A brief history of Planet Bitcoin - 21 August 2015

Friday 21 August 2015

I’m on holiday this week, so no market report and news round up. Instead, I thought I’d give an overview of bitcoin’s brief but spectacular history. This is necessarily selective, but if you'd like to know more, do take a look at the very comprehensive HistoryOfBitcoin.org.

Not Satoshi

If there's one guy we can be sure is not Satoshi Nakamoto, it's (Dorian) Satoshi Nakamoto.

November 2008. Anonymous developer Satoshi Nakamoto publishes the white paper, Bitcoin: A Peer-to-Peer Electronic Cash System, detailing a trustless and decentralised currency. Previously, no one had found a way of sending money over the internet without relying on a central party to approve and record transactions, because there was no way of proving that a file signifying funds hadn’t been copied and retained by the sender (the so-called double-spend problem).

3 January 2009. Satoshi Nakamoto mines the first block (the Genesis block). Several people were involved in the early days, but Nakamoto mined the vast majority of blocks. In fact, he is estimated to have mined around 1 million blocks over the course of the next three years, before stepping back, saying he had ‘moved on to other things’. His identity remains unknown to this day.

22 May 2010. Laszlo Hanyecz pays another BitcoinTalk forum user 10,000 BTC for two pizzas from Papa John’s. At around $25, that put the exchange rate at around 2.5 cents per bitcoin. Three and a half years later, those 10,000 bitcoins would be worth $10 million.

July 2010. The world’s first bitcoin exchange, MtGox, launches. The name is from the previous use of the domain, as a trading site for Magic: The Gathering [Online eXchange] cards. Created by Jed McCaleb, who later worked on Ripple and Stellar, it was sold to Mark Karpeles in March 2011.

February 2011. Bitcoin reaches $1 each.

May 2011. BitPay launches, providing bitcoin payment processing for merchants. By 2014 they will be processing over $1 million of payments daily.

August 2012. Pirateat40 absconds with over $5 million of bitcoins in the Bitcoin Savings and Trust ponzi scam.

12 March 2013. Bitcoin network ‘forks’ after a miner running version 0.8.0 of the bitcoin software creates an invalid block, which is accepted by others running 0.8.0 but not older versions. The fork is resolved by miners reverting to 0.7.0.

October 2013. The Silk Road, the darkweb drugs marketplace that accepted bitcoins as payment, was shut down by FBI agents. Ross Ulbricht is later arrested and sentenced to life in prison without parole for running the site.

November 2013. Bitcoin reaches a high of around $1,200 on MtGox, driven partly by Chinese speculators as well as likely manipulation by MtGox itself (the ‘Willy’ bot).

February 2014. MtGox ceases trading after months of problems. 850,000 bitcoins are found to be missing, with a value at the time of over $450 million. (200,000 are later ‘found’ in a so-called ‘old format’ wallet.) In August 2015 Mark Karpeles is arrested by Japanese police for making fraudulent alterations to the database to make it appear that the exchange was in a better position financially than it really was.

March 2014. Newsweek reporter Leah McGrath Goodman claims she has found Satoshi Nakamoto - a California-based engineer called Dorian Prentice Satoshi Nakamoto. This was denied by both Dorian Nakamoto and apparently the real Satoshi Nakamoto, who surfaced for the first time in three years to publish a brief statement on his P2P Foundation page: 'I am not Dorian Nakamoto.'

June 2015. The BitLicense - New York regulator Benjamin Lawsky’s framework for bitcoin businesses - launches to ambivalent reception. It will likely pave the way for wider regulatory engagement in the US.

These are just some of the major milestones in bitcoin’s history. Do you have a favourite fact or milestone you remember? Get in touch and let us know!

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