Introduction
Bitcoin is a
decentralized digital currency. Its abbreviation is BTC and sign
is: ₿. It is
a compound of the words bit and coin.
The cryptocurrency was invented in 2008 by an unknown person or group
of people using the name Satoshi Nakamoto. The legality of bitcoin varies
by region. Nine countries have fully banned bitcoin use, while a further
fifteen have implicitly banned it.
Historical Timeline of Bitcoin
On 18 August 2008, domain of bitcoin.org was
registered. On 31 October 2008, a paper titled Bitcoin was published
by Satoshi Nakamoto. Bitcoin is A Purely Peer-to-Peer Electronic Cash System
which would allow online payments to be sent directly from one party to
another without going through a financial institution.
Nakamoto applied the bitcoin software as open-source code and the software was released in January
2009. However, the identity of Nakamoto's still remains unknown.
The Wall Street Journal, The Oxford English Dictionary and The Chronicle of Higher Education support the use of bitcoin. However, till now no uniform convention for bitcoin capitalization exists.
The receiver of the first bitcoin transaction
was Hal Finney on 12 January 2009. He downloaded the bitcoin software on its release date,
and received ten bitcoins from Nakamoto. In 2010, the first known commercial
transaction using bitcoin was carried out by a
programmer Laszlo Hanyecz when he bought two Papa John's pizzas for ₿10,000 from Jeremy Sturdivant.
Blockchain analysts believed that when Satoshi
Nakamoto handed over the network alert key and control of the code repository
to Gavin Andresen, he had mined about one
million bitcoins before disappearing in 2010.
The reference implementation Bitcoin-Qt
version 0.5.0 was released on 1 November 2011 and It introduced a frontend that used the Qt user interface toolkit. In this software the developers switched from Berkeley
DB to LevelDB version 0.8 for database management in order to reduce blockchain synchronization time. The software was renamed to Bitcoin
Core from version 0.9.0.
In March 2013 the blockchain temporarily
split into two independent chains with different rules due to a bug in version
0.8 of the bitcoin software. Normal operation was restored after the majority
of the network downgraded to version 0.7 of the bitcoin software.
On 15 May 2013, US authorities seized accounts
associated with Mt. Gox exchage due to not registered as a money
transmitter with FinCEN in the US. On 23 June 2013, the US Drug
Enforcement Administration listed ₿11.02 as a seized asset in a United States
Department of Justice seizure notice. This marked the first time a
government agency had seized bitcoin.
On 5 December 2013, the People's Bank of China imposed
restrictions on Chinese financial institutions from using bitcoin. On 30 July
2014, the Wikimedia Foundation started accepting donations of
bitcoin.
On 16 February 2015, the software version 0.10 was
made available to public which introduced a consensus library that gave
programmers easy access to the rules governing consensus on the
network. In 2015, prices rose to $434 for the year and climbed up to $998 by 1
January 2017.
In version 0.11.2 developers added a new feature that
allowed transactions to be made unspendable until a specific time in the
future. On 15 April 2016, Bitcoin Core 0.12.1 was released, and enabled
multiple soft forks to occur simultaneously. On 23 August 2016, Bitcoin
Core 0.13.0 was released.
In August 2016, the Bitfinex cryptocurrency exchange
platform was hacked and
₿119,756, worth
about $72 million at the time, were stolen.
In October 2016, Bitcoin Core's 0.13.1 release
featured the "Segwit" (Segregated Witness) soft fork. On 15 July 2017, the SegWit software upgrade
was approved ("locked-in"). Segwit was intended to support the Lightning
Network as well as improve scalability. The bitcoin price rose almost 50%
in the week following SegWit's approval i.e bitcoin was trading at $2,748 on 21
July 2017 which rose up 52% of $1,835 on 14 July 2017 and further rose to its
all-time high of $19,783.06 on 17 December 2017.
On 1 February 2018 China completely
banned trading in bitcoin and its prices then fell from $9,052 to $6,914 because
the percentage of bitcoin trading in the Chinese renminbi fell from
over 90% in to less than 1% till June 2018. This resultantly the price on 1
January 2019 was $3,747, down 72% for 2018 and down 81% since the all-time high.
Several hacks or thefts from cryptocurrency exchanges
like thefts from Coincheck in January 2018, Bithumb in
June, and Bancor in July negatively affected the Bitcoin prices. It was
reported that $761 million worth of cryptocurrencies were stolen from exchanges
in first six months of 2018.
In February 2019, Quadriga Fintech Solutions a Canadian
cryptocurrency exchange found with approximately $200 million missing.
In September 2019 the Intercontinental Exchange (the
owner of the NYSE) started trading of bitcoin futures on its exchange
called Bakkt. On the other hand, in December 2019, YouTube removed
bitcoin and cryptocurrency related videos, but late on You Tube restored the
content after judging they had "made the wrong call".
The year 2020 was the year of
major development since the launch of Bitcoin. Here the few are:-
MicroStrategy invested $250 million in bitcoin
as a treasury reserve asset in August 2020.
Square, Inc. placed approximately 1% of total
assets ($50 million) in bitcoin in October 2020.
PayPal announced that US users could buy, hold,
or sell bitcoin in November 2020.
On 30 November 2020, the bitcoin value rose to a new
all-time high of $19,860, topping the previous high of December 2017.
In December 2020 Alexander Vinnik, founder of BTC-e,
was convicted and sentenced to five years in prison for money laundering in
France while refusing to testify during his trial.
Massachusetts Mutual Life Insurance Company announced
a bitcoin purchase of US$100 million, or roughly 0.04% of its general investment
account in December 2020.
On 19 January 2021, the price to briefly rise
about $5,000 in an hour to $37,299 when Elon Musk placed the handle #Bitcoin in
his Twitter profile, tweeting "In retrospect, it was
inevitable". On 8 February 2021 its price pushed to $44,141 when
Tesla's announced purchase of bitcoin of US$1.5 billion and also plan to
start accepting bitcoin as payment for vehicles. On 12 May 2021 just after
49 days of accepting the digital currency, Tesla reversed its decision, saying
they would no longer take bitcoin due to concerns that "mining" the
cryptocurrency was contributing to the consumption of fossil fuels and climate
change. On 13 May 2021, this resulted the dropping in the price of bitcoin
around 12%.
The price for bitcoin rose when Musk suggested that "Tesla
would resume accepting bitcoin" if bitcoin mining reaches, and trends
above 50 percent renewable energy usage. Furthermore, he suggested that Tesla
could possibly help bitcoin miners switch to renewable energy in the future.
In September 2021, alongside
the US dollar, Bitcoin in El Salvador became legal tender.
In November 2021, an upgrade the Taproot network
software was activated, which included support for Schnorr signatures,
improved functionality of Smart contracts and Lightning Network.
On 16 October 2021, the US SEC approved
the ProShares Bitcoin Strategy ETF (a cash-settled futures exchange-traded
fund). On 19 October 2021, the first bitcoin ETF in the United States gained around
5% on its first trading day.
On 25 March 2022, the big announcement
comes out when Russian head of the committee on energy Mr. Pavel Zavalny stated
that Russia might accept bitcoin for payment for oil and gas exports. It was in
response to sanctions stemming from the 2022 Russian invasion of Ukraine.
On 27 April 2022 Central
African Republic alongside the CFA franc adopted bitcoin as legal
tender.
On May 10, 2022, UST stablecoin experiment
named Terra collapse which resulted in fall of bitcoin price to $31,324, this
down was more than 50% since the November 2021 high. By June 13, 2022, the
bitcoin price falling below $20,000 when the Celsius Network (a decentralized
finance loan company) halted withdrawals.