of Diplomatic Watch powered by Conduit Communications Limited, where he serves as CEO.

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