When Bitcoin came into existence

Journalists suspected that each of the technology developers who contributed to the BTC creation story could have been Satoshi Nakamoto. But the programmers denied involvement.

How new coins emerge

Many altcoins (alternative cryptocurrencies) are created through forks. This means that the original chain is split. A global protocol change is made. The new chain operates under different rules. It has its own native coin.

Top popular koins that emerged as a result of BTC forks:

• Bitcoin Cash (BCH) as of August 1, 2017. One of the most successful branching of the protocol.
• Bitcoin Gold (BTG).
• Litecoin (LTC).

Coins are also issued on proprietary blockchains developed from scratch. In addition to the Bitcoin chain, there are Ethereum, Polkadot, Solana, and dozens of others.

They differ from the first blockchain in the ways of consensus, algorithms, degree of centralization, functionality. It is possible to issue tokens on the basis of new networks. For example, in the Etherium blockchain – according to the ERC-20 standard.

History of Bitcoin development by year

To understand what led to a radical change in the financial system of the 21st century, you need to know the history of the first coin. Bitcoin was created in 2009. It was the initial step to build a new architecture of monetary transactions. After led to the creation of smart contracts and decentralized dapps applications.

Inception and first mentions

The important events of bitcoin, the history of the creation and the emergence of the crypto coin are considered in the table.

First transactions

An important date in the development of the project – May 22, 2010. Developer Laszlo Hanec bought 2 Papa John’s pizzas for cryptocurrency.

They cost him 10,000 koins (about 25 dollars at the exchange rate of the time). Later, he bought pizza in this way several more times.

Other important events in the history of the project are considered in the table.

An important event of this period – December 16, 2010 Satoshi Nakamoto intervened in the protocol for the last time and added to the code. After that, he disappeared.

Collapse and revival

Since December 2013, the project began to have a black streak. About $100 million in BTC was stolen from users. Then the ban on the use of cryptocurrency in China came out and the largest exchange BTC China was closed. Bitcoin legalization was also abandoned by Norway. Other negative events:

• On January 8, 2014, the arrest of one of the heads of the Bitcoin Foundation, a charitable foundation, took place. His activities are aimed at encouraging the use of bitcoin. He was accused of money laundering. The price of the coin immediately fell by $40.
• From February 7 to February 12, 2014, transaction problems were detected at all major exchanges. Vulnerabilities in transactions were discovered. Because of this, the price of the coin fell by 30% to $600.
• In February 2015, the coin was trading at $262.

But since 2016, the project began to gain popularity again. The price of the koin increased. In March, BTC was recognized by the Cabinet of Ministers of Japan, the largest marketplace for trading digital assets Bidorbuy was launched.

In April, the Steam Service, an online service for the distribution of computer games and programs, began accepting the coins for payment. In July, the Uber cab network in Argentina switched to using BTC. In September, the number of bitcoin ATMs increased – 771.

The number of academic articles focused on BTC increased from 83 (2009) to 3,580 in 2016.

In 2017, the number of partners, websites and companies that accept cryptocurrency increased rapidly. For example, the number of stores in Japan working with BTC increased 4.6 times.

Activity on cryptocurrency exchanges also increased. From winter to early summer, the number of transactions on the Poloniex trading platform showed a 640+% spurt. The legalization process started in Japan (acceptance of BTC as a legal payment), Russia, Norway.

In January 2017, the coin was trading at $1150. And on December 15, 2017, the coin reached a new level and set a high of $17,900. But then came a sharp decline.

For investors, 2018 became the toughest, as the price was constantly decreasing. In winter, in 16 days, the cost fell 2 times. Already on February 7, the coin was trading at $3399.

Explosive growth

Since the beginning of 2019, the recovery of the rate began. Already on February 24, the first significant jump to $4199 was recorded. And eight days later, the price reached $5256. This was the beginning of explosive growth and the setting of new historical highs:

• May 29, 2019. Coin price – $8721.
• June 16, 2019 – $9311.
• June 22, 2019 – the $10,000 milestone was crossed and a record of $10,738 was set.
• June 26, 2019 – $12,637. The jump is attributed to the announcement by Facebook management of the creation of its own cryptocurrency Libra and the general development of the blockchain technology industry.
• December 2020 – A new record of $28,700 is set.

Coronavirus epidemic, uncontrolled increase in the mass of the dollar and other currencies, unstable economic situation led to a loss of confidence in fiat.

More and more investors, in order to hedge risks, began to transfer assets into the digital gold of the 21st century. While the koin was worth $28,700 at the end of 2020, by April 14, 2021, the price reached a record $64,863.

Our timing

After the peak in the spring of 2021, a natural decline began. Its acceleration was influenced by news from China. The government of this country banned mining on its territory.

By July, the price fell to $31,700. By August, a gradual recovery of the cryptocurrency market began. In early September 2021, the coin was trading at $46,000+. But its value was unstable. Upward jumps alternated with falls.

The forecasts of crypto experts are optimistic. They expect a gradual recovery and a new wave of growth by winter 2021.

History of the BTC rate

For the first time, the ratio of bitcoin to the dollar was announced on the New Liberty Standard exchange site – $0.00076392443 per coin.

The rate was calculated using the formula: power required to create 1 blockchain link x the price of electricity in the US / reward for 1 block.

First prices for the coin according to the New Liberty Standard website

The first large-scale rate jump took place on July 12, 2010. For 5 days there was recorded a growth of 10 times to $0.08. And on November 6, when the capitalization of the project reached 1 million – up to $0.5. Other rate hikes:

• February 9, 2011 the price of $1 was reached for the first time.
• June 2, 2011 – $10.
• June 8, 2011 – the price on the MtGox crypto exchange reached $31.91.
• February 28, 2013 – since the coin was created, the $31.91 ceiling is broken for the first time.
• March 21, 2013 – jumped to $74.9.
• November 19, 2013 – a record of $1242 is set.
• 2014 – the maximum rate during this period was $310.
• 2015 – the bar of $360 was reached.
• 2016 – for the first time the price passed over $1000.
• 2017 – one of the historic highs of $19,000+ was set. The year was rich in ICOs (initial coin offerings), which helped attract new investors to the cryptocurrency industry.
• 2018 – the price dropped to $3552.
• 2019 – due to the growing popularity of cryptocurrencies, their legalization in different countries (legislation changed in the EU, USA, Canada, and later in Russia (2020), Ukraine (2021)), a stable growth began. The exchange rate reached $19,000.
• 2020 – against the background of an epidemic, economically unstable situation and a fall in the value of fiat, the price of the first coin rose to $28,700.
• 2021 – a historical maximum of $64,863 is set (as of September).

Regulatory history

The legal status of cryptocurrencies in 2021 is still unapproved. Although the level of acceptance has increased. But part of the countries still prohibit any activity with coins (Morocco, Algeria, Bolivia) or put restrictions on specific transactions (Iran, Bangladesh, Thailand). Important events:

• March 18, 2013 is the release date of a report on virtual assets and their legal status. The document was released by FinCEN, a financial crime network in the US. This is the first attempt to establish controls on the use of crypto by both individuals and businesses. The anti-money laundering policy extended to transactions on the Bitcoin network.

FinCEN head Jennifer Shasky Calvery suggested in 2013 that cryptocurrency should be subject to the same laws as fiat.

• In June 2015, Superintendent Benjamin Lawsky, who worked for the Department of Financial Services in the U.S., created a set of regulations relevant to New York State. They were supposed to help regulate the digital currency industry and protect customers using BTC.
• In August 2017, the Canadian Securities Administrators (CSA), a Canadian securities oversight organization, released the document. It specified the treatment of ICOs and the classification of tokens.
• On September 29, 2017, the Swiss Financial Market Supervisory Authority (FINMA) released its document. It specified the classification of coins. Thanks to this, it can be determined whether a particular coin is a security and whether certain provisions apply to it.

• July 2018 – the emergence of the Virtual Assets Act from the Government of Malta. It included the classification of coins + terms and conditions for the handling of coins.
• In October 2019, the SEC determined that Bitcoin could not be classified as a security token. An adaptation of the Howey test was used for the analysis. The laws cannot be applied to the coin as a security token.
• In January 2019, the UK’s FCA (the country’s regulator) issued the Guidelines on Cryptoassets. This is how the formation of a new classification occurred. According to it, BTC is an Exchange Token or exchange token.
• December 2020 – Russia adopted federal law No. 259 “On Digital Financial Assets”.
• September 2021. In the Ukrainian parliament, deputies approved the law “On Virtual Assets” (draft #3637) in the second reading. Its adoption creates prerequisites for the legal operation of projects, including crypto exchanges, in the country.

The future of Bitcoin

The rapid growth of the coin’s rate in 2020-2021 against the background of the falling price of the dollar, euro and other currencies showed that more and more investors are losing confidence in fiat and the current financial system.

Bitcoin has become the new digital gold and a means of saving in times of instability. The rise in the exchange rate did not come out of nowhere. It is a consequence of the change in monetary and commodity relations and the transition to a decentralized system based on the P2P principle.

This was the first time that the exchange rate was pushed up by institutional investors: large private investors and companies. This trend could intensify in the future.

Bitcoin, despite the emergence of a huge number of new blockchains and coins, will remain the flagship of the market and will set the general mood of trading. But its influence will gradually weaken. The price, according to experts’ forecasts, will break the historical maximum more than once.

Summary

The emergence of BTC has fundamentally changed the financial system. Despite the predictions of skeptics, the coin’s rate continues to grow. It sets all new historical maximums.

Periods of price decline after a sharp rise are normal and natural tendencies in the market.

Knowing the origin and history of bitcoin rate changes, the preconditions for growth and decrease in value, investors can make more informed and profitable investments.

Frequently Asked Questions