The first mention of cryptocurrency dates back to 1983year, but the real implementation of the concept of digital assets took place only in 2008. Institutional investors are now actively adding Bitcoin and altcoins to their portfolios. Therefore, it is high time to consider the history of the formation of such a promising industry, to analyze the main stages of its development.
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When Bitcoins appeared
The official date of the appearance of the BTC cryptocurrency is December 31, 2008... It all started with the publication of the article “Bitcoin:A Peer-to-Peer Electronic Cash Systems ". Its author is Satoshi Nakamoto. He detailed the specifics and benefits of protecting digital signatures, direct payments without counterparties. This is the bible of cryptocurrency with a description of Blockchain technology, features of using coins.
Later it became clear that Satoshi Nakamoto isalias. To this day, there is a fierce debate about who is hiding under this nickname. The anonymous developer not only presented theoretical developments, but also put them into practice by launching the first genesis block. On January 12, the first-ever transaction was carried out: developer Hal Finney received 10 BTC coins from Satoshi. In October, the cryptocurrency exchange rate was fixed - $ 1 = 1309.03 BTC.
Who invented Bitcoin and why
There are many versions as to whohiding under the guise of the creator of Bitcoin. Some media outlets even suggest that Satoshi Nakamoto is a whole development team. However, there is no real evidence, only theory. Let's consider the most popular and well-reasoned versions of who created Bitcoin and why. Basically, suspicions fall on fairly well-known persons in the cryptoindustry.
Anonymous who used Blockchain technology forcreating a fully decentralized cryptocurrency. It is the computing power of the network participants that constitutes the infrastructure. In 2008, Bitcoin was launched, at the same time the domain name "bitcoin.org" was acquired and the first wallet for storing cryptocurrency was created. In the early stages, Satoshi Nakamoto took an active part in the development of the project.
In 2010, they became interested in alternative currencyAmerican law enforcement agencies, namely the CIA. However, it turned out to be much more difficult to reach Satosho Nakamoto, because no one knew the real name of this developer. Agents of this department tried to reach the founder of Bitcoin through one of his main assistants. Satoshi received an invitation, but refused to meet with CIA officers.
After this incident, Satoshi Nakamoto disappeared.He didn't get in touch anymore. All the information he provided about himself earlier seems to be fiction. For example, its Japanese origin, because all the documentation was written in very good English, and there was no Japanese translation at all.
Dorian Satoshi Nakamoto
If you try to find a photo of the creatorBitcoin using Google or another search engine, you will be one of the first to see an elderly Japanese person that programmers have hardly ever heard of. Dorian Satoshi Nakamoto himself denies his involvement in the Bitcoin project, and even threatens to sue those who continue to spread false information about him. The main flaw in this theory is that Dorian Nakamoto is on a tight budget, while the true creator of Bitcoin today is a billionaire..
Another contender for the authorship of Bitcoin.Nick Szabo denies any involvement in the creation of cryptocurrency, although he admits that he is well versed in this industry. There is real evidence that he participated in the discussion of such projects even before the advent of Bitcoin. Nick Szabo is one of the most authoritative speakers at various conferences dedicated to cryptocurrency, he also has his own projects.
Sometimes he himself hints that he created Bitcoin and evenprovides evidence. However, the community does not believe in this theory. Craig Wright is well versed in the crypto industry, for example, he was actively mining BTC back in 2009. He is one of the main holders of this asset. The police were also investigating him regarding his involvement in the creation of Bitcoin.
In 2015, Craig Wright's home even hostedsearch, but no evidence was found linking him to Satoshi Nakamoto. However, it is not completely clear what exactly the American law enforcement agencies want to incriminate the creator of Bitcoin, because he did not formally violate any laws. Refusing to meet with the CIA is hard to count as a crime.
Canadian developer of Russian origin -founder of the second largest cryptocurrency by market capitalization, Ethereum. He is public and does not hide from the public. Vitaly Buterin was born in 1994, from early childhood he was interested in exact sciences and computer technologies. Today he is one of the main promoters of Blockchain technology.
Ether is more than just a cryptocurrency.The Canadian programmer has managed to create a decentralized platform on the basis of which new projects can be created. His idea is more ambitious than Bitcoin. Buterin is confident that its development can forever change the financial industry, the work of government agencies. The widespread use of blockchain will allow the liquidation of banks and many regulatory agencies.
The creator of cryptocurrency silver is Litecoin.He also got inspired by Bitcoin and started developing his own projects. The LTC network is an improved version of Bitcoin. Litecoin coins are much easier to mine, but in terms of globality, Charles Lee's project is significantly inferior to the world's first cryptocurrency. The founder of Litecoin does not avoid publicity, but does not strive for fame, he just improves his project. Previously, he worked at Google, and today he collaborates with one of the most famous cryptocurrency exchanges.
Another revolutionary in the world of cryptocurrencies.First, he created the sensational Ripple project, and then took part in the launch of Stellar. Jed McCaleb never limited himself to digital currencies, he launched exchanges, file sharing and other startups. Many promising projects had to be abandoned in order to concentrate on more important ones.
Jed McCaleb is not creating Bitcoin forks, buttruly stand alone products. Ripple is not a cryptocurrency, but a functional system for conducting financial transactions. It is based on Blockchain technology. Stellar is a Ripple-based project after Jack McCaleb left his position as CEO.
This is the creator of the Dash cryptocurrency, whichdiffers from others in complete preservation of anonymity. Evan Duffield has been an active member of the Bitcoin community for a long time, and offers to implement his own developments. The developer did not like the BTC network for too long transaction processing. In addition, he saw real gaps in the issue of anonymity.
The Bitcoin community did not accept Duffield's idea,therefore, he concentrated on creating and developing his own project - Darkcoin, which was later renamed Dash. This network is also built on a peer-to-peer system and other important principles of Bitcoin, but the mining rewards are distributed in a slightly different way. 10% of the money earned is reinvested in the development of new projects, which allows faster infrastructure development and network improvement.
A brief history of cryptocurrency
The digital asset industry has evolved veryfast and dynamic. In 2021, Bitcoin has already hit its all-time high several times. Therefore, now is the time to study in more detail the history of the formation of this industry, to get acquainted with the most important points that influenced the development of cryptocurrency in general.
For the first time the concept of electronic moneywas proposed in 1982 by scientist David Chaum. As a computer scientist, he was actively interested in privacy issues in the digital environment. In the early 1980s, he published an article “Blind Signatures and Untraceable Payments,” in which he detailed the feasibility of using cryptography to create a new automated payment system.
In 1990, Chaum tried to make practicalimplementation of their theoretical developments. A computer scientist founded his company DigiCash in the Netherlands. She was involved in the creation of a secure Internet currency. The scientist's impeccable reputation made it possible to attract investors, but the project did not work. Therefore, in the early 90s, the company filed for bankruptcy.
David Chaum's work was not in vain.In 1997, Adam Back presented his hashcash project, which was based on a proof-of-work consensus algorithm. This is a fairly similar principle that is used in Bitcoin today. However, this project also did not bring significant dividends.
At the end of this year, Wei Dai published an article inwhich exhaustively described the idea of b-money. It was a cryptocurrency with a storage mechanism very similar to Blockchain. The project was also based on the Proof-of-Work algorithm. Transactions within this network were carried out by solving mathematical problems.
At the same time, Nick Szabo presented a similar project,which was called Bit Gold. He tried to launch a payment system that would not require counterparties such as the Central Bank. Solving math problems gave the user signature line items. The last fragment is needed to sign the next transaction. However, both projects were well ahead of their time and failed.
The first projects prior to Bitcoinappeared 2 decades before the launch of this cryptocurrency. We have already talked about the conditions for the emergence of the Satoshi Nakamoto project. Therefore, we will concentrate more on theory. A continuous chain of transactions was formed by hashing; the same PoW was used as an algorithm for reaching consensus.
On January 9, the presentation of the first version took placesoftware for working with Bitcoin, and after another 3 days the debut transfer was made. In October, the cryptocurrency rate was formed in relation to the US dollar. A few months later, Satoshi Nakamoto presented an updated version of the software.
The appearance of the official rate brought Bitcoin closer toto ensure that coins are used as payment. This happened in May 2010, when programmer Lazlo Hanesh transferred $ 10,000 to get 2 pizzas worth $ 25. Of course, the cryptocurrency was priced too cheaply, but such transactions showed its potential. After a couple of months, the BTC rate finally rose to $ 0.01.
The infrastructure continued to develop.In 2010, the first online cryptocurrency exchangers were launched - Bitcoin Market and Mt.Gox. At the same time, the first pool for mining coins was created - Slush. In November, the market capitalization of the project finally surpassed the $ 1 million bar. A month earlier, hackers found a weak spot in the code, resulting in the creation of 184 billion BTC. However, later the vulnerability was fixed and the transaction was canceled.
Breaking the bar of 1 cent, the cryptocurrency ratecontinued to grow. In February 2011, a historic event took place, because the BTC quotes finally caught up with the US dollar. More and more information about Bitcoin began to appear in the media. One of the first articles was published by Time magazine, and then a detailed description of the black market "Silk Road" and the role of Bitcoin in its work appeared on Gawker.
Interest from the press reflected favorablyon the value of the cryptocurrency. It went up to $ 30, but then dropped again to $ 10. In June, the Mt.Gox exchanger was hacked. However, Bitcoins became more and more popular. At this time, the formation of altcoins begins, for example, Charlie Lee launched Litecoin.
If 2011 was marked by variable success for cryptocurrency in general and Bitcoin in particular, then 2012 turned out to be more unambiguous. Already in April, the value of the digital coin BTC exceeded the $ 100 mark.
This year turned out to be unstable and will be remembered for its powerfulfluctuation of quotations. For the first time in its history, the value of Bitcoin crossed the $ 1000 boundary, and this asset has finally become the most recognizable cryptocurrency, for which the status of a blue chip has been entrenched.
This period was marked by a certain pause in history.development of the cryptoindustry. In January 2014, Bitcoin dropped below the $ 1000 mark again. Over the next few years, he will again return to this level and even overcome it. Of the important events, it is worth noting the bankruptcy of one of the first exchanges, Mt. Gox. The site has announced its closure.
Perhaps this is one of the main stages in history.After the imbalance of 2016, the cryptocurrency hit the $ 1000 bar again. Quotes exceeded this level, and in June the coin was worth more than $ 3000. Although there were some discontent too. The popularity of Bitcoin has triggered an increase in the number of miners, which has led to higher transaction fees. On this wave, a hardfork took place in August 2017, as a result of which the Bitcoin Cash cryptocurrency was created.
For most of this year, the costBitcoin grew rapidly. It soon surpassed the $ 6,000 mark. In November, the quotes almost hit the $ 10,000 bar. In December, there was a sensation, because 1 BTC coin was valued at $ 19,783. Naturally, as the price of the cryptocurrency rose, public interest in it grew.
Naturally, the uptrend could not lastforever, so a correction soon began. This year was a period of disappointment, because many investors came to the industry on the wave of hype and wanted to make money, but in the end they only lost their money. As a result, in 2018, everyone was actively selling BTC, as a result of which the price fell inexorably. It dropped below $ 4,000. Mining was rapidly losing its profitability.
On February 7, quotes finally dropped tobottom - $ 3300. However, then the price pushed off and began to grow smoothly. At first, the price fixed at $ 4200, and in April it broke the level of $ 5200. After numerous short-term corrections, Bitcoin will rise in price to $ 8,700. Bullrun continues, first quotes rise to $ 12600, and then break through the level of $ 13689. It is customary for experts to single out several main reasons why the value of the cryptocurrency grew so actively during this period:
- massive adoption of digital assets - institutional investors began to actively invest in Bitcoin, legal cryptocurrency trading normalized in the USA and Switzerland;
- popularization and strengthening of promising altcoins - banks and financial companies began to support Ripple, Ethereum and many other projects with potential for development;
- user-friendly technology - payment for goods and serviceswith the help of cryptocurrency has become more practical. Coins can be transferred from mobile wallets, special cards have appeared, users have finally received a practical interface;
- Google and Facebook have lifted a temporary ban on crypto ads. Mark Zuckerberg even thought about creating his own Libra coin;
- Bitcoin has stabilized - implementation of the protocolSegWit has significantly improved the network bandwidth, and the Lightning Network offloaded miners by an additional 20%. When the rate stabilized, the computing power of the network recovered, more miners appeared;
- trade confrontation between the United States and China - expertsare confident that the upward rally in July is due to the revival of the Asian market. Despite the ban from the authorities, many companies and Chinese citizens continue to invest in Bitcoin.
At the end of August, the main cryptocurrencycorrected at around $ 9500, but then again stepped over the psychological level of $ 10,000. Experts predicted that the coin quotes would be able to gain a foothold at this level, but the situation developed differently. Bitcoin sank significantly, and December closed at all at $ 7750.
This year, the real American races began.Already in January, the cryptocurrency began to get out of the abyss, and in February, Bitcoin finally rose in price to $ 10,000. Then, perhaps, the main blow in history occurred - Black Thursday. On March 12, due to news of the COVID-19 pandemic and a massive lockdown, all financial markets collapsed, Bitcoin also fell in price. In moments, the coin was trading even at $ 3,778.
Then a very rapid growth began.Some analysts even compared it to 2017. Already in December, Bitcoin crossed the important level of $ 20,000. After that, it completely renewed its historical maximum. The cryptocurrency met the New Year with a record $ 35,000. In 2021, the price first went up to $ 50,000, and then it conquered the $ 60,000 bar.
Who is developing Bitcoin now
A single public leader for the main cryptocurrencyno. The identity of Satoshi Nakamoto is still unclear. The community is involved in the development of the network. Each user takes part in voting, influencing important processes. Naturally, the key coin holders carry more weight. First of all, this applies to international mining pools, as well as Bitmain, which develops ASIC devices.
Abnormal growth of cryptocurrency in 2021due to the colossal support from institutional investors. Hedge funds, banks, and financial companies invest in BTC to support the network. Naturally, such support also contributes to the development of the network and the popularization of the crypto industry as a whole.
Where does the money come from when mining
Bitcoin has a fixed supply.In total, there may be 21 million coins in circulation. They are mined gradually. As of the first quarter of 2021, 88% of the cryptocurrency has already been found. Emission is closely intertwined with mining. Users solve complex problems with their computing power, thereby maintaining the health of the network. They are looking for new blocks in which information about transactions is written. For this they receive BTC coins.
Bitcoin is often compared to gold.This is a valid analogy, since BTC coins are an exhaustible resource. It should also be borne in mind that about 4 million BTC are lost forever. This issue structure creates a shortage of the asset, which allows maintaining its high value. The mining reward is the payment for keeping the network up and running.
- Bitcoin is the main cryptocurrency created by anonymous developer Satoshi Nakamoto.
- The first attempts to launch digital money with decentralized governance were made back in the 80s.
- BTC coins are mined during mining, which allows the network to remain operational.
text: Dmitry Konovalov - expert at Cryptos.team