Bitcoin turns five. Via Flickr/Will Clayton
Five years ago, some dude, Satoshi Nakamoto, started mining the first bitcoins—or group of dudes or even some government agency. We still don’t know. We do know that the vision has lived on, endured, and is beginning to blossom in wild and unexpected ways.
What started out as an idea, a manifesto of sorts, the infamous white paper, has evolved into a multi-billion dollar ecosystem with just over 12 million coins in circulation. At first the plaything of deep web hackers and crypto-anarchists, it has caught the attention of government leaders, Wall Street, and mainstream consciousness.
Depending on who you ask, it’s either a currency or a commodity; a technology or an ideology; a clever swindle or the Next Big Thing. But Bitcoin is not defined by its price, whether it goes to $100,000 or crashes back to zero. It’s measured by the milestones it has already achieved, which are plenty in just a short half decade.
On January 3, 2009, Satoshi Nakamoto mines Block 0, aptly dubbed the Genesis Block. The Bitcoin network is born, an ingenious amalgamation of cryptography, peer-to-peer technology, and open-source economics. Satoshi has created the first digital currency that lives and breathes on the internet, is self-sustaining, and lives outside the control of any government.
The so-called blockchain, the decentralized ledger that records all transactions, is a nifty bit of innovation. By solving the Two Generals’ Problem, we can now trust each other on the network without a central authority to clear consensus using proof-of-work. The end result is something that looks sort of like digital gold, a way to make cash-like transactions online.
- January 12, 2009—First Bitcoin transaction: Satoshi sends 10 BTC to crypto-activist Hal Finney.
- October 5, 2009—First exchange rate established: 1 USD is worth 1,392.33 BTC, according to the New Liberty Standard.
- May 22, 2010—Someone buys two pizzas for 10,000 BTC: At todays rates, those pizzas cost over $8 million.
- November 6, 2010—Bitcoin economy surpasses $1 million: Value of bitcoins reaches $0.50 on the Mt. Gox exchange.
- June 1, 2011—Gizmodo uncovers the Silk Road: Adrien Chen informs everyone that we can buy drugs online using bitcoins. Though the association puts Bitcoin in a negative light, the ensuing media attention helps push the value of bitcoins to over $30.
- June 8, 2011—First bubble pops: The rollercoaster ride is now official. Bitcoin prices crash after reaching a high of $31.91. By November, they’re worth about $2 each.
- September 27, 2012—The Bitcoin Foundation is formed: The non-profit organization aims to standardize the technology.
- January 31, 2013—The first ASICs are shipped: These specially designed chips for Bitcoin mining or the proverbial shovels for the digital gold rush. Check out Motherboard’s interview with Yifu Guo, the creator of the first consumer ASIC system, which can essentially print money from the comfort of your home. A mining rig sells for $20,000 on Ebay, 13 times the retail price.
- March 12, 2013—The blockchain forks: A botched software upgrade brings the burgeoning ecosystem to a crashing halt. Bitcoin weathers the storm.
- March 18, 2013—FinCEN releases virtual currency guidance: Regulators acknowledge Bitcoin’s growing relevance by issuing guidance to clarify their stance on digital currencies including Bitcoin.
- March 19, 2013—EU authorities seize Cyprus banking deposits: The fiasco causes a surge in Bitcoin interest. Governments can’t seize your digital wallet, proclaim crypto-believers. The price of bitcoins break $50.
- March 28, 2013—Bitcoin breaks $1 billion: The price continues to skyrocket as a new bubble rapidly inflates.
- April 10, 2013—Second bubble pops: Bitcoin reaches a high of $266 on Mt. Gox before crashing back to earth on the back of hack attacks and exchange downtime.
- May 7, 2013—Bitcoin catches the eyes of Silicon Valley: Coinbase raises $5 million from Union Square Ventures. It will raise an additional $25 million later in the year from Andreessen Horowitz.
- May 14, 2013—Feds seize Bitcoin funds: A regulatory first strike, the Department of Homeland Security investigates Mt. Gox, then the largest exchange by volume in the world for illegally operating as a money transmitter without proper licenses. Authorities seize funds and shut down a key source of US funding.
- May 17, 2013—First official Bitcoin conference in San Jose: Bitcoin grows up and celebrates with special guests, the Winklevoss twins.
- October 2, 2013—Feds shut down the Silk Road: Authorities seize over 170,000 BTC and charge 29-year old Ross Ulbricht, known on the dark web as Dead Pirate Roberts, with drug trafficking conspiracy, computer-related fraud, and conspiracy to launder money.
- October 15, 2013—China gets Bitcoin fever: Coinciding with a wave of pro-Bitcoin press from state-sponsored media, Baidu, China’s Google announces that it will accept Bitcoin. Along with getting a boost from the US government shutdown, bitcoin prices begin to surge.
- November 11, 2013—Researchers claim Bitcoin is “broken”: Cornell researchers release a 17-page report detailing an alleged flaw in the system.
- November 19, 2013—First Congressional hearing on Bitcoin: It’s surprisingly positive.
- November 21, 2013—First university accepts bitcoin: Cyprus University becomes the first school in the world to accept bitcoin as tuition.
- November 27, 2013—Bitcoin breaks $1,000: The entire ecosystem is worth over $10 billion. In the coming days, the price of one bitcoin is worth roughly one ounce of gold.
- December 18, 2013—Third bubble pops: China cracks down on Bitcoin, essentially shutting it out of the country sending prices tumbling to a low of nearly $300 after reaching a high of over $1,200. Days earlier, Dogecoin is launched, the first cryptocurrency based on an internet meme.
- December 20, 2013—Governments react: Nations and institutions around the world weigh in.
- January 3, 2013—Bitcoin turns five: Overstock.com has announced that it will accept bitcoins later in the year. Wall Street is hiring a Bitcoin trader. The price of bitcoins has rebounded to over $800.