The History of Bitcoin

The History of Bitcoin

Bitcoin is one of the most popular and well-known cryptocurrencies currently available on the market. If you look back at its origins, the name quickly comes to mind: Satoshi Nakamoto. This guide explains who Satoshi Nakamoto was, how he created Bitcoin, how his first years on the market went, his general development over more than a decade and the general fascination with Bitcoin.

Satoshi Nakamoto Inventor of Bitcoin?
In 2008, Japanese Satoshi Nakamoto published a white paper about Bitcoin . However, the history of the popular cryptocurrency began many years before the publication of this well-known white paper. In the 1990s, a group of cryptographers who called themselves “Cypherpunks” focused on privacy in the electronic age. A manifesto published in 1993 begins with mathematician Eric Hughes saying that privacy is necessary for an open society. This statement originally referred to the beginning of the digital age and the associated handling of money based on the protection of personal transaction data.

a bitcoin stands in a heap of bitcoins

Before the Internet was established, it was possible to transfer transactions from one to another with a high level of protection of personal data. The most common payment method at that time was cash. With increasing digitization, however, the payment options offered were increasingly monitored by third parties. For this reason, several attempts were made to develop a type of Bitcoin at the end of the 1990s.

– For example, cryptographer David Chaum developed the DigiCash principle .
– While few years later Adam Back developed Hashcash technology. A technology that Bitcoin is also based on.

However, all of these cryptocurrencies were pure thought experiments at the time. None of the concepts mentioned made it to market maturity. The reasons for this are purely speculative, but are likely to be due to the infrastructure at the time. The time of cryptocurrencies had not yet come because their need was not as present as it is today. Nevertheless, each thought experiment mentioned contributes its part to the development of bitcoin. Satoshi Nakamoto mentions many of them in his white paper.

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To this day, it is not known who Satoshi Nakamoto really is. It is not known whether a woman or a man hides behind this name. Theoretically, it is also possible that a group is hiding behind the name Satoshi Nakamoto. Over the past few years there has been speculation as to who is behind the person. In 2014, Dorian Nakamoto, who was born in Japan and lives in America, was referred to as Satoshi. A year later, Craig Wright claimed to be operating under the pseudonym Satoshi Nakamoto. However, he could not provide evidence for his statement. Many insiders believe Hal Finney was masquerading as Nakamoto. The late programmer worked a lot on the creation of bitcoin. Nick Szabo has also often been brought into play, when it comes to tracking down Satoshi Nakamoto. He authored the proof-of-work system that is still used in Bitcoin today.

The last known message from Satoshi Nakamoto was on April 23, 2011 with an email to the programmer Mike Hearn. He informed him that he now knew the project was in good hands. The true identity of Satoshi Nakamoto is still unknown to this day. Which is not a problem, because the entire Bitcoin project is decentralized. Anyone involved in improving the protocol has equal voting rights.

Bitcoin development process
If you look at the thought experiments that preceded bitcoin, you justifiably ask yourself why bitcoin is so successful in contrast to its predecessors. To answer this question one has to look at the financial crisis in 2008. The entire world was faced with a huge financial problem, because the American bank Lehman Brothers fell into the abyss. Investors were left penniless. Unemployment was incredibly high at the time, which, in addition to the Lehman Brothers crisis, also meant that mortgages and loans that had been granted could no longer be serviced. Confidence in the entire banking sector fell to an unprecedented low. The company Occupy Wall Street was born and citizens became aware that their money is only safe if

At the same time, an unknown person registered the domain bitcoin.org. Cypherpunks and various cryptographers received the white paper entitled: “Bitcoin: A Peer-to-Peer Electronic Cash System” by Satoshi Nakamoto via their mailing list. In this white paper, he explained a payment system that enables person-to-person transactions without “monitoring” third parties such as banks and savings banks. After countless attempts in the 90s, Bitcoin is considered the first successful digital currency.

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Bitcoin’s first years
After the Bitcoin whitepaper was sent and published, many people got to work. Many months have been programmed to optimize the system behind the Bitcoin. In 2009 the time had finally come. The first block was mined on January 3rd, 2009. The first 50 bitcoins were on the market. Looking back: a historic event.

There is something magical about the first block in particular. The following text was hidden in the so-called genesis block, i.e. the actual blockchain: “Chancellor on the verge of the second rescue operation for banks”. It is a text that the British newspaper “The Times” previously headlined. It is still considered an indication of the raison d’être of bitcoin. Bitcoin as the first cryptocurrency should ensure that the world never again heads for such a catastrophic banking crisis.

First transactions with the Bitcoin
In 2009, Satoshi Nakamoto sent Hal Finney 10 bitcoins on January 12. This transaction was not only the first transaction of Bitcoins, but has gone down in history as the first person-to-person payment. Hal Finney, who recently passed away in 2014, played a key role in programming the Bitcoin protocol and was in lively contact with Satoshi Nakamoto. The first product purchase that was paid for with bitcoins took place about a year later on May 22, 2010. The American Laszlo Hanyecz bought two pizzas for 10,000 bitcoins.

In its early days, Bitcoin was characterized by a very slow growth phase. Except for a few computer nerds, nobody saw the point of bitcoin. The consciousness of the people could at that timenot yet detached from the physical idea of ??money. That was to change abruptly in 2010. July 18, 2010 was to become a historic day for Bitcoin. It was the day the first exchange opened. Mt. Gox opens its doors. At that time, the value of bitcoin was around 6 cents. No comparison to its current value. In the months and years that followed, the price rose. After Mt. Gox, Bitstamp also got into crypto trading in 2011. Other crypto exchanges and crypto brokers followed. After a legendary hack and a booty of an estimated 750,000 Bitcoin, the equivalent at the time was around $350 million, Mt. Gox disappeared from the scene. The value of Bitcoin then fell rapidly. It took years for Bitcoin to recover from this shock.

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Bitcoin in 2017: Technological change brought hype and all-time high
The bitcoin exchange rate recovered slowly after the Mt. Gox exchange hack. However, in 2017, Bitcoin suddenly surged in price and surpassed the $1,000 mark. The bitcoin community broke with its network, because bitcoin was not made as a global means of payment. In August 2017, Bitcoin therefore split into Bitcoin and Bitcoin Cash. Bitcoin Cash stood for larger blocks of transactions.

The year 2017 was also the year that the public learned of the existence of Bitcoin. Its high value led to the media focus on bitcoin. Mainstream media publicized and hyped Bitcoin. The stock price reached an all-time high of more than $20,000 in 2017.

Conclusion on the history of Bitcoin
Bitcoin is a real innovation. The history of its origins in the field of financial investments is unique. How to learn more about buying bitcoin is on the web. Unlike all other currencies, bitcoin does not exist as a note or coin. Rather, Bitcoin is a very abstract unit of account that can be exchanged for other currencies and traded on stock exchanges. With Bitcoin, control is decentralized and not via a bank. Custody takes place in a wallet. The strengths of bitcoin are free from inflation and independent of states and central banks. Nevertheless, Bitcoin tends to be much more volatile than other currencies.

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