The history of Bitcoin has all the makings of a myth, made up of symbols and mysteries: a cyber-myth made up of pseudonyms, e-mails, discussion forums, websites and hacking.
The details of its creation already constitute a kind of fantasy story. The date of conception is highly symbolic: Bitcoin, a payment protocol aimed at replacing the banking system, was created in 2008, the same year as the global financial crisis following the subprime crisis. Moreover, the identity of its creator, who goes by the pseudonym Satoshi Nakamoto, is still not publicly known; and, even more intriguing, it has disappeared from the web since 2010.
The idea of electronic money in cyberspace is not new: in the late 1980s and early 1990s, with the emergence of the Internet and e-commerce, it seemed self-evident. In particular, it developed within the crypto-anarchist movement (also known as cypherpunk), which opposed government control of information on the web and advocated cryptographic means to remedy it.
Bitcoin follows on from earlier projects by cypherpunks or people influenced by cypherpunk ideas: David Chaum’s Ecash (1989), Adam Back’s Hashcash (1997), Wei Dai’s b-money (1998) and Nick Szabo’s Bitgold (2005). By solving each of the problems faced by these projects, Bitcoin succeeded where they failed.
In August 2008 Satoshi reserved the domain name for the official website: bitcoin.org. On 31 October, he published the Bitcoin white paper, a short 9-page document describing how the protocol works, entitled Bitcoin: A Peer-to-Peer Electronic Cash System.
On 9 November 2008, he registered the Bitcoin project on SourceForge.net, an open-source project hosting platform (the project was later moved to GitHub). Over the next two months, he set about implementing a working version of his idea.
Bitcoin was launched on 3 January 2009. To prove that the launch had not happened before, he wrote in the very first block created (genesis block) the headline of the Times of that day:
The beginnings were difficult, but gradually Satoshi was joined in his project by other enthusiasts. On 12 January, the first transaction took place between him and Hal Finney (Hal), a 52-year-old American cypherpunk developer. Satoshi was also joined in early May by Martti Malmi (sirius), a young Finnish anti-statist who offered to help develop Bitcoin.
Gradually, the phenomenon is gaining momentum. The official bitcointalk.org forum was created in November 2009 and became a privileged place of exchange between users of the digital currency.
On 18 May 2010, a user of the bitcointalk forum, Laszlo Hanecz (laszlo), posted a message in which he explained that He desired 10,000 bitcoins in exchange for pizza “so that he would have some left over the next day”. After 3 days he found someone willing to make the transaction and on 22 May the payment was made. This is the first time someone has bought real goods with bitcoins. This story is known as the story of the most expensive pizza in the world. The 10,000 bitcoins used, which were equivalent to $40 at the time, are worth over $80 million eight years later. May 22 has since become “Pizza Day” for Bitcoiners, when thousands of pizzas are shared around the world.
On 11 July 2010, the latest version of Bitcoin was mentioned on Slashdot, a news site for technology and gaming enthusiasts, and the number of users soared. On 17 July, Mt. Gox, the most famous exchange platform in Bitcoin’s history, opened. Founded by Jed McCaleb, the creator of eDonkey, it was originally a Magic card exchange, MTGOX being the acronym for Magic: The Gathering Online eXchange. Later, Jed McCaleb sold the platform to Mark Kerpelès, a Frenchman living in Japan.
At the end of 2010, Satoshi passed away. He leaves the reins of the project to Gavin Andresen, an American who has managed to gain his trust, and he transfers the rights to the official website and forum to Martti Malmi.
However, the project continues without him, and it is this absence that allows the community to grow. The phenomenon is gradually gaining momentum and the myth continues to be written.
In February 2011, the Silk Road platform was launched. It was a dark web trading platform, where drugs were mainly exchanged and whose particularity was that it only accepted bitcoins. Its creator, Ross Ulbricht, was a great supporter of the free market and the platform was supposed to be a realization of this ideal.
In the spring of 2011, the first big bitcoin bubble occurred. Within a few months, the price rose from $1 to $30 and then fell back to around $2. The advantage of this price spike is that bitcoin is becoming a household name and attracting new users and investors. In June 2011, Wikileaks started accepting donations in bitcoins. In November, WordPress started accepting payments in bitcoins.
The price continued to rise. The second bitcoin bubble occurred in April 2013 and coincided with the Cyprus crisis, which resulted in a bank rescue plan involving the draining of the Bank of Cyprus’ bank accounts. The cause and effect relationship is difficult to prove, but the coincidence is highly symbolic.
At the end of 2013, the third bitcoin bubble occurred, with the price reaching $1150 in early December. This period was also marked by the closure of the Silk Road by the FBI in October 2013, and the hacking of Mt. Gox in February 2014, during which nearly 750,000 bitcoins were stolen. These two events contributed greatly to the bursting of the bubble, which led to a bear market for almost two years
Mining has also developed over the years. In the beginning, Satoshi was the only one to use his computer to mine, so much so that it is believed that he alone acquired more than a million bitcoins. Then others started doing it. As the value of bitcoin increased, mining became more and more efficient. First, validation was done through the computer’s central processing unit (CPU). Then, the less energy-consuming GPU (Graphics Processing Unit) mining took over.
Finally, from 2013 inwards, specialized integrated circuits (ASICs, Application-Specific Integrated Circuits) gradually appeared on the market: by being 10 times more efficient than graphics processors, they made them obsolete. Slowly but surely, mining has become professional and has become a real industry. Today, there are mining farms all over the world, especially where the cost of electricity and cooling is low, such as in China and Iceland.
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