Bitcoin Explained – Chapter 3: The history and future of Bitcoin
How did Bitcoin become the most well-known crypto currency? This chapter of the Bitcoin Explained series explains how influential the first years of Bitcoin development was for the whole economy.
In 2008, the Internet domain Bitcoin.org was registered by an anonymous owner. The only content was the so-called «Bitcoin Whitepaper» - a nine-paged document explaining the complete structure and the idea behind Bitcoin. The author was the pseudonym «Satoshi Nakamoto». Linguistic experts who examined the Bitcoin whitepaper looked at Satoshi Nakamoto as an experienced theorist with a rather mediocre knowledge of programming.
To this day, nobody knows who or what is behind the pseudonym «Satoshi Nakamoto». Even the closest confidants and first collaborators of the Bitcoin project had only email contact with Nakamoto without ever having seen him or her. There may also be an entire organization or a group of people behind the pseudonym - no one knows. The way the Bitcoin whitepaper was written and published and the contact during the collaboration with the first Bitcoin programmers not only shows how well-grounded the whole project was, but also signals the high relevance of the anonymity of the inventor.
History of Bitcoin - The first years
Since the beginning, the development of the Bitcoin protocol has been extremely rapid. The first version «Bitcoin 0.1» was launched just three months after the white paper was published. On 6 January 2009 by the first transaction between founder Nakamoto and the developer and crypto activist Hal Finney took place. At the end of 2009, the exchange rate was set for the first time. It was set at 1,309 Bitcoin per 1 USD - the cost of electricity and storage required to maintain a Bitcoin computer. Below are some of the most defining moments of Bitcoin's early years:
Source: Vontobel Investment Banking
Further events and outlook
In the following years, the cryptoscene was mainly shaped by the expansion of the network and the establishment of various «Altcoins» (other crypto currencies). More and more merchants accepted Bitcoin as a means of payment. The Bitcoin project is constantly being expanded and improved (current version 0.18) and the price reached its all-time high of USD 20,089 in December 2017.
The future will show whether Bitcoin will actually assert itself as a digital means of payment or whether it will be used as «digital gold». Nevertheless, the Bitcoin community is working hard on the further development of the Bitcoin protocol to make the system safer, faster and more scalable. Each day, Bitcoin users transfer Bitcoins worth between USD 400 million and USD 800 million - way more than back in 2017, just before the all-time high was reached.
Next in Bitcoin Explained
The first two
parts of the Bitcoin 1x1 discussed how Bitcoin differs from traditional
currencies and how it has grown its popularity. The next step is to understand
where the technical brilliance and innovation of Bitcoin lies. Expressions such
as Blockchain, fork and wallet are frequently mentioned, but what exactly do
these terms mean?
The next chapter therefore examines the basic characteristics of the Bitcoin protocol.
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