The story of Bitcoin – The Cryptonomist

The Bitcoin protocol was officially born on 31 October 2008, when its creator, the famous and unknown Satoshi Nakamoto, published it on a cryptography mailing list. 

How was Bitcoin born

Nothing is known about what happened before that, partly because no one knows who Satoshi Nakamoto really is, but it is known that on 16 November of that year Satoshi released the first code (Bitcoin Pre-Release), on 3 January 2009 he mined the first blockchain block minting the first 50 BTC, and on 9 January he published the first official version of the software (Bitcoin v0.1.0). 

At the time, BTC still had no market, so its value was zero. Moreover, there was only a very small group of people using Bitcoin v0.1.0, perhaps only two (Satoshi and Hal Finney) or so. 

Bitcoin v0.1.0 also acted as both a node, a wallet and a miner, which is something very different from the situation today. 

In 2009, Bitcoin was really just a little game for nerds, little more than an experiment in which very few people were participating. 

However, it began to spread within the cypherpunk community, and was being used as a form of anonymous payment. 

As a result, the number of its users increased significantly, percentage-wise, in a very short time. So much so, that already in the following year, two fundamental steps took place. 

On 22 May 2010, i.e. less than a year and a half after the creation of the first BTC, the first payment in Bitcoin in the entire history of a tangible good was made: two pizzas, paid 10,000 BTC.

Price movement since its origins

A few months later, the first purchase and sale of BTC in money on an exchange took place. From that moment on, Bitcoin began to have a market price, and the first price was around $0.06. 

The following year saw the first big boom in Bitcoin’s price, reaching a peak of $32. Compared to the initial $0.06, the price in about a year had already grown by 53,000%. It is possible that it was this first huge boom that triggered interest in Bitcoin. 

2012 saw the first halving of the reward for those who manage to mine a block, reduced from 50 BTC to 25 BTC. That year the annual inflation rate of Bitcoin’s money supply went from 25% to just over 8%. 

The following year triggered Bitcoin’s first big post-halving bull run, with the price skyrocketing to $1,100 by the end of the year. Within 12 months, the price had risen 8,600%. 

By contrast, 2014 was the first real bear market year, also marked by the bankruptcy of what was then not only the largest Bitcoin exchange in the world, but also by far the only large one, Mt. Gox. 

This triggered a period of great suffering, which brought the price back down to a low at around $170 in 2015. 

However, in July 2016 there was the second halving, which brought the annual inflation rate of Bitcoin’s money supply below 4%. 

2017 was definitely an important year, both because there was the second big post-halving bull run, which brought the price up to $20,000, and because the whole world began to take an interest in Bitcoin. It was also the year in which numerous other cryptocurrencies began to emerge. 

The expansion of the cryptocurrency market

In reality, other cryptocurrencies had already sprung up since 2011, but until 2016 very few had been created. In 2017 there was a real boom, starting with the famous Bitcoin fork called Bitcoin Cash (BCH). 

2018 and 2018 were bear market years, but very different from 2014-2015. In fact, projects, initiatives, companies related to Bitcoin and cryptocurrencies continued to emerge, so much so that crypto markets were actually able to thrive even despite the bear market. 

In December 2018, the price of Bitcoin had fallen to $3,200, and after recovering to over $11,000, during the March 2020 financial market crash caused by the onset of the pandemic, it was back below $4,000. 

In May 2020 there was the third halving, which brought the inflation rate well below 2%. The following year there was the last big post-halving bull run, which ended in December with the price reaching a new all-time high near $70,000.