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April 27, 2015, 07:00:24 PM |
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I wrote an article once,
A History of Bitcoin
The biggest thing to hit the global market since the invention of currency is the word “Bitcoin”. What started merely as an alternate electronic payment system soon became the wonder of modern economy. With all the ups and downs of the Bitcoin market, most of us probably don’t know about its history. So let’s look at how it all started.
It All Began with “A Paper”
October 2008
Satoshi Nakamoto (which may be a pseudonym for a group of people) published a paper regarding a breakthrough in electronic currency. The paper contained an outline of a peer-to-peer electronic currency system which uses software code to authenticate and protect transactions. The idea was to remain anonymous from any centralized bank or government treasury.
The Currency of the Times Began
January 2009
As Bitcoin started its journey, many began to voice theories about why it was created in the first place. Many views were brought forth at that time. Most of them stated that it was simply a response to the global financial crisis, which was a vital concern during that period.
Bitcoin for Appetite
May 2010
The bitcoin frenzy started when a user of the online currency posted a photo of pizza, claiming that he bought it using bitcoin. This happened just after the bitcoin marketplace was established. Bitcoin was quite cheap at that time, and the pizza cost that person 10,000 bitcoins.
Safety Concerns
July 2011
Question marks were raised when bitcoin accounts started to become the victim of hacking and theft. People started to think that bitcoins or virtual currencies were just as vulnerable as the hard currency of the period.
Getting Legit, Putting Everything Aside
July 2012
By July 2012, Bitcoin was up and running, but mainly relegated to corners of the Internet. It was largely used in black markets for selling illegal goods. But there were signs of hope as some enterprising groups paved the way for its legitimacy by organizing a trading network for the currency. One of the biggest groups was Coinbase, a Silicon Valley start-up aiming to finance bitcoins.
The Amount Got Bigger and Bigger
April 2013
At the start of 2013, the bitcoin market was skyrocketing and by April, the total market cap of bitcoin passed the billion-dollar mark. This amount paid for any kind of hard currency let alone crypto currency was news. An amount that large turned the bitcoin market from an electronic payment system to a global media sensation.
The main reason behind this huge market surge was the recent economic crisis in the European Union. People were tempted by a currency that was free from any kind of government regulations. But clearly, most of the uses for bitcoin were illicit, including a huge amount of online gambling. And then there was Silk Road, a perfect anonymous marketplace for controlled substances and narcotics.
New Proposal Arrived
July 2013
The Winklevoss twins, who owned nearly 11 million dollars worth of bitcoin, brought a new proposal to the table. They wanted a stock-like system for bitcoin, where any investor could trade bitcoins. The plan was to have an exchange-traded fund to track a basket of stocks, or in this case bitcoins. It was a comprehensive attempt to protect bitcoin and other online currencies from regulatory questions and enforcement actions.
Mt. Gox arrived on the scene as the world’s largest trading exchange for bitcoins. It was registered in the Treasury Department as a money services business and is held to the terms of money-laundering regulations.
Stakes Were High
September 2013
By September 2013, there were many services, like SecondMarket, which provided the bitcoin users with an opportunity to buy shares of red-hot private companies like Twitter. And there was also betting on the future price of bitcoin provided by the Bitcoin Investment Trust.
Silk Road Got Shut Down
October 2013
F.B.I. agents arrested a 29-year-old man named Ross Ulbricht, accusing him of being the mastermind of the Silk Road marketplace. Silk Road, a bitcoin black market that began in 2011, was an underground online marketplace for drug dealers where substances like marijuana, LSD and prescription pills were traded in large amounts.
The anonymous nature of the bitcoin was the main advantage that drug dealers received by using this marketplace. This made it harder for law enforcement agencies to find any trace of this operation, let alone shut it down. But in the end, they were able to shut down the operation.
First Bitcoin A.T.M Opened in Vancouver
November 2013
At one end, the bitcoin community was being threatened by security questions and on the other hand, the world’s first bitcoin ATM was set up at a trendy coffee shop in Vancouver, British Columbia. The ATM used a barcode scanner and hand scanner to confirm identity. Users could transfer funds from a virtual wallet to their smartphone. To prevent money laundering and other fraud, the maximum transfer amount was limited to $1,000 a day.
Regulators Took Bitcoin into Consideration
On November 18 at a Senate hearing, Federal officials indicated the real benefits of the digital currency, despite all the avenues provided for money laundering and illegal activity. It was a clear indication that the bitcoin revolution was beginning to attract the attention of the government.
Value Surpassed $1000
January 2014
At this point bitcoin was beyond anything that Satoshi ever dreamed of, as the market price touched the $1000 mark. The total market price of bitcoins was more than $7 billion. With all the questions hanging on the bitcoin community, bitcoin was running at its own pace and reaching all kinds of landmarks. Specialists predicted the market to touch the $1000 mark and it did.
Market Stabilized Again
March 2014
Although people expected the bitcoin value to rise sky-high in 2014, it faltered again. The price dropped down to the $500 mark. Now the market is back in balance, with bitcoin prices rising ever so slightly and steadily.
Bitcoin has come a long way since it began its journey and it certainly had its difficulties on the way. But that didn’t stop it from establishing a global community. One thing is for certain; with this huge market in the balance, bitcoin will be a part of the global economy and it will make way for a completely new era of digital currency.
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