The Bitcoin White Paper 10 Years On: How the Coin Evolved
Satoshi Nakamoto’s white paper on Bitcoin came out a decade ago, presenting to the world the idea of a cryptography-based payment system.
Satoshi Nakamoto’s white paper, “Bitcoin - a Peer-to-Peer Electronic Cash System,” was published exactly 10 years ago, opening the door to an age of viable digital assets based on cryptography. Bitcoin was the first implementation of a cryptographically protected approach to payment processing, the aim being to displace traditional banking and ensuring a trustless but also secure transfer of funds.
It took a decade and multiple steps to get to the point where Bitcoin is a legitimately traded asset (currently at above $6,300), and there is an entire ecosystem of new assets pursuing wider recognition. Bitcoin went through several phases, with growth being a constant theme in all aspects of the coin.
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Since the inception, Bitcoin and its network have gone through several stages of evolution.
2009-2011: Early adopters of the coin grew rapidly in number as mining spread from a handful of computers to a wider network. Bitcoin was the sole cryptocurrency and was going through a testing stage. At that point, price discovery was just beginning, and 10,000 Bitcoin for a pizza in May 2010 looked like a fair price. In 2010, the coin saw its first exchange listing and a market against the dollar, immediately jumping in price to about $1. Enthusiasts, cryptographers, and speculators started to discover Bitcoin.
2011-2013: This was the time when altcoins started to proliferate, using the Bitcoin code with some modifications. This period contained a pivotal moment for Bitcoin, one that would haunt the community for years - the spreading influence of the Silk Road, the first Bitcoin-fueled marketplace. Ross Ulbricht, known as Dread Pirate Roberts, is now serving two life sentences plus 40 years without right to parole. In those years, Bitcoin gained influence, and its price quickly rose, with Mt. Gox being the central exchange.
2013-2016: After the demise of Mt. Gox, which collapsed in December 2013, Bitcoin slid from then-stunning prices of above $1,300 and would hover under $1,000 for a long time. A crypto ice age descended, and prices plunged as low as $100. It was during this time that the Bear Whale sold 30,000 Bitcoin in a capitulation move, which immediately revived the price, making it rise again to $300. Still, those years were not without growth - from 2013 onward, the ASIC race began, and Bitcoin mining turned into a competitive sport. Mining farms displaced amateur miners.
2016 until today: This Bitcoin era saw crypto assets go mainstream in earnest. In 2016, there were signs of the markets getting more active, with new exchanges proliferating. Scams and schemes had always accompanied Bitcoin, but from 2016 onward, a new brand of Ponzi schemes took aim at the asset. BitConnect, the iconic crypto-lending scheme, spread like wildfire and was actually successful, especially as Bitcoin prices kept rising. This was the era of initial coin offering (ICO) proliferation.
Questions abound when it comes to the future of Bitcoin. Will institutional investors take the plunge? Will there be another ice age as the global economy exits the boom cycle and cools down, curbing appetite for risk? It is difficult to say, but the ideas of owning one’s wealth, applied cryptography, and emerging technologies of wealth transfer are already becoming accepted.
A decade into the game, Bitcoin has yet to be displaced by any of the thousands of altcoins and tokens and remains the largest network of nodes and mining operators. In terms of trading, it is still the basis of price discovery for many digital assets. As it heads into its second decade, Bitcoin is bound to stick around in one form or another.