I read bitcoin came out in 2009. I first heard of bitcoin back in 2011 when someone mentioned it to me. They told me it would get big. I don't recall the exact price at the time but i believe it was 10 dollars the max i believe. I recall reading a bit of it and thought this is junk because to me it was like some useless coin.
The low price in 2011 was around $0.30 (in the beginning of January 2011).
The high price in 2011 was around $31 (June 8th and 9th 2011).
So if you heard about it when it was near $10, then that was either June 2 or sometime in the month of August.
So i would like to know this. Let say i would buy bitcoins back then. Lets just say i bought 100 of them for 1000 dollars. I most likely would not spending 1000 dollars on it but lets just say i did. Now if it was 1 dollar each, i definitely would buy at least 100 dollars worth.
Lets pretend you watched the price until November 17 through 19. At that time the price dipped to $2. You could have bought 100 of them for $200.
Now i want to know around 2011, how hard/easy was it to buy bitcoins?
You'd have had a few options.
There was an IRC channel where you could find people that were selling their bitcoins. In that case you'd have needed to make payment arrangements that you could both trust.
Another option was to figure out how to get money transferred to MtGox. Then you could have bought the bitcoins there. I don't recall exactly what deposit options MtGox offered in 2011. Whatever they were, they weren't difficult, they'd just take a little effort. My best guess is that MtGox was accepting Dwolla at the time.
Did any bitcoin wallets even exist back then?
Yes.
The Bitcoin Core wallet has existed for as long as Bitcoin has existed. The blockchain was MUCH smaller back then, so synchronization didn't take very long and it didn't use up much disk space.
If you waited until November to buy the Bitcoins (when they were $2), then you also would have had both MultiBit (released in September 2011) and Electrum (released the first week of November 2011) to choose from.
I assume everything was kept on the exchanges?
There was really only one "exchange" where you could keep your bitcoins at that time, MtGox. MOST people were not yet using MtGox to store their bitcoins, but that would have been an option if you wanted to. That early on though, most people were still using Bitoin Core (it was called Bitcoin-Qt back then).
The one main exchange i heard of is Mx gov and that site that hacked.
MtGox, not MxGov.
It did not shut down until then end of 2013.
Is that the exchange most Americans uses back then to buy bitcoin?
There were many people using MtGox to buy and sell their bitcoins back then, however there was also a lot of direct trading between individuals AND it was pretty easy to mine bitcoins with a decent gaming computer (or anything with a good graphics card in it).
Was it as easy as confirming your bank account and then you buy via ACH transfer?
I don't think MtGox ever offered ACH transfer. I think the options were generally limited to third party money transfer services (such as Dwolla) and a "wire transfer" which is a "bank transfer" but is different than ACH. Wire transfer is a bit more complicated to do, and typically has fees associated.
So basically any bitcoin you bought would be in your exchange account right?
If you wanted to leave them at MtGox, you could, but it was pretty easy to run Bitcoin-Qt and to just transfer the bitcoins to your wallet. Paper wallets were common back then as well. Also "brain wallets" caught on for a bit. Additionally, after September you could buy special pre-printed "paper wallets" inside novelty metallic coins called Casacius Coins.
Then if you want to sell, you just sell it just like that? Was it pretty easy to sell bitcoin back then?
About as easy as it was to buy. You could sell at MtGox, or you could find a buyer to exchange with directly.
Were there people that traded bitcoin or was there no demand for that?
There was some demand. Nothing like it is today, and it was a bit more risky since there weren't many good third party services to facilitate the transaction.
Now we all hear about how if we bought a lot of bitcoin when it was less than 1 dollar each, we all have lot of money. Now let say you bought 1000 bitcoin at 10 cents each or something like that. How long was bitcoin 10 cents?
When bitcoin was $0.10, it was pretty easy to mine. You *could* buy it if you wanted to, but it was probably easier to just mine it for most people.
Bitcoin was around $0.10 for most of the month of October 2010.
And the other thing is this. Lets just say you spent $1000 and bought 1000 bitcoin when it was 1 dollar each. What percentage do you think people who bought 1000 bitcoin at 1 dollar each probably sell the bitcoin when it hits 10 dollars? Or 100 dollars? Obviously when it hit 500 dollars, im sure lot of people sold it? Thus im sure there probably were lot of ppl that had 1000+ bitcoin due to buying it for like 10 cents or even less?
Correct. It isn't enough to just buy it when it was cheap. You also need to decide to keep it instead of spending it when it is worth more.
On December 4 of 2013 the exchange rate reached nearly $1300. Over the next 17 days the exchange rate continuously dropped until it was reduced to less than half of that at only $460 on December 18. It briefly bounced back up to $900 in the first week of January, and then began a very long slid down over then next 12 months to a bit less than $200.
How many people that watched it just continuously go down, down, down, week after week, month after month, would have continued to hold on to all those bitcoins, without any way of knowing if it was ever going to go back up?
Most importantly, what were the names of the bitcoin exchanges or sites most Americans used?
In 2011? MtGox. That was pretty much the only exchange available at the time.
And say you did bought 1000 bitcoin. Well, wouldn't there be a very high chance the mx gov hack thing... your bitcoin was probably there?
Many people knew better than to keep their bitcoins on an exchange, but yes for those that didn't know better there was a very good chance that they may have been holding most of their bitcoins at MtGox when it shut down.
Or were there wallets created later on around then?
Wallets have always existed. By the time the MtGox disaster was clear (between December 2013 and February 2014), there were MANY alternative wallets and exchanges.
When exactly were the bitcoin wallets created like those armory, blockchain etc?
The earliest alternative wallets that became popular were MultiBit and Electrum (late 2011). Over the next 2 years there was an explosion of wallet, services, exchanges, and businesses that accepted bitcoin as payment.
Obviously now its easy to buy/sell bitcoin. But even if you bought say 100 or 1000 bitcoin back then for like 10 or 100 or 1000 dollars, what are the chances your bitcoin could be lost to due to the mx gov or anything else similar to that?
Many people knew better than to keep their bitcoins on an exchange, but for those that didn't know better there was a very good chance that they may have been holding most of their bitcoins at MtGox when it shut down. There were also MANY scams and/or hacks between 2011 and 2013 that wiped out peoples bitcoins that they were storing with (or sending to) various services.
And of course you have to factor how many people would have sold their bitcoin if it went up very high. For example if you buy 1000 bitcoin for 100 dollars and prices go very high, my thinking would be no point of selling it if price can't go a lot higher etc. But say i bought 1000 bitcoin for 1000 dollars. Well 1000 dollars is not exactly chump change. But 100 dollars isn't that much etc. Do people here get my logic? Like hey its only 100 dollars vs 1000 dollars. And of course you have to factor how many people want to lock in their profits.
Correct. It isn't enough to just buy it when it was cheap. You also need to decide to keep it instead of spending it when it is worth more.
On December 4 of 2013 the exchange rate reached nearly $1300. Over the next 17 days the exchange rate continuously dropped until it was reduced to less than half of that at only $460 on December 18. It briefly bounced back up to $900 in the first week of January, and then began a very long slid down over then next 12 months to a bit less than $200.
How many people that watched it just continuously go down, down, down, week after week, month after month, would have continued to hold on to all those bitcoins, without any way of knowing if it was ever going to go back up?
Im also wondering there must be quite a bit of people that might have 100+ btc stored somewhere but either their hard drive no longer work or they forgot their password to their wallet or something similar? I mean if a guy bought 5000 btc for 27 dollars... i mean surely someone bought 10000 btc for 54 dollars right? I mean there might be even people that bought like 20000 btc for 100 dollars or so when bitcoin just came out? But those that eventually sold it, im wondering how frustrated they would been because 20000 btc now would be a lot of money etc.
When bitcoin wasn't worth very much money, many people weren't careful with it. If you mined a few hundred bitcoins for FREE with your computer, and didn't have anywhere to use them, and they were selling for thousands of bitcoins per dollar (hundreds per penny) then accidentally (or intentionally) deleting the wallet or failing to create a backup and having your computer die were no big deal.
In 2010, there was a guy that paid 20000 bitcoins for 2 pizzas.
