History of Bitcoin: The Past, The Present and The Possible Future

History of Bitcoin: The Past, The Present and The Possible Future

bitcoin Blockchain Cryptocurrency
November 5, 2017 by Diksha Modi

Bitcoin crossed­ the $7000 USD mark a day before. From a time when the currency had negligible value to a time when a single Bitcoin is over $7000, prices have surely skyrocketed.

But how did it all happen? Let’s fly back in time and ride through history.

On 18th August 2008, i.e. around a decade ago, the domain bitcoin.org was registered. Nobody knew what was in store until November that year – the month when a person who called himself/herself released a paper: “Bitcoin: A peer to peer Electronic Cash System” in a cryptography mailing list.

Following this, January 2009 was the time when Satoshi mined the first block (called the genesis block). It had a reward of 50 Bitcoins (BTC).

That being said, Bitcoin didn’t really have much value back then. A user “SmokeTooMuch” even auctioned 10,000 BTC for a mere $50.

However, no buyer was found.

Just imagine, had somebody been aware that it will rise exponentially in the coming years, that person would have become a billionaire by now !!!

As time passed, the currency became more and more popular. On 22nd May 2010, a real transaction happened for the first time when two pizzas were bought for 10,000 BTC.

Further down the line, in February 2011, the currency gained parity with the USD for the first time and just two years later, around November 2013, it was 1000 times more valuable than the USD.

A setback to Bitcoin – the Cypriot financial crisis

 The higher and higher ride hit the bottom around 11th April 2014 when the Cypriot financial crisis occurred. The banks of Cyprus were in a debt so huge that the debt was more than the country’s GDP. With the government unable to pay back, Cyprus asked the European Union for help.

They agreed to help but on the condition that 6 billion Euros out of the 16 billion to be paid, will be paid by bank depositors i.e. people having savings in the bank.

Fearing that the government is coming for their money, a lot of people withdrew their savings.

Ultimately, an emergency loan of 2.5bn Euro was given by Russia.

However, all this crisis caused the value of Bitcoin to take a dive. Price dropped and reached its lowest.

2017 – The best year for Bitcoin

 2017 was arguably the best year for Bitcoin. Bitcoin broke its own record so many times and reached all-time high values.

For example, it passed the $1000 USD mark on 2-3 March 2017. The only other time it was reached was in November 2013. That being said, it did not just stop over there. From reaching $3000 USD in May to crossing $4400 in September, the currency has seen a sharp spike in value.

Guaranteed, the currency’s value changes rapidly in response to certain events. For example, in the beginning of September, the value was 5000 USD but thanks to the crackdown on ICOs and exchanges by the Chinese Government, the price dropped to 2900 USD on 12th September 2017. But as the world moved past the shock, just a month later i.e. on 13th October, the price was again 5600 USD.

The currency kissed the $7450 mark for the first time in November. This is being attributed to a recent announcement by Chicago Mercantile Exchange (CME) to offer Bitcoin futures.

For those who are unaware of the futures contract, it is basically a contract where the buyer and seller agree to buy a specific quantity of a commodity at a certain price on a certain date in future. The advantage being, it hedges risk.

Okay, that was the story so far. But who are the lead players in the Bitcoin game?

Who has the largest number of Bitcoins?

 Truth be told, it can’t be said for sure. First, because there is no way to a particular address to a person and second because a person can have his wealth split across multiple wallets and further into multiple addresses. It is not uncommon to specify a new address for change while making a transaction.

Still, based on our speculations and the data released by people, here are some of the people who hold a big chunk of Bitcoins

  • Satoshi Nakamoto: The mind behind Bitcoin, it is believed to have a total of 1,148,800 unspent coins spread across various addresses. That’s about 63% unspent coins. It’s tough to determine all addresses which belong to him. We do know some from the fact that genesis block and some of the earlier blocks were mined by him. People still send contributions to those.
  • Hal Finney: Hal Finey (died in 2014) was the first person to receive Bitcoin in a transaction. Satoshi sent 10 BTC to him as a test. He even did some mining.
  • The Winklevoss twins: Cameron Winklevoss and Tyler Winklevoss, claim to have around 1% of the total Bitcoins in existence. They announced in April 2013 that they had acquired $11 million worth of Bitcoins.
  • Tim Draper: When Silkroad shut down, FBI seized its funds. It got access to a wallet having 144,000 BTC and another having 30,000 BTC. The money was auctioned off in batches. This is when Tim Draper entered the club of top holders. He was the single winning bidder for nearly 30,000 BTC. 
  • Ross Ulbricht: He is allegedly the administrator of Silk Road going by the pseudonym “Dread Pirate Roberts”. Silk road generated around 615,000 BTC from things like transaction fees. Not all of the money was seized by FBI, and it still unclear how much of the revenue, Ross might have used.
  • Mark Karpeles: It is also assumed that Mt Gox Exchange founder, Mark Karpeles holds a good amount of BTC. However, we can’t say much.

That being said, one thing we can know for sure is how much Bitcoins a particular address holds. Here is a list of top 100 addresses with the most number of Bitcoins.

What’s for future?

That was all about the history so far and the key players in the market. But what’s for future?

How will the cryptocurrency market shape in future? Experts say that Bitcoin and Ethereum will stay. It is very likely that some altcoins will emerge and progress rapidly. For nobody really knows the future. There is a good possibility that price will continue to increase.

Maybe those with a stash of bitcoins will emerge as the newly rich and maybe the quote as quoted by somebody in a forum “We are the new wealthy elite, gentleman” will come out to be true.

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