Bitcoin history remains to be an interesting topic among cryptocurrency users. There have been contradicting claims on the identity of the inventor of Bitcoin, making it challenging to understand the history of Bitcoin. This guide takes a dive into all these claims to set things straight and let you know the facts.
Bitcoin was the first cryptocurrency, invented by Satoshi Nakamoto in October 2008. He explained the key concepts on how Bitcoin would work through his whitepaper ‘Bitcoin: A Peer-to-Peer Electronic Cash System’ published on a cryptography mailing list. Nakamoto described Bitcoin as a peer-to-peer electronic cash system that could allow direct sending of online payments from one party to another, without intermediaries.
In January 2009, Bitcoin was launched as an open-source software and Satoshi Nakamoto mined the first 50 Bitcoins. This block came to be known as the Genesis Block among crypto users. The block triggered the interest of some of the earliest miners and has made Bitcoin the most famous cryptocurrency. However, the Bitcoin origin country is still a mystery since the inventor’s real identity is yet to be known.
Satoshi Nakamoto is the pseudonymous person or group of people that invented Bitcoin. His identity has remained a mystery all along, with some notable personalities like California-based computer engineer, Dorian Satoshi Nakamoto, doubted to be one of the inventors of Bitcoin. He however vehemently refuted the claims, saying he didn’t even know about Bitcoin until in 2014 when his son told him about it.
Nakamoto was the first to find a solution to the problem that had long prevented cryptocurrency’s adoption. He introduced double-spending in Bitcoin, unlike in fiat currencies, through the blockchain verification system. Satoshi Nakamoto was actively involved in creating Bitcoin and its blockchain until around 2010 when he disappeared from the cryptocurrency scene.
Bitcoin has witnessed a significant development leading it to evolve into a globally-recognized, decentralized digital currency.
Initially, Bitcoin was characterized by a small community of enthusiasts who recognized its potential. Mining played a crucial role in this phase and was the main method of acquiring new Bitcoins and verifying transactions.
During this period, Bitcoin mining was easy and could be done using personal computers. The mining complexity grew over time and led to the emergence of specialized hardware known as ASICs (Application-Specific Integrated Circuits). These circuits brought a significant improvement in mining capabilities, surpassing regular central processing units (CPUs), graphics processing units (GPUs), and field programmable gate arrays (FPGAs).
After Bitcoin was launched, miners would be rewarded with 50 Bitcoins for every block successfully mined.
The rewards have however been capped over the years through Bitcoin halving. Block rewards are split into two, and it normally occurs after every successful mining of 210,000 blocks (estimated to occur every four years). The mining rewards have so far been recorded as 25 BTC, 12.5 BTC, and 6.25 BTC for the quadrennial periods between 2012, 2016, and 2020 respectively.
Namecoin forked out of Bitcoin in 2011 as a decentralized domain name system (DNS) and was the first altcoin ever recorded. However, it didn’t take off since it wasn’t easy to use, and some of its developers lost track of the plot along the way. It took another two years to have other altcoins developed and listed on marketplaces. Notable examples include Litecoin and Ripple, invented in April and August 2013. Since the introduction of altcoins, Bitcoin’s role was strengthened since they had to use Bitcoin as a payment medium.
The Bitcoin software has gone through a number of upgrades since its launch. In November 2011, Bitcoin upgraded to Bitcoin-Qt for all Bitcoin forks, with a faster block download speed, a different database type, better wallet encryption, and a new front-end interface. Bitcoin renamed its main blockchain in March 2014 to what’s currently known as the Bitcoin Core and is continually being upgraded over time. The software provides the necessary tools for users on the main Bitcoin blockchain and serves as the go-to software for individuals engaging with the Bitcoin network, enabling them to create nodes, conduct transactions, store coins, and carry out various operations.
To maintain the integrity, principles, and safety of Bitcoin, proposed upgrades from Bitcoin Core developers undergo a peer-to-peer review, ensuring adherence to Bitcoin’s ethical practices. On successful peer review of the proposed changes, the Bitcoin network maintainers are tasked with implementing them within the Bitcoin Core. Currently, Wladimir van der Laan leads the team of Bitcoin Core maintainers, including Samuel Dobson, Michael Ford, Marco Falke, Jonas Schnelli, and Peter Wuille.
In Bitcoin’s initial years, there were limited options to purchase cryptocurrency. Users often had to trade on unregulated cryptocurrency exchanges, and unfortunately, several exchanges fell victim to hacking incidents – the 2014 Mt. Gox case being the most famous example in Bitcoin history. There have been improvements recently, and most of the leading crypto exchanges like Coinbase and Bitstamp adhere to laws within their respective jurisdictions. They have spearheaded the development of secure processes to ensure users feel safe and secure whenever transacting on the platforms. The history of early crypto exchanges serves as a reminder, emphasizing the need for thorough research before transacting on a crypto exchange.
Bitcoin forks are divided into two, soft forks and hard forks. A soft fork refers to a software upgrade of an existing blockchain protocol. On the other hand, a hard fork is a blockchain protocol change leading to the formation of two variations of the original coin. Bitcoin has undergone a series of hard forks, including Bitcoin XT (2014-15), Bitcoin Classic (2016-date), Bitcoin Unlimited (2016), Bitcoin Cash (2017-date), Bitcoin Gold (2017-date), and Bitcoin SV (2018-date).
Bitcoin was the first cryptocurrency to develop a public blockchain before Vitalik Buterin, a Russian-Canadian programmer, developed the Ethereum blockchain. Buterin allowed the creation of self-executing smart contracts on the Ethereum blockchain, which never had the need for intermediaries.
With the introduction of smart contracts, developers began to create new blockchain platforms that could be used beyond just cryptocurrencies. Some of the blockchains that came up as a result include Ripple, Litecoin, Solana, and Avalanche, among others.
The Bitcoin Foundation was formed as a nonprofit organization in 2012 and is based in Washington, D.C. Peter Vessenes served as the first board chairman and Gavin Andresen as the chief scientist. Andresen was rewarded with a salary funded by the foundation. On its formation, the foundation’s main objective was to change the public’s perception that Bitcoin was a fraud. Besides, the Bitcoin Foundation aimed to positively influence the regulation and policies associated with cryptocurrencies by educating lawmakers in the crypto ecosystem.
Before the foundation’s launch, Bitcoin had come under immense pressure and criticism. The loss of Bitcoins worth $250,000 from Bitfloor led senators Charles Schumer and Joe Manchin of the US to raise the alarm over Bitcoin’s role in the newly launched underground website, Silk Road. The foundation’s board voted Bruce Fenton as an executive director in 2015. Currently, Brock Pierce heads the Bitcoin Foundation’s board of directors and is deputized by Bobby Lee.
The first event that triggered Bitcoin popularity was when a Florida-based programmer and one-time Bitcoin Core contributor, Laszlo Hanyecz, purchased two Papa John’s pizzas worth $25 each for 10,000 Bitcoins on May 22nd, 2010. A British man, Jeremy Sturdivant, on the BitcoinTalk forum offered to buy Hanyecz the two pizzas in exchange for the 10,000 Bitcoins, making it the first use case of Bitcoin, commercially. To date, Bitcoin has traded several million times, with the Silk Road case being among the largest transactions – nearly 10 million Bitcoins were traded during its existence.
The crypto world now officially recognizes and celebrates May 22nd as Bitcoin Pizza Day. During the commemoration, crypto enthusiasts raise a slice of pizza to symbolize Hanyecz’s infamous hunger pangs that led to the official commercial adoption of Bitcoin.
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Satoshi Nakamoto is thought to be the one who invented Bitcoin, as published in the ‘Bitcoin: A Peer-to-Peer Electronic Cash System’ whitepaper. However, he remains a mystery to date since his real identity has never been revealed.
The price of Bitcoin, when it started, was $0 per Bitcoin. However, a Finnish computer science student going by the alias Sirius gave Bitcoin a monetary value in 2009 when he sold 5,050 Bitcoins at $0.0009 each.
Bitcoin Pizza Day is a day commemorated by Bitcoin enthusiasts annually on May 22nd as a reminder of the first publicly-known commercial event that triggered Bitcoin’s popularity, when Florida-based programmer, Laszlo Hanyecz, bought two papa John’s pizzas for 10,000 Bitcoins.
The Bitcoin origin country remains a mystery since the inventor of Bitcoin did not reveal their identity when he launched Bitcoin.
Apr 10, 2024
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