Since its creation in 2009, Bitcoin has revolutionized finance as the world’s first decentralized digital currency. From zero to $73,000, Bitcoin has been on quite a journey. And now it’s hard to envision the world of finance without it.
Here’s how Bitcoin got started, and how it got to where it is today.
Cryptocurrencies existed before the birth of Bitcoin. It is believed that the first-ever cryptocurrency was eCash, which was developed by David Chaum of Digicash back in 1990.
Almost 20 years years, Bitcoin came into existence.
Bitcoin was first introduced to the world in 2008 by an anonymous person — or a group of people — known as Satoshi Nakamoto. The goal was to create a decentralized digital currency free from the control of governments and central banks.
Unlike conventional currencies, Bitcoin functions on a peer-to-peer network, which means that transactions happen directly between users — without a middleman such as a bank. This decentralization is a defining feature of Bitcoin, which differentiates it from traditional currencies.
Bitcoin was officially launched on Jan. 3, 2009, when the first block of transactions, known as the genesis block, was mined.
Bitcoin’s supply is limited to a maximum of 21 million coins. This means no additional coins will be generated or created after reaching the 21 million limit. Satoshi Nakamoto introduced the concept of limiting the quantity of crypto and making it more valuable to combat inflation.
Do you know what the first item ever purchased using Bitcoin was?
It was two large pizzas from Papa John’s in 2010. The transaction on May 22, known as “Bitcoin Pizza Day,” was the first reported use of Bitcoin to actually buy something
On May 22, 2010, Laszlo Hanyecz, a Florida-based software engineer paid 10,000 Bitcoins for two Papa John’s pizzas.
“I’ll pay 10,000 bitcoins for a couple of pizzas.. like maybe 2 large ones so I have some left over for the next day,” he wrote on an online Bitcoin forum. “I like having left over pizza to nibble on later. You can make the pizza yourself and bring it to my house or order it for me from a delivery place, but what I’m aiming for is getting food delivered in exchange for bitcoins where I don’t have to order or prepare it myself, kind of like ordering a ‘breakfast platter’ at a hotel or something, they just bring you something to eat and you’re happy!”
“If you’re interested please let me know and we can work out a deal,” he added.
The 10,000 Bitcoins he spent on two pizzas would be worth an astounding $700 million today.
When it was introduced in 2009, Bitcoin’s value was zero. By the end of 2010, it had reached $0.30. Bitcoin saw significant growth in 2011, reaching what was then an all-time high of $29.60 that June.
Cryptocurrency remained sluggish in 2012. But 2013 saw steady growth, and Bitcoin surpassed the $1,000 mark that year.
In 2014, the cryptocurrency market faced a long winter due to the hacking of the Mt. Gox crypto exchange. The hack led to the suspension of all Bitcoin withdrawals in early February 2014, followed by the suspension of all trading on the platform. The incident led to a more bearish Bitcoin market for the next few years.
Bitcoin recovered in 2017, bouncing back to $1,000. It continued to jump, reaching a high of $20,000 by the end of the year. But it didn’t last long, and Bitcoin was throttled by another hack in 2018 when the crypto exchange Coincheck lost $530 million.
Bitcoin recovered in 2019, crossing the $10,000 mark.
Bitcoin became a popular investment during the pandemic. In 2020, the value of Bitcoin rose to almost $30,000.
Bitcoin surpassed this mark in 2021 and reached what was then its all-time high of $68,000. The sudden surge in Bitcoin’s popularity can be attributed to its increasingly mainstream adoption, such as being added to 401(k) plans and getting support from big names like Tesla CEO Elon Musk.
Bitcoin faced a number of challenges in 2022, leading to bearish sentiment across the crypto market. In April, the stablecoin TerraUSD and its associated cryptocurrency Luna suffered a significant drop in value, causing a loss of confidence among investors.
That was just the beginning. At the end of the year, the exchange FTX collapsed, causing a crypto market bloodbath. Bitcoin lost more than half its value, sinking to as low as $18,000.
After a prolonged bear market, Bitcoin and other cryptocurrencies have made a strong comeback. Bitcoin reached a new all-time high of $73,000 earlier this year to $73,000. The bullish trend is due to the SEC’s approval of spot Bitcoin ETFs, followed by the U.K.’s approval of Bitcoin-linked securities being listed on the stock market. Additionally, the upcoming Bitcoin halving event, which cuts the mining reward in half, is expected to push the price to new heights.
Some experts believe that Bitcoin will reach $80,000 by the end of 2024.