The first four years of Bitcoin should not be ignored.
At the end of 2021, it's time to reflect and study where we were to understand where we are going.
The first four years of Bitcoin should not be ignored.
While building Overline, it’s important for people to learn about the ecosystem. Cash App is the second most popular place in the world to buy Bitcoin and yet its chart cuts off the the most formative and disruptive period of Bitcoin; the first four years.
August 18, 2008: The domain name bitcoin.org is registered.
August 22, 2008: Satoshi Nakamoto emails Wei Dei, the creator of b-money, an "anonymous, distributed electronic cash system."
Satoshi mentions that they are getting ready to release a paper that expands on a similar idea.
October 31, 2008: Satoshi posts a message with the title "Bitcoin P2P e-cash paper" on a cryptography mailing list. The email describes a fully peer-to-peer electronic cash system that doesn’t require a trusted third party.
The email links to the whitepaper "Bitcoin: A Peer-to-Peer Electronic Cash System." The whitepaper introduces Bitcoin as an "electronic payment system" that uses cryptographic proof in place of trust. As a result, it allows any two willing parties to transact with each other directly without requiring a third party.
The whitepaper describes the electronic payment system. Owners transfer coins to each other by singing:
a) the hash of the previous transaction
b) the public key of the next owner.
These signatures get added to the end of the coin. Payees can then verify the chain of ownership by confirming the signatures. Additionally, Satoshi included a definition of Bitcoin's proof of work (PoW) system.
This paper marks the introduction of the concept of the Blockchain.
December 12, 2008: Bitcoin is added to Sourceforge. Early developers and contributors engage in conversations that discuss the future potential of these payment systems.
One such developer is Hal Finney. He looks at Bitcoin's code and points out some bugs and potential improvements. Finney highlights Bitcoin's potential as a global payment system.
January 3, 2009: Bitcoin's block is launched, and the genesis block is mined. The genesis block includes the message "Chancellor on brink of second bailout for banks." This message was in reference to government banking bailouts following the 2008 financial crisis.
This headline is an integral part of the Bitcoin mythos. Many have speculated that Bitcoin was created as a direct reaction to the traditional banking system's role in the 2008 financial crisis.
Bitcoin's supply is fixed at 21 million Bitcoins. Fractions of each coin are called "Satoshis" after the Bitcoin founder. Each Satoshi represents 0.00000001 BTC.
January 8, 2009: Bitcoin v0.1 is released. Satoshi announced on a cryptographic mailing list that Bitcoin is an electronic cash system that prevents double-spending through a peer-to-peer network. He states that Bitcoin is decentralized and has no server or central authority.
January 12, 2009: The first Bitcoin transaction was made. Satoshis sends Hal Finney 10 BTC. Hal Finney, a cypherpunk and computer scientist, was an active member of the nascent Bitcoin community. It is believed that he created the first-ever reusable PoW system.
Additionally, Finney is thought to be the second person to run the Bitcoin network after Satoshi.
February 11, 2009: Satoshi Nakamoto posts on the P2P Foundation forum. He talks about how he has developed an open-source P2P cash system called Bitcoin.
He writes that Bitcoin is:
a) completely decentralized
b) has no central server
b) requires no trusted parties
He further suggests that everything is based on PoW instead of trust.
April 12, 2009: Satoshi begins an extensive email exchange with a Google developer Mike Hearn. Hearn would go on to work full-time on developing Bitcoin. The pair discuss several important cryptocurrency concepts, such as security, transaction speed, and size.
October 5, 2009: Bitcoin gets its first-ever BTC/USD exchange rate. A pro-crypto website called New Liberty Standard provides the price based on the cost of the electricity needed to mine one bitcoin. They set the initial price at $0.0007 and offer daily updates.
October 12, 2009: Marti Malmi, a Finnish developer, known as Sirius, sells 5,050 Bitcoin for the price of $5.02. This transaction gives Bitcoin its first price in USD, with a valuation of $0.0009.
December 17, 2009: Bitcoin v0.2 is released. It is supported by Windows and Linux and comes with some much welcomed new features like multi-processing chip support and an autostart on boot option that allows miners to run Bitcoin in the background automatically.
Satoshi announces the launch of a new forum called bitcoin.org/smf/.
December 30, 2009: The first problems with Bitcoin v0.2 are reported when, to limit supply, the system makes it more challenging for miners to achieve block rewards.
January 24, 2010: A user calling themselves Sabunir tries to sell a picture on the Bitcointalk Forum. He quotes a price of 500 Bitcoin.
The thread becomes a hotbed of discussion between Satoshi and early Bitcoin adopters. One of the topics discussed relates to why Bitcoin transactions cannot contain encrypted messages.
February 15, 2010: Satoshi responds to negative feedback on his post to the P2P Foundation site. He explains why previous peer-to-peer digital currencies failed, citing their centralized nature as the reasons they didn't work.
February 26, 2010: Satoshi posts the Bitcoin logo.
March 3, 2010: Bitcoin Market becomes the first official cryptocurrency exchange. Beginning as a proposal on the Bitcointalk forum, at the time of its launch, each Bitcoin is worth around $0.03.
May 22, 2010: Laszlo Hanyecz negotiates with a fellow early Bitcoin adopter to have two Papa John's pizzas delivered to his home in exchange for 10,000 Bitcoins. This figure was roughly equivalent to $41. As of Bitcoin's peak price in November 2021, the cost of these pizzas was $650 million.
Back then, there were no established methods for buying goods or services with Bitcoin. Papa Johns themselves did not take the money. Thanks to Laszlo pizza purchases, the Bitcoin community refers to May 22 as Bitcoin Pizza Day.
July 7, 2010: Bitcoin v0.3 is unveiled. The update has several new features, including translations into Dutch, German, and Italian. Interestingly, this was the first update that Satoshi didn't sign off.
July 11, 2010: Software developer Gavin Andresen launched the Bitcoin faucet project on Bitcointalk. This project gave away 19,700 BTC to help get the network going.
Andresen became Bitcoin's chief developer in 2010. The MIT Technology Review has described Andresen as "The Man Who Really Built Bitcoin."
July 17, 2010: From July 12 to July 17, Bitcoin jumps in price from $0.008 to $0.8.
The now-notorious cryptocurrency exchange Mt.Gox first opens.
August 6, 2010: In a post titled "Bitcoin minting is thermodynamically perverse," on the Bitcointalk forum, a member called "gridecon" posts concerns about Bitcoin's energy usage.
Satoshi responds by comparing mining Bitcoin to mining gold and suggests the "cost of gold mining tends to stay near the price of gold." He means that while the cost of gold mining can be considered wasteful in isolation, the energy costs are outstripped by the usefulness of gold as a medium of exchange.
July 31, 2010: Bitcoin's Wikipedia page is deleted by a member of Wiki admin because it is considered not famous enough. Satoshi responds by suggesting Bitcoin should be at least mentioned under Electronic Cash.
August 15, 2010: The Bitcoin project's vulnerability is exposed when a fraudulent transaction creates 184 billion Bitcoins. The transaction is removed from the blockchain, and the network is forked to an updated version without the fraudulent transaction.
November 6, 2010: The Bitcoin total market cap surpasses $1 million. The number is calculated by multiplying the total number of Bitcoin circulating by the price on Mt.Gox, which was valued at $0.50.
December 10, 2010: PC World shares an article that describes Bitcoin as either the best idea since sliced bread or a "hacker's daydream." The article misstates that Bitcoin was invented because of the Wikileaks scandal.
Satoshi responds on the Bitcointalk forum, lamenting the fact that the association with Wikileaks could bring negative consequences for the coin. However, the article did provide significant publicity for Bitcoin.
December 12, 2010: Satoshi posts his final message on the Bitcointalk forum.
January 2, 2011: The Silk Road was launched by Ross Ulbricht. This infamous and illegal website's aim is to create a marketplace where people can buy anything they want without any trace. Bitcoin is seen as the currency of choice.
February 9, 2011: Bitcoin reaches "Greenback parity" when the price reaches USD$1. Soon, it drops below that level as some investors choose to cash out.
April 16, 2011: The Bitcoin magnate Jerry Brito writes an article for Time Magazine about how online cash could challenge governments. He cites the Wikileaks scandal as an example of how governments can pressure payment processors to freeze funding of troublesome websites.
Brito goes on to describe how removing third-party intermediaries can give people the power to spend money where they want.
April 23, 2011: Satoshi sends an email to Mike Hearn, the Bitcoin Core Developer, suggesting he will step back from the Bitcoin project, giving a vote of confidence to Gavin Andresen and his team. Some people question the authenticity of this email.
April 26, 2011: Satoshi sends an email to Gavin Andresen. It is Satoshi's final known correspondence.
And so begins the Bitcoin community's most enduring mystery: who is Bitcoin's creator Satoshi Nakamoto?
April 27, 2011: Bitcoin v0.3.21 is launched and features plug and play support. Additionally, it allows for full-precision Bitcoin amounts.
June 01, 2011: An article in Gawker uncovers the seedy underworld of the Silk Road. The report also mentions Bitcoin and Mt.Gox, which results in a surge of interest in the coin.
June 5, 2011: Bitcoin v0.3.22 is launched. It includes a fee schedule that demands the client accepts and relays TX's with a 0.0005 BTC fee schedule.
June 12, 2011: Bitcoin experiences its first bubble. The price of BTC surges up to $31 per coin before crashing to beneath $10.
Some analysts put the price rise down to interest in the coin generated via the Silk Road.
The following month, the New York Times suggests the price crash was caused by several hacking instances on the early Bitcoin exchanges.
June 14, 2011: Bitcoin version 0.3.23 is released with a bugfix to deal with the influx of new Bitcoin users.
June 18, 2011: Mt.Gox, by then the largest Bitcoin exchange in the world, shares news of a security breach. The price of Bitcoin drops from $17.5 to $0.01.
Mt.Gox announces that the names, passwords, and emails of more than 60,000 users have been stolen.
July 08, 2011: Bitcoin v0.3.24 arrives with features that support block downloading. It also fixes a loss of network crashes.
August 15, 2011: Bitcoin breaks past $10 per coin.
September 23, 2011: Bitcoin v0.4 is released. The flagship feature is wallet private key encryption.
October 7, 2011: Litecoin (LTC) was created by Charlie Lee. Often referred to as "Bitcoin Lite," the coin was designed to enable instant peer-to-peer exchange at an affordable rate.
Litecoin is considered one of the first "altcoins." In time, it would be followed by other coins like Ethereum, which was created in 2015.
October 20, 2011: Bitcoin drops from around 90% of its peak price and falls below $3.
December 19, 2011: Bitcoin appears on the TV show "The Good Wife" in an episode titled "Bitcoin for Dummies." As a result, the price rose by 10%.
March 2012: Linode, a web hosting and cloud-computing platform was hacked for 45,544 BTC. Many of the coins were owned by Bitcoin's lead developer, Gavin Andresen.
May 12, 2012: An early Bitcoin exchange called Bitcoinica garners significant media attention due to a security breach that saw more than 18,000 Bitcoins stolen.
The exchange is shut down in the light of several million-dollar lawsuits.
June 18, 2012: After the Mt.Gox, Bitcoinica, and Linode hacks, Bitcoin’s price tanks. However, by June 18, it went past $9 for the first time in nearly a year.
August 17, 2012: The Washington Street Journal reports that Texas resident Trendon Shavers has been arrested for running a Bitcoin Ponzi scheme. It suggests that at one point, the scheme accounted for 7% of the worldwide Bitcoin supply.
Shavers was later sentenced to 18 months in prison. Additionally, he faced a $40 million civil action and heavy fines.
This is the early days of Bitcoin. Learn from the situation, understand wins and loses.
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