#marscryptocurrency

In just over a decade of its existence, Bitcoin has transformed the world of finance and technology. As it continues to gather public interest and gain higher market values, here is a look at the humble beginnings of Bitcoin.

A blueprint named Bitcoin

The concept of Bitcoin was introduced at the peak of a financial crisis in October of 2008 by a research style white paper titled, Bitcoin: A Peer-to-Peer Electronic Cash System. The author adopted the pseudonym Satoshi Nakamoto and remains anonymous to date.

Nakamoto posted a message on a cryptography mailing list titled, “Bitcoin P2P e-cash paper.” The mail contained a link to his white paper. Bitcoin was conceptualized as a decentralized digital currency in this paper. It enlisted methods of using a peer-to-peer network to generate “a system for electronic transactions without relying on trust”. Money could be transferred from user to user on the peer-to-peer network without an intermediary. 

The Foundation 

 Bitcoin’s blockchain was launched in January of 2009 when its first block was mined. It was aptly called the Genesis block. A week later the first test transaction took place. Nakamoto sent ten bitcoins to programmer Hal Finney who was one of the first supporters of Bitcoin.

In the following months, Bitcoin was obtainable by miners who were validating the Bitcoin blockchain. Bitcoin trading took place between miners who would solve complex math problems to mine new bitcoins and verify previous transactions.

Fiscals and Finances

The first economic transaction happened almost a year later in exchange for two pizzas. Before this transaction, bitcoins were only mined and never traded. In May of 2010, a Florida man named Laszlo Haynek managed to buy two Papa John’s pizzas valued at $25 against 10,000 bitcoins. This transaction was the first to place an actual monetary value on bitcoins at four bitcoins per penny.

Negotiations for the first transactions were at arbitrary prices on internet forums. Bitcoin was being used to barter goods and services. In October of 2009, New Liberty Standard a bitcoin buying and selling service was created. A value ratio of 1.309,03 Bitcoins for $1 was established based on the energy cost of mining bitcoins. This value was compensation for the mining of the blocks according to the price of the electricity. It was the start of Bitcoin exchanges.

Bitcoins monopoly was challenged in 2011 when miners and coders started to build other networks like Ethereum, Litecoin and Namecoin. These rival coins offered improved transaction time and added services such as smart contracts. The larger applications attracted more individuals to the cryptocurrency ecosystem, driving bitcoins perceived value up. 

There was an increase in the use of Bitcoin as currency once businesses began to accept the asset alongside traditional currency. Overstock in January 2014, PayPal in September 2014 and Microsoft in December 2014 became the first major retailers to accept Bitcoin as payment.

The rise of Cryptocurrency