The history of cryptocurrency dates back to ancient times when the legendary Satoshi Nakamoto, along with an army of programmers, began working on a revolutionary invention… Wait, that's a bit exaggerated.
A beginning worthy of a fantasy novel about cryptocurrency, right? In this story, there are indeed several intriguing facts that remain unexplained to this day, but they can be told in a simple, straightforward way. It is true that virtual coins, and later cryptocurrencies, have been known to humanity for over twenty years, contrary to the common belief that digital money is a recent phenomenon.
In fact, the history of cryptocurrency began in 1998 when a certain Wei Dai proposed the creation of virtual b-money and presented its technical assumptions on a cyberpunk mailing list. Unfortunately, the project never saw the light of day, but it laid a solid foundation for innovative ideas. About 10 years later, on October 31, 2008, the so-called white paper (manifest) titled Bitcoin: A Peer-to-Peer Electronic Cash System appeared on the internet. Besides the technical assumptions presented by Wei Dai, this manifesto also introduced a vast array of other solutions.
At this point, a legendary person (or group of people) appears, whose pseudonym has not only sounded but still sounds to this day as “Satoshi Nakamoto”. The mysterious Satoshi was not only the author of the manifesto but is also considered the father-founder of the Bitcoin cryptocurrency. The solutions described in the white paper were quickly implemented, and on January 3, 2009, Nakamoto’s group launched the Bitcoin network and mined the first transaction block, called the genesis block. Later, the first version of the Bitcoin wallet—Bitcoin Core—was released. Nakamoto maintained contact with members of the mailing group for a short period but soon cut off all external contacts. The reason? In April 2011, one of the programmers involved in the Bitcoin network—Gavin Andersen—was asked to speak with the US CIA intelligence agency. After this incident, many claimed to have uncovered Satoshi’s hidden identity, and some even impersonated him, but the true owner of the mysterious pseudonym has never been revealed.
What’s next for Bitcoin?
Since its appearance on the market, Bitcoin has been gaining increasing popularity and attracting more and more curious internet users. In October 2009, the exchange rate of Bitcoin to the dollar was established (1 USD = 1309 BTC) based on the electricity required to mine the currency. With the current Bitcoin rate, a holder of 1309 BTC today would be a multimillionaire. Returning to the story, in February 2010, the first Bitcoin exchange called Bitcoin Market was established.
Shortly after, the first transaction using Bitcoin took place. An online forum post by Laszlo Hanyecz offered 10,000 BTC in exchange for bringing two pizzas to his house. Of course, shortly after, someone accepted the offer, and today, that person is probably a millionaire. Unless he immediately sold the earned Bitcoin for a small profit of $20. From that moment, interest in digital currency only grew. Unfortunately, not everything was rosy, and as is often the case in markets, scammers and thieves appeared. This was the case with one of the largest Bitcoin exchanges, Mt. Gox, which, a few years after its market debut, was used to steal from its customers.
More and more people became so-called miners, responsible for “mining” Bitcoin, creating new information blocks. It turned into a quite profitable business, initially using graphics cards, then specialized chips that, thanks to computational power, enabled rapid mining. As a result, the electricity consumption for maintaining the network of blocks in 2018 could be compared to the energy usage of an average European country.
Bitcoin as a means of payment
Shortly after gaining widespread attention, Bitcoin began to be accepted as a means of payment in some online stores. One of the first was Grass Hill Alpacas, where customers could purchase socks made from alpaca wool. Sometimes, it is the alpaca that is considered the mascot of Bitcoin. Alongside online shops, Bitcoin also started to be accepted by hotels, restaurants, and other service providers. Unfortunately, the cryptocurrency payment method was quickly regulated by governments, sometimes resulting in a ban on BTC payments.
Such regulations also exist in Poland; to the disappointment of some investors, Bitcoin is not a fully recognized, acceptable means of payment in our country. Will this change? Perhaps in Poland and many other countries—not only in Europe but worldwide—cryptocurrencies will be accepted as a means of payment. For now, the only country that allows Bitcoin payments as a legitimate currency is El Salvador in North America.
