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Bitcoin is 10 years old: Here’s what to expect in the cryptocurrency’s second decade
What began as an email chain between a bunch of cypherpunk’s has turned into one of the hottest technologies of our time.
Oct. 31 will mark the 10th birthday of one of the most promising, yet divisive technological advancements of the 21st century: Bitcoin.
In the aftermath of the global financial crisis, the first and most famous cryptocurrency emerged from an underground network of libertarian-leaning cypherpunks. Over the past decade its popularity has soared, but so has the number of its detractors. On the eve of its anniversary, here’s a look back at some of the glorious — and infamous — moments in the short life of the world’s most famous cryptocurrency.
And where it all began:
‘I’ve been working on a new electronic cash system that’s fully peer-to-peer, with no trusted third party’
Oct. 31, 2008, 06:10:00 PM
That was the first email in a series of messages sent by Satoshi Nakamoto, the presumed pseudonym adopted by the creator of bitcoin, in a proposal for a payment system that is completely anonymous running on a decentralized distributed ledger, known as the blockchain.
Today, there are over 2,000 cryptocurrencies, most of which will fail and become worthless, according to Barry Silbert, chief executive officer of the Digital Currency Group, and there are already close to 1,000 dead coins, ones that either failed before launching or have ceased operation, according to a website that tracks such failures.
But the very first digital currency is still going strong, albeit with plenty of ups and downs. Once worth less than 1 cent, a single bitcoin fetched nearly $20,000 in December 2017. Today, one bitcoin BTCUSD, +0.17% changes hands for about $6,500.
The early days
After the release of the Bitcoin white paper a decade ago, Satoshi started a chain of emails to a cryptography mailing list, largely made up of cypherpunks — those who promote increased financial privacy — looking to spread and champion computer encryption. The early emails were met with both enthusiasm and skepticism.
“Bitcoin seems to be a very promising idea. I like the idea of basing security on the assumption that the CPU power of honest participants outweighs that of the attacker,” wrote computer programmer Hal Finney in an email exchange with the group.
It was at least two months before the blockchain and bitcoin experiment got under way with the creation of the Genesis Block, the first 50 bitcoins ever mined.
A note that accompanied the copy of the Genesis Block gave rise to the notion that bitcoin, in part, may have been a response to the financial crisis. “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks,” the message said.
However, in an interview with MarketWatch, New York University professor David Yermack, debunked this theory, but did say that the timing definitely contributed to the hype around bitcoin.
Bitcoins Genesis Block
But what were people meant to do with these bitcoins once they had been created, or mined?
“I guess the key problem right now is that once you generate coins, there’s nobody to test it with, even for dummy transactions. Is there a plan for a mailing list or some kind of trivial marketplace to give people something to do with their newly minted bitcoins?” wrote Mike Hearn, a software developer and early bitcoin developer in the cryptography email chain.
One year later, his question was answered.
First recorded transaction
While there were a number of early test transactions — the first being a transfer between Satoshi and Finney — the first documented transaction didn’t occur until 2010.
On May 22, 2010, Jacksonville programmer Laszlo Hanyecz, convinced Jeremy Sturdivant to send him two pizzas, and in return, Hanyecz would give him 10,000 bitcoin, which in today’s terms is more than $30 million per pizza. The transaction would become part of crypto folklore and May 22 will always be known as Bitcoin Pizza Day.
Eight years on, bitcoin is traded freely on more than 200 exchanges, with volume dominated by speculators hoping to make a quick buck buying and selling the most liquid cryptocurrency. There are now more than 250,000 on-ledger transactions per day, according to data from Blockchain.com.