A Close Look at the History of Bitcoin

A Close Look at the History of Bitcoin

bitcoin historyBefore getting into the history of bitcoin, let’s explain the concept to you. Bitcoin is the most widely used cryptocurrency in the world. For your information, crypto currencies are currencies that are created and managed using cryptography; this feature separates them from the conventional currencies, which rely on central authorities.

The start

There’s a legend, which suggests that the concept is a brainchild of pseudonymous Satoshi Nakamoto. It is believed that Nakamoto created bitcoin based on ideas derived from the famous cypherpunk community. In 2008, the Japanese creator released a paper called “Bitcoin: A Peer to Peer Electronic Cash System”. The paper, which was released to a special cryptography mailing list, talked about a distributed digital currency system in detail. Within a few months of releasing the paper i.e. in January 2009, Nakamoto launched the very first edition of the bitcoin core software. Following the release of this open-source program, the much awaited bitcoin protocol began running. The first 50 BTC were mined by Nakamoto.

By the middle of 2009, a number of other developers besides Satoshi Nakamoto started contributing to this open-source program. The protocol might have been hugely benefited by several innovations preceding it, but it has surely been the most prominent breakthrough in the field of cryptography. That’s the reason why the cypherpunks play such a major role in the history of Bitcoin.

The early years

The path breaking “Bitcoin ecosystem” used to be only a log featuring various bitcoin transactions. It played the role of a collection of online forums where users could communicate with each other and organize transactions. Initially, the concept was not backed by any wallet service. There was also no user interface; the only things users had access to included some raw code and command prompts. As a result of these restrictions, the service only managed to get some highly tech savvy and dedicated people involved. These were people who could organize transactions via online forums and had the ability to use code for initiating those transactions on the block-chain.

The very first commercial transaction using bitcoins occurred in May 2010. It happened when a Florida-based programmer bought a pizza paying 10,000 BTC. This event marked an extremely important step in the history of bitcoin.

Soon, the brains behind Bitcoins started working to come up with a comprehensive market support system. The very first bitcoin exchange started its journey during the first quarter of 2010. The exchange allowed people to get involved in structured trading using bitcoins. Gradually, the currency started becoming popular among a large number of people beyond the expert cryptocurrency crowd. Soon, the user base of the currency started growing rapidly. By the final quarter of 2010, the second bitcoin exchange was also established; it was named Mt. Gox.

The next few years saw Bitcoin becoming more and more mature as a cryptocurrency. The year 2011 saw the initial Bitcoin code undergo some major changes. The entire process took place under the supervision of Nakamoto. However, Satoshi never met or called anyone; he communicated with people through direct messages and on the forums. Later, in April 2011 Nakamoto shifted the charge of this legendary project to Gavin Anderson. Since then, no one has ever heard the name of Nakamoto or has seen him.

As the popularity of the currency started growing, it became a common target of thieves and hackers. For instance, Mt. Gox got hacked in the same year it was established. However, the authorities in charge of these exchanges and databases managed to solve the hacking issues pretty promptly on most occasions.

The growth

The year 2014 saw bitcoin invade mainstream payment systems. A large number of top retailers accepted the currency. Some of the biggest names in that list are Dell, Microsoft, Overstock, Newegg, Tiger Direct, and so on. That’s not all; by the end of the 2014, a subsidiary of the world’s largest online payment system PayPal announced that they will be working to integrate the cryptocurrency on their own platform.

Another major change took place in 2014 when people started looking for other ways of using the technology behind Bitcoin for other purposes. For example, a protocol called Maidsafecoin was formed for enabling distributed file storage. This marks an important stage in the history of bitcoin as it proves the belief of early enthusiasts of the concept true; some proponents of the concept used to claim that the technology of cryptocurrency might form the basis of a new Internet.

The history of Bitcoin has been a truly encouraging journey. Based on the current situation, it can be said that the future is bright for this cryptocurrency.

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