The first two milestones for cryptocurrency take place. On 18 August, the domain name bitcoin.org is registered. Then, on 31 October, the mysterious and so-called “Satoshi Nakamoto”, who designed bitcoin, publishes a paper that sets the ball rolling: Bitcoin: A peer-to-peer Electronic Cash System. The first bitcoin transaction occurs when Nakamoto sends Hal Finney, a computer programmer, 10 bitcoin (BTC) on 12 January. On 15 August, bitcoin is hacked, exposing a major vulnerability in the system. A highly unusual transaction involving 184 billion BTC is noted by bitcoin developer Jeff Garzik, who acknowledges it by saying: “We’ve had a problem here”. Later that year, the inaugural bitcoin sale takes place, enabling a monetary value to be attached to cryptocurrency for the first time. A bitcoin user swaps 10,000 coins for two pizzas. Given that 10,000 bitcoin would be worth more than £55m today, these would be the most expensive pizzas in history. Rival cryptocurrencies begin to emerge, with Litecoin, Namecoin and Swiftcoin all making their debut. Meanwhile, bitcoin is criticised after claims emerge it is being used on the so-called “dark web”, particularly on sites such as Silk Road. Proving that no publicity is bad publicity, the price of bitcoin skyrockets before crashing back down again. Cryptocurrencies begin to enter the popular consciousness, including a fictionalised trial in the third season of US drama The Good Wife, entitled Bitcoin for Dummies. Bitcoin holders fail to agree on a new rule for transactions, resulting in a bitcoin “fork” and the blockchain literally splits in two. For six hours there are two networks operating at the same time, with two different versions of transaction history, leading to an inevitable drop in value.Meanwhile, various countries are attempting to work out the best ways to deal with cryptocurrencies. Thailand bans bitcoin, declaring that trading in the cryptocurrency is illegal. Germany’s ministry of finance would not accept it as an official currency but rather as a “unit of account”, paving the way for a future framework to tax bitcoin-based transactions. The People’s Bank of China prohibits financial institutions from using bitcoins at all, prompting another drop in value. In Vancouver, Canada, the first bitcoin ATM is launched. Cryptocurrency trading exchange Mt Gox, which is based in Japan, goes offline and files for bankruptcy protection, leaving investors out of pocket. As an illustration of bitcoin’s growing popularity, Microsoft allows users to buy games with the currency. New cryptocurrencies emerge, including ethereum and coinbase (which raised $75m in a funding round, the largest amount for a bitcoin company). Bitstamp, a European based bitcoin exchange, is the victim of a security breach after being hacked, but resumes trading a few days later, assuring customers that they have not lost their funds. Cryptocurrencies continue to become more mainstream. The number of bitcoin ATMs rises from around 500 at the beginning of the year to just under 900 by the end of the year; Uber in Argentina switches to bitcoin payments, and the Swiss national railway and software website Steam are among new users accepting the currency. The DAO (decentralised autonomous organisation) is founded in May – a stateless venture capital fund on the ethereum blockchain and the largest crowdfunded project to date. It is hacked by users a month after its launch and a third of its assets are siphoned off. As a result, a “fork” takes place in Ethereum, which splits into Ethereum and Ethereum Classic. The much anticipated “Bitcoin cash hard fork” occurs, which splits bitcoin into two derivative cryptocurrencies: BTC and bitcoin cash. Japan passes a law to accept bitcoin as a legal payment method, and Skandiabanken in Norway integrates bitcoin accounts and recognises bitcoin as an investment asset and payment system. Samsung confirms it is making chips to mine coins. Various European governments join forces to cooperate on cryptocurrency regulation, and many continue to launch innovative partnerships with high-street names, including Ripple’s 2018 app launch with Santander for international money transfers. As of September 2019, there were 5,457 bitcoin ATMs worldwide. In August of that year, the countries with highest number of bitcoin ATMs were the United States, Canada, the United Kingdom, Austria, and Spain. On 2 July 2020, the Indian company 69 Shares started to quote a set of bitcoin exchange-traded products (ETP) on the Xetra trading system of the Deutsche Boerse. On 1 September 2020, the Wiener Börse listed its first 21 titles denominated in cryptocurrencies like bitcoin, including the services of real-time quotation and securities settlement. On 3 September 2020, the Frankfurt Stock Exchange admitted in its Regulated Market the quotation of the first bitcoin exchange-traded note (ETN), centrally cleared via Eurex Clearing. In October 2020, PayPal announced that it would allow its users to buy and sell bitcoin on its platform, although not to deposit or withdraw bitcoins. In June 2021, the largest bitcoin event in history Bitcoin 2021 took place in Miami, attracting approximately 15,000 bitcoin enthusiasts. On 1 June 2021, El Salvador President, Nayib Bukele announced his plans to adopt bitcoin as legal tender, this would render El Salvador the world's first country to do so.
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History & Evolution of Cryptocurrency was last modified: June 10th, 2021 by WebTech-Global
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