Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
Now that Bitcoin is decade old, here is the journey of the cryptocurrency over the years, and how it continues to still stand as one of the most preferred cryptocurrencies of investors.
Ten years back the world was facing severe economic recession with the collapse of banking giants like Lehman Brothers. Little did we know then that an alternative form of currency was taking shape and Bitcoin was born on October 31st, 2018. So far, Bitcoin has traveled through its own journey of criticism and glory and still continues to be the single largest digital currency by market cap.
Let us take into how Bitcoin has managed to sail through over the last decade.
Early Days of Bitcoin
Ten years back, a pseudonym by the name Satoshi Nakamoto published the Bitcoin whitepaper. Till now, there is no trace of the actual identity behind Nakamoto. The mysterious identity who released the whitepaper claimed to be a Japanese man. However, some said that it was unlikely looking at the perfect English used in the whitepaper.
Since then there have been several conspiracy theories floating around Bitcoin’s actual creator. At one point even the name of American business tycoon Elon Musk popped up. But again, there was no substantial proof to back those claims.
By 2009, the first fifty Bitcoins referred to as the “Genesis block” were mined. The Bitcoin mining process soon gained traction among global developers. Mining is the process of solving complex mathematical algorithms to unlock new blocks and add them to the Bitcoin network. Bitcoin mining, specifically, demands high-end computing machine consuming high power.
Later in 2010, a Florida based programmer tested the real-life use-case of Bitcoin. The programmer paid nearly 10,000 Bitcoins the worth $25 for his pizza order. That same amount of Bitcoin would now be worth around over $60 million.
The Mt. Gox Hack and Silk Road Theory
In 2010, Mt. Gox, a Tokyo-based Bitcoin exchange started its operations and soon became quite popular soon after. By 2013, Mt. Gox was handling around 70 percent of all crypto transactions. However, the exchange had a very murkier past subjected to multiple hacks during its lifetime. In 2011 itself, Mt. Gox got hacked several times when Bitcoin reached $1 price for the very first time.
However, due to some regulatory issues, the website soon opted out of U.S. markets and by 2013 Mt. Gox had filed for bankruptcy. Later, Bitcoin came into the limelight for all the wrong reasons with the development of SilkRoad – the dark web marketplace. SilkRoad facilitated transactions for drugs, guns and other illicit activities, all through Bitcoin. Bitcoin soon was popular for all criminal activities across the globe. It was rather seen as an important tool to circumvent international scrutiny in illegal activities.
By 2015, the U.S. law enforcement agencies shut down the SilkRoad and Bitcoin soon plunged. Nevertheless, the interest among global investors for Bitcoin never died. Many soon started buying Bitcoin through open government auctions held later.
The Journey to Making an All-time High
The last year of 2017 was undoubtedly the greatest in the history of the crypto markets so far. Since the beginning of 2017, Bitcoin had started gaining good momentum with investors rushing to get their share at the exchanges. However, there were some rough phases as well.
China, which was a huge Asian market for Bitcoin trading and mining, introduced an outright ban on cryptocurrencies. Furthermore, Bitcoin had to face the wrath of severalized institutions continuously targetting the digital currency. This was one of the most volatile periods in the Bitcoin lifecycle. However, the unwavering support from investors helped Bitcoin to swim the waters.
The announcement of Bitcoin futures caused the digital currency to climb sky-high, and after that, there was no looking back again. By the time the first Bitcoin futures contracts were out, Bitcoin surged to make its lifetime high of $20000.
2018 – The Year When Regulatory Bodies Chipped-In
Along with the growing crypto mania of 2017, there was a simultaneous rise in the illicit activities of money-laundering and terror financing. Government agencies and regulatory bodies considered a dire need to step-in and protect innocent investors from the risks associated with the volatile crypto markets.
This year, so far, has revolved around the regulatory measures surrounding the crypto markets. Countries like the U.S., Japan, South Korea, and many others have introduced measures like AML and KYC to protect the retail investors’ interests. Following multiple hacks at exchanges around the globe, crypto businesses have also been supportive of the need to bring proper regulations in the market.