What started as an idea in 2009 has evolved into a global digital currency. This article explores the compelling story of Bitcoin’s origins, its growth, and its profound impact on money and technology.
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Who Created Bitcoin? #
The creator of Bitcoin is Satoshi Nakamoto. This is the pseudonym used by the author of Bitcoin’s whitepaper in 2008. It’s possible that more than one person is behind this name.
They wished to remain anonymous, likely to avoid repercussions from authorities, as Bitcoin was designed as an alternative to fiat currency. To this day, no one has revealed their true identity.
Nakamoto was active in the online forums of the cypherpunk movement, a group of activists advocating for privacy and personal freedom through cryptography. Nakamoto disappeared once the Bitcoin network could sustain itself without their involvement, and their bitcoin holdings have never been touched.
The Precursors to Bitcoin #
For a long time, researchers grappled with the concept of digital cash. Early attempts, such as eCash, B-money, and Bit Gold, introduced concepts like cryptographic tokens, timestamped ledgers, and decentralized money. However, they failed to create a system that could function entirely without a central coordinator or solve the double-spending problem.
Later, breakthroughs in timestamping and hashing (generating a unique number via an algorithm), combined with the concept of Proof of Work, emerged.
With these building blocks, Nakamoto ultimately succeeded in developing Bitcoin.
Early Adoption #
In the early days of the Bitcoin network, there were only a few participants. In January 2009, the first transaction took place between Nakamoto and Hal Finney, who was involved in Bitcoin’s development. At that time, this small group could mine bitcoin using their personal computers, earning 50 BTC for solving the Proof of Work cryptographic puzzle.
The most famous transaction is the purchase of two pizzas for 10,000 bitcoin, totaling $41. This occurred on May 22, 2010, a date now celebrated as Bitcoin Pizza Day.
Milestones #
In its first years, transactions were conducted according to the whitepaper’s doctrine: peer-to-peer or on small forums. Dedicated trading exchanges emerged relatively quickly, but they struggled with security, liquidity, and other startup issues. These problems lessened as larger exchanges acquired smaller ones.
Nevertheless, this couldn’t prevent the collapse of Mt. Gox in 2014, which at the time handled 70% of all bitcoin trading. This event led to the professionalization of exchanges.
The most significant split from the Bitcoin network resulted in Bitcoin Cash. A dispute among miners over the maximum block size led to the so-called “Blocksize Wars,” which split Bitcoin into two separate blockchains.
Major protocol upgrades included SegWit (2017), the Lightning Network (2018), and Taproot (2021). The Bitcoin blockchain is constantly evolving, adapting to challenges to ensure bitcoin remains a usable asset.
The Future #
The launch of bitcoin exchange-traded funds (ETFs) in 2024 was another major milestone, attracting institutional capital to invest in bitcoin. To say it was a success is an understatement; BlackRock’s bitcoin ETF, IBIT, is even the fastest-growing ETF in history.
The introduction of bitcoin ETFs drastically changed the investment landscape, and the total assets under management in these funds continue to grow. Currently, over €108 billion is invested in these ETFs.
An increasing number of companies are also joining in, adding bitcoin to their strategic reserves. More than one million bitcoin are now on corporate balance sheets. The company Strategy, founded by Michael Saylor, leads the pack with 636,505 bitcoin.
Bitcoin has the potential to become one of the world’s most important assets. It could serve as a global reserve currency alongside gold, and thanks to its scarcity, complete its transition from a niche cryptocurrency to mainstream digital gold.