While Bitcoin may have experienced a chequered and occasionally difficult history, it’s now widely considered as a viable cryptocurrency and increasingly popular investment opportunity.
As a result of this, its market capitalization has continued to rise following the asset’s historic price run and subsequent crash in 2018, with this value estimated at $199.62 billion as of October 2020.
In this post, we’ll take a glance at the history of Bitcoin, while asking how it has managed to become so popular in the digital age.
What’s the History of Bitcoin?
Prior to the release of Bitcoin in 2009, there were a relatively large number of digital cash technologies launched onto the market.
The first of these were issued by David Chaum and Stefan Brands, while it was Adam Back’s so-called “hashcash” proof-of-work scheme for spam control that really laid the foundation for Bitcoin’s emergence.
Bitcoin also followed hot on the heels of Nick Szabo’s ‘bit gold’, with the iconic bitcoin.org domain officially registered on August 18th 2009. Later that year, the Internet saw the link to a paper authored by Satoshi Nakamoto, entitled ‘Bitcoin: A Peer-to-Peer Electronic Cash System’.
This laid out the precise plan for Bitcoin, detailing methods of using its innovative peer-to-peer network and the finite number of tokens in existence.
More specifically, Nakamoto’s paper explains that each Bitcoin transaction has to be verified by an anonymous and decentralised group of computers, known colloquially as ‘nodes’ and ‘miners’. In exchange for verifying individual transactions, miners receive Bitcoins as their reward.
Underpinned by blockchain technology and Nakamoto’s unique computer program, there are a total of 21 million Bitcoins available to be mined, with a little over 16.7 million in existence today.
The Anonymity of Bitcoin
Interestingly, there’s some dispute about the precise origins of Bitcoin, with Nakamoto having distanced himself from the paper and the cryptocurrency as a whole.
The man behind this pseudonym also remains a mystery, with Nakamoto’s real identity currency unknown and widely speculated on.
There appears to be good reason for this too, with experts agreeing that the discovery of Nakamoto’s identity could have a seminal impact on Bitcoin’s fundamental economics and internal politics.
It’s also believed that Nakamoto owns approximately 5% of the total Bitcoin haul at the time of writing, with stash boasting a current market value in excess of $5 billion.
In these respects, the mystery and anonymity of Bitcoin serves the cryptocurrency well, while it certainly piques the interest of investors and provides a potential safe-haven during times of economic tumult.