Ten years have passed since the publication of the white paper on bitcoin. Since then, the world has witnessed the ups and downs of the cryptocurrency. Both supporters and opponents recognize the impact of bitcoin.
The cryptocurrency was created by Satoshi Nakamoto, whose identity has never been confirmed. On October 31, 2008, via a cryptography mailing list, he published a white paper entitled “Bitcoin: A-Peer-to-Peer Electronic Cash System.” In it he presents the p2p network as ‘a system of electronic transactions that is not based on mutual trust’. The introduction of bitcoin came not long after the bankruptcy of financial services firm Lehman Brothers. Nakamoto suggested bitcoin as an option to avoid hyperinflation. The system does not require a third party to be responsible for creating and distributing the currency.
On January 9, 2009, bitcoin’s first open source client went online. It is still hosted on SourceForge. One of the first supporters, Hal Finney, downloaded the software right on that day. Three days later, he got ten bitcoins from the first transaction with Nakamoto. The value was negotiated among cryptominers in the first days. According to Wired, about ten thousand bitcoins were good for two pizzas from the American pizza restaurant Papa John’s at the time.
As mining increased, it soon became apparent that the system was not as watertight as thought. A security vulnerability was found on August 6, 2010. This leak prevented transactions from being properly verified before entering the blockchain. This allowed users to determine the number of bitcoins that the transaction yielded. The leak yielded two addresses a total of 184 billion bitcoins. On August 15, Nakamoto posted a warning about unsafe transactions on SourceForge. Not long after, the transactions of 184 billion were erased. Later that year, in December, Nakamoto withdrew from the crypto mining community.
In mid-2016, Australian Craig Wright claimed to be the creator of bitcoin. Ultimately, there was too little evidence for his claim, and Wright declined to cooperate with further investigations. In February of this year, Wright was sued by the brother of a former bitcoin business partner for embezzlement. The lawsuit is still pending.
It is undisputed that bitcoin has had a major impact on the world of fintech, but its success is questioned. The actual use of the cryptocurrency for making purchases seems limited and there is also growing criticism of the energy it takes to keep the system running. Due to a large increase in the value of bitcoin last year, miners also bought GPUs en masse, causing a shortage of video cards, much to the frustration of gamers.
At its peak, a bitcoin was worth $19,100. Unfortunately for the miners, the increase was short-lived. Between December 2017 and February 2018, the value plummeted by $13,000. At the time of writing, the value of a bitcoin is 5511 euros.