Bitcoin Celebrates Another Anniversary As It Reaches 14 Years

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This is a milestone that the crypto community can always look forward to. A birthday to celebrate while you’re still cleaning up after your New Year’s Eve. So get the balloons out because today is Bitcoin turning fourteen. To help you celebrate this milestone, BeInCrypto takes you on a short walk through the historical history of currency.

Bitcoin (BTC) first appeared in Satoshi Nakamoto’s Bitcoin white paper, which was first published on October 31, 2008. The paper, titled “Bitcoin: A Peer-to-Peer Electronic Cash System”, exposed the basic principles of the Bitcoin network. Namely, it was to be decentralized on a blockchain and would operate independently of any financial institution. No central bank and no central server. The anonymous programmer designed it to be moderated by the code, computers and people who used it.

Satoshi’s project also made the vast majority of the world aware of the concept of Proof-Of-Work. Which until recently was the preferred consensus mechanism for blockchain-based cryptocurrencies. The Proof-of-Work algorithm was not created by Bitcoin, as is commonly believed; it simply propelled it into the mainstream.

The concept first appeared in a 1999 academic essay by Ari Juels and Markus Jakobsson titled “Proofs of Work and Bread Pudding Protocols”. In the essay, the authors describe it as “a protocol in which a prover demonstrates to a verifier that it has expended a certain level of computational effort within a specified time interval.”

Bitcoin introduced the concept of “mining” as a competitive task and added an economic incentive in the form of a coin reward. Satoshi mined the first block of Bitcoin on January 3, 2009, less than four months after the white paper was published. Fourteen years ago this week.

The amateurs, the eccentrics and the dark web

The project took a long time to take off. It was not until May 22, 2010 that the first reported real financial transaction took place. A Florida man traded 10,000 BTC for two Papa John’s pizzas worth around $25. In this transaction, the value of one Bitcoin was around four hundred. To this day, the Bitcoin community continues to celebrate Pizza Day on May 22.

For many millions of people around the world, the first time they actually traded bitcoin would have been on the Dark Web, an area of ​​the internet designed to be free from censorship and surveillance. In this regard, Bitcoin and the Dark Web were perfect companions. While Bitcoin cannot offer true privacy (all transactions are immutable and public on its blockchain), its lack of a central authority has added a double layer of security and anonymity when used in conjunction with the browser. Dark Web, Tor.

These elements were not only to the advantage of militants and dissidents. Unsurprisingly, Bitcoin has also attracted the attention of criminal elements. Two years after Bitcoin’s first transaction, on February 11, 2011, Ross Ulbricht launched The Silk Road, the first efficient online marketplace for trading illicit substances and services. According to the US government, Bitcoin generated a total revenue of around $183 million, involving 146,946 buyers and 3,877 sellers.

Ethereum and the ICO boom

The birth of Ethereum (ETH) also marks a key turning point in Bitcoin’s lifecycle. While Naksmoto’s original currency merged two things, a digital asset management and a public blockchain, its critics say this paradigm was deeply limiting.

While Bitcoin was designed as a store of value and a method of exchange, Ethereum used smart contracts. A self-executing contract written using code that would initiate when certain prerequisites are met. Vitalik Buterin, the author of the initial Ethereum white paper, first brought the project to the world’s attention at a Bitcoin conference in Miami, Florida in 2014.

You will find #Bitcoin at the end of your crypto search. You will be annoyed to know why it took you so long.

— Dennis Parker (@Xentagz) December 26, 2018

The success of Bitcoin and Ethereum was the necessary precondition for the ICO boom of 2017. The name is given to an explosion of tech startups that would issue new digital currencies to help fund their development. None of these projects, nor any of the so-called “Ethereum killers,” would come close to the success of Bitcoin itself. On February 1, 2017, before the ICO boom really took effect, Bitcoin dominance stood at 96%. (Bitcoin dominance refers to the coin’s current share of the global crypto market.)

At the start of 2018, Bitcoin dominance was at an all-time high of 38%. While investors balked at the mass of scamcoins and shitcoins, people have returned to bitcoin in droves. The prevailing sentiment was that no other coin could compete with Bitcoin’s proven value offering.

Bitcoin on the moon?

There have been other projects that took the structure of Bitcoin and built on it. One of the most renowned that does not allow smart contracts is ZCASH (ZEC). A payment cryptocurrency that takes the fundamentals of Bitcoin but adds an optional privacy layer. Despite the innovations and thousands and thousands of “altcoins”, the health and price of Bitcoin is still used as a metric for the broader cryptocurrency market. Altcoins often track the value of their predecessor and, along with USD, are the primary method of measuring the price of a cryptocurrency.

BTC reached its ATH (or all-time high) in November 2021, at the end of that year’s bull run. Despite falling 76% in just over a year, people are still stubbornly optimistic about Bitcoin’s ability to replace fiat currency and hit new ATHs. In the fourteen years since its first edition, it has spawned an active community of backers that would make even the most popular sports teams blush. Twitter co-founder and former CEO Jack Dorsey said he believes “the world will eventually have a single currency, the internet will have a single currency.” I personally believe it will be Bitcoin.

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