The technology of Bitcoin (BTC) and blockchain has worked as a flawless mechanism since its introduction as an alternative to conventional financing.
On October 31st, 2008, when the white paper, namely the technical document of BTC, was published, perhaps no one other than its creators knew that this would be a milestone in the financial world.
The white paper published by the person or group called Satoshi Nakamoto appeared as an alternative to the existing economic system and presented fundamental differences.
First of all, this currency would not be a physical one but a kind of digital currency created by encryption.
The entire system would be established on a blockchain, which is a distributed database. In other words, retroactive manipulation, i.e., “tempering with accounting books”, would be impossible in this system which is to be registered in numerous computer systems.
Decentralized finance
Transactions would be transparent, and users would be anonymous unless they chose to disclose themselves. This structure would completely be decentralized. It would not be subject to any authority and could not be manipulated by any form of power.
In other words, a secure, transparent, fast and cost-efficient transfer opportunity would come into being and no one could turn off the system, for it was not centralized. Moreover, transfers could easily be made without any amount limitation, and they could be monitored transparently.
Limited to 21 million BTC
Bitcoin transactions would be approved by individuals called miners, and new BTCs would be released into the market through the decryption of certain codes. Individuals would earn a block reward as a result of their mining activity. On the other hand, the system had such a unique infrastructure that as BTCs, which are limited to 21 million in number, were discovered, mining activities would become more challenging, and the amount of a block reward would be decreased over time through a method called halving. It was envisaged that BTC production would continue until 2140.
The fact that BTC would be released in a limited number caused it to be compared to gold. Just like gold, BTC would be hard to “mine”. BTC was a limited resource, and it carried value. However, BTC was more advantageous than gold in terms of maintenance and transfer. For such reasons, BTC soon became recognized as an investment instrument. Moreover, alternative cryptocurrencies would follow Bitcoin.
The first transfer
Once the technical infrastructure mentioned in the white paper titled “Bitcoin: A Peer-to-Peer Electronic Cash System” was created, it continued to operate uninterruptedly.
It was just about 2 months after the publication of the document that the first Bitcoin block was created on January 3rd, 2019. Only 9 days after this step, the first BTC transfer was carried out on January 12th, 2009. The transfer took place between Satoshi Nakamoto and Hal Finney.
As of October 5th, 2009, we were now able to talk about the “market value” of BTC. Today, its price performance is closely being monitored. As to the first BTC value that was observed, it was in a stock exchange called the New Liberty Standard. On October 5th, 2009, 1,309.03 BTC was only 1 USD.
The first known payment
And thus began the striking performance of BTC. By 2010, BTC had begun to extend its impact area. People all around the world had already started to purchase and transfer BTC.
Yet the first known payment was quite interesting. On May 22nd, 2010, where the famous event took place and is still celebrated as the “Bitcoin Pizza Day”, Laszlo Hanyecz, a US citizen, wrote in a forum that he wanted to eat pizza and that he could pay in BTC. Another forum user accepted this offer and received a total of 10,000 BTC in exchange for 2 pizzas.
In August of the same year, the overall market value of BTC was 1 million USD. While 1 USD corresponded to 0.5 BTC in August, BTC became equal to 1 USD on February 9th, 2011 for the first time. Once BTC crossed over this threshold, it continued to increase in value over time.
BTC receives governmental attention
In April 2013, 1 BTC was equal to 100 USD and 4 years after its launch, the value of BTC reached 10,000 USD.
As BTC exerted such a great effect, entrepreneurs began to adopt innovative methods in this direction. The most attention-grabbing innovation came from the USA. In May 2013, the first BTC ATM was put into service. This innovation would be adopted in many other locations over the years.
From 2015 onward, governments’ approach to BTC began to take shape. The United States opened an exchange market whereas Japan officially recognized and defined BTC. Such initiatives have influenced other countries. Countries such as South Korea, Switzerland and Malta took pioneering steps in regulation. On the other hand, the rise of cryptocurrencies triggered the revision of cash. For such reasons, countries such as the United States and China began efforts to issue digital currencies.
60% of the industry
In December 2017, the price of BTC reached a peak point. The momentum of the market continued and the value of BTC reached 20,089 USD.
As of September 16th, 2020, the value of 1 BTC was around 11,000 USD. The number of users exceeded millions and it began to be commonly adopted as an investment instrument. What is more, firm steps were taken to encourage its use as a payment method in everyday life. The market value of BTC was above $200 billion. The overall market value of all cryptocurrencies was around $350 billion. And the leading cryptocurrency was still dominating approximately 60% of the industry.
Having established a milestone with its flawless infrastructure since the creation of the first block, BTC maintains its well-earned position to become the currency of the future.
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