The Bitcoin timeline has been updated for 2019.
It’s been over ten years since the beginning of Bitcoin (BTC). Here are some notable events, both good and bad, that tell the story of Bitcoin and other major cryptocurrencies.
Before Bitcoin: B-Money and BitGold (1998)
Bitcoin is often called the first cryptocurrency, but that’s not exactly true. To understand bitcoin’s history, we need to go further back in time.
Ten years before bitcoin was launched, a cryptographer called Wei Dai came up with b-money; an “anonymous, distributed electronic cash system.” Bitcoin’s founder Satoshi Nakamoto even referenced b-money in the famous bitcoin whitepaper.
Nick Szabo came up with a similar idea – Bit Gold – which lay the groundwork for blockchain: the technology underlying bitcoin.
Bitcoin Whitepaper Release (October 31, 2008)
Satoshi Nakamoto published the Bitcoin whitepaper on an obscure cryptography mailing list in 2008. The whitepaper proposed a new system for finance that replaced the role of banks and third-party payment processors:
“A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.”
Bitcoin Genesis Block Mined (January 3, 2009)
Satoshi Nakamoto mined the original Genesis Block (also referred to as Block 0) on a modest computer without any competition from other miners. The original block contained 50 BTC that can’t be spent. It’s unknown whether this was by design or a programming accident.
The Genesis Block also contained a message written by Satoshi: “The Times 03/Jan/2009 Chancellor on brink of the second bailout for banks.” The message is a timestamp, referring to a newspaper headline on January 3rd. It’s also a hint at Satoshi’s mistrust of the financial system.
To this day, people send donations to the Genesis Address: 1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa.
The next block, Block 1, wasn’t mined until six days later, on January 9. Today, each block only takes around ten minutes to mine.
Bitcoin Pizza (May 22, 2010)
Yes, Laszlo Hanyecz is the man who once paid 10,000 BTC for two Papa John’s pizzas. He arranged the deal via Bitcoin Talk, a popular online forum for discussing blockchain and cryptocurrencies.
Sure, BTC didn’t have much value back then, but prices skyrocketed afterward. What if Hanyecz had kept the BTC and decided not to buy the pizza with it? At BTC’s all-time high, Hanyecz would have had the equivalent of almost $200 million. Now, Bitcoin Pizza Day has become an annual celebration.
Mt. Gox Established (July 2010) and Hacked (2011 to 2013)
Mt. Gox was one of the world’s first cryptocurrency exchanges. At one point, it handled more than 70% of all BTC transactions making it the biggest in the world. In 2011, though, it made headlines for a large-scale hack. Experts believe this was probably caused by a compromised computer belonging to an auditor of the company. Mt. Gox’s hot wallet private keys were stolen from a wallet.dat file.
By the time of its collapse in 2014, an estimated 850,000 BTC had been stolen from Mt. Gox. This massive failure demonstrated the need to improving wallet and exchange security. Major improvements would be made in the coming years to prevent such issues from happening on other exchanges, but we have also seen much larger hacks since then.
The Silk Road Launches (February 2011)
The Silk Road was an infamous marketplace on the dark web. It was created by Ross Ulbricht with a utopian vision: “People should have the right to buy and sell whatever they wanted so long as they weren’t hurting anyone else.” But it quickly descended into a hub for criminals and drug dealers. Users could buy drugs, fake documents, and all sorts of things with BTC.
In June 2011, Gawker published an article about Silk Road, drawing mainstream attention to the site. A major investigation launched in a bid to shut it down.
Further reading: The Silk Road: A Story of Bitcoin, Drugs, and the Dark Web
The First Bitcoin Fork – Litecoin is Born (October 2011)
Today, Bitcoin forks are abundant. However, this wasn’t always the case. Back in 2011, Litecoin became the first fork of the Bitcoin core client. Various forks have been created since then in order to improve upon the design of Bitcoin.
Many argued (and still argue) that BTC wasn’t scalable and had become a digital asset, losing the initial goal of becoming a truly global digital currency.
The trend of using “Bitcoin” in the name of Bitcoin-forked cryptocurrencies didn’t really take off until after the launch of Bitcoin Classic in February 2016. Even though Bitcoin Classic ultimately failed and ceased operations, several new forks with the name “Bitcoin” would soon follow. Bitcoin Classic, Bitcoin Gold, Bitcoin Private, and Bitcoin SV are just a few examples.
Coinbase Launches (June 2012)
When Coinbase first launched, there were very few options for trading fiat-to-crypto on the market. By working with legislative officials in various jurisdictions throughout the world, Coinbase helped the growth of cryptocurrency and turn around its negative reputation. The company also established a number of partnerships and integrations with banks, making it one of the most accessible cryptocurrency exchanges in the world.
The company does still use centralized technologies, but some view it as an essential on-ramp to a decentralized ecosystem. In 2017, the company earned $1 billion in revenue. As of October 2018, Coinbase has a valuation of $8 billion. This is a massive upward trajectory, considering that the exchange was only valued at around $1.7 billion back in mid-2017 after Series D funding.
Ripple Founded (September 2012)
While Bitcoin remains the largest and most well-known cryptocurrency, others began to emerge in 2011 and 2012. One such project was Ripple, founded when Jed McCaleb, Chris Larsen, and Arthur Britto took over Ryan Fugger’s RipplePay project.
Ripple was founded to revolutionize the global remittances industry in order to replace older systems like SWIFT. Compared to Bitcoin, Ripple is more centralized. However, it also showed the capabilities of a more scalable blockchain.
Ripple has since partnered with major banks like the Bank of America Merrill Lynch, Canadian Imperial Bank of Commerce, Mitsubishi UFJ Financial Group, Royal Bank of Canada, Commonwealth Bank of Australia, and more. As of December 2018, XRP is the second-ranked cryptocurrency by market cap and can handle 1,500 transactions per second.
First Bitcoin Halving Event (November 2012)
Bitcoin miners are rewarded with BTC for processing transactions and keeping the network running. When Bitcoin launched, miners were rewarded 50 BTC for every block. But after every 210,000 blocks are mined, there is a halving event. As the name suggests, the mining reward is reduced by half.
The first of these occurred in November 2012, cutting the reward from 50 BTC to 25 BTC. The second halving event occurred in July 2016. The third event is scheduled for May 2020, barring any major changes in the mining hash rate.
At that time, the reward will drop from 12.5 BTC to 6.25 BTC. Will this discourage miners from mining BTC? So far the answer has been “no”, but it will be interesting to see what happens in 2020.
Cyprus Bail-in (March 2013)
When banks confiscated people’s funds in wake of the Cyprus financial crisis of 2013, bitcoin gained a lot of momentum. This event also helped spark new interest in cryptocurrencies, in general, as a way to safeguard against corruption and economic downturns.
Since then, Bitcoin and other cryptocurrencies have gained adoption in similar events. One example is the massive Venezuelan bolívar hyperinflation, which began in November 2016.
Silk Road Shut Down, Founder Jailed for Life (October 2013)
After two years of investigation, the FBI shut down Silk Road in 2013. Founder Ross Ulbricht was arrested in a San Francisco library. He was later sentenced to a double life sentence, plus 40 years, without parole.
Soon after, Silk Road 2.0 emerged. That, too, was shut down in November 2014 by the FBI and Europol. The US government sold the BTC seized during the 2013 shutdown at a price of an estimated $334 each in a series of auctions in 2014 and 2015, making a total of around $48 million in profits.
Vitalik Buterin Writes Ethereum Whitepaper (November 2013)
Ethereum’s blockchain introduced new functionalities, previously unavailable with Bitcoin. For example, the project was the first to implement smart contracts. It also introduced a platform for other blockchain projects to create their own tokens and build additional functionalities on top of the Ethereum blockchain. This led to the rise of token sales, and a new generation of fundraising. In late 2018, ETH is the third-ranked cryptocurrency by market cap.
Satoshi Nakamoto Found? (March 2014)
Newsweek published a huge expose, claiming Dorian Nakamoto – an elderly computer engineer in California – was Bitcoin’s elusive creator. Nakamoto denies any knowledge of bitcoin. The hunt continues.
Read more: 24 Clues About Satoshi Nakamoto’s Identity
Microsoft Adopts Crypto (December 11, 2014)
Nowadays, a slew of major companies accept BTC and other cryptocurrencies as forms of payment. When Microsoft decided to start accepting BTC back in 2014, though, this wasn’t the case. The fact that one of the largest companies in the world made this move helped drive mass adoption a step forward and show that crypto had the potential to be used for major transactions. When the company added this possibility it was a surprise to nearly everyone. Since that time, Microsoft customers have been able to use BTC to buy apps, games and videos from its Windows, Windows Phone and Xbox platforms.
BitLicense Established (June 2015)
When it comes to cryptocurrency regulations, the establishment of BitLicense has been one of the most impactful to date. The New York State Department of Financial Services (NYDFS) gave companies only 45 days to apply and required them to pay a $5,000 non-refundable application fee.
With the passage of this law, crypto-related companies operating in New York state are now required to complete balance sheet updates, cash flow statements, data on profit and loss, earnings and asset holdings. They also must pass annual audits. As a result of these regulations, some crypto-related businesses (i.e. Kraken and ShapeShift) shut down operations in the state of New York and haven’t returned since.
Mt. Gox CEO Arrested (August 1, 2015)
Mark Karpeles, CEO of the disgraced Mt. Gox exchange was arrested on suspicion of embezzlement and fraud. He was charged with personally handling funds of the exchange’s client’s accounts.
Winklevoss Twins Launch Gemini Exchange (October 2015)
The Winklevoss twins, who are rumored to own 1% of all bitcoin supply, launch a regulated bitcoin exchange, complete with FDIC insurance. The twins were among the first to take a cautious and regulatory approach to cryptocurrency trading.
Bitfinex Hacked (August 2016)
Almost 120,000 bitcoins were stolen in the hack. At the time, Bitfinex was the largest cryptocurrency exchange by volume. It triggered a 20% drop in bitcoin price.
The DAO Fails (2016)
The DAO (decentralized autonomous organization) aimed to create a new type of organization without the need for a board of directors. In 2018 and beyond, many projects have implemented their own DAOs to realize the original vision of this project.
However, The DAO is quite possibly the most disappointing endeavor in the history of crypto. Launching a crowd-sale that began in April 2016, The DAO suffered from a major hack caused by a security vulnerability during that summer. Around one-third of the ether that had been committed to the project was stolen. To make matters worse, the SEC ruled that DAO tokens were securities in 2017.
First Bitcoin Exchange-Traded Fund (ETF) Rejected (March 2017)
The Winklevoss twins return, this time with an ETF proposal. An ETF is an investment tool used by millions of traders that would make it easy to get exposure to bitcoin without buying or storing the cryptocurrency directly.
It marked the first in a long string of ETF rejections.
Bitcoin Cash Launched (August 1, 2017)
Bitcoin Cash is the biggest and most high-profile Bitcoin fork in history. It came about after years of debate over how to scale Bitcoin which has suffered with speed and congestion issues. Unable to come to a compromise, the community splintered into two and a new cryptocurrency was born.
Bitcoin Futures Launch, Gain Regulatory Approval (December 2017)
A futures contract is a trading tool used by institutional traders. It allows them to “bet” on the future price of an asset – usually stocks, bonds or commodities.
In December 2017, the first bitcoin futures contracts were launched by CBOE Global Markets (CBOE) and the Chicago Mercantile Exchange (CME). It was the first major sign of institutional interest in cryptocurrencies and a new way to increase mainstream crypto trading.
With the bear market of 2018, however, people began to question whether these new products had a positive or negative impact.
Either way, there are plans in the works for additional futures contracts. For example, Intercontinental Exchange (ICE) which owns the NYSE’, plans to launch bitcoin futures contracts with physical delivery in January 2019. The Vice President of Nasdaq’s media and communications department has confirmed that the company will also launch futures contracts by the first half of 2019.
Bitcoin hits (almost) $20,000 (December 2017)
Bitcoin reaches an all-time-high of $19,498, doubling in its value in little over a month.
Coincheck Exchange Hack (January 2018)
With the equivalent of over $530 million of NEM stolen, the Coincheck hack marked the largest cryptocurrency exchange hack of all time (in terms of equivalent value lost at the time of hack). Yes, there have been earlier hacks where the values of funds lost back then would be much higher than $530 million today. Nevertheless, this story is significant for a few reasons.
For example, after this event occurred, the Japanese government began to put a lot of effort toward regulating crypto exchanges to avoid another repeat scenario. After all, Mt. Gox was another Japan-based exchange that had failed and shook up the entire industry.
Second, it also put more emphasis on the lack of available cryptocurrency insurance options. Finally, it reminded investors yet again that, while crypto fund security had improved, there was (and is) still a lot of concerns surrounding this topic.
Facebook ban cryptocurrency adverts, Google follows (January 2018)
Nervous about scams and the unregulated rise of initial coin offerings (ICOs), Facebook bans all cryptocurrency-related adverts on its platform. Google and Twitter followed a few months later.
Facebook has since relaxed the ban, but ICOs remain off limits.
Consensus Debates (Ongoing)
It’s difficult to tell when the first debate over consensus algorithms began, but it’s something that is important for the current and future outlook of cryptocurrency. For instance, BTC uses a consensus mechanism called Proof-of-Work as its method of verifying the accuracy and legitimacy of transactions.
While the vast majority of cryptos use Proof-of-Work in 2018, this is beginning to change. For example, Ethereum is transitioning from Proof-of-Work to Proof-of-Stake. There are also a variety of unique, lesser-known consensus mechanisms specific to various cryptocurrencies. These could also emerge as mainstream solutions.
There are a number of debates within communities about how certain consensus mechanisms should work. While these debates existed before, they seemed to heat up dramatically in the first half of 2018. For example, cryptocurrencies that utilize Proof-of-Work have an ongoing decision on whether to embrace ASIC miners that allow for faster transaction completions or to resist them in order to keep crypto supplies more decentralized.
The consensus debate and other debates are interesting because many people are looking to stick with Satoshi Nakamoto’s original principles of decentralization. However, since Nakamoto is missing, it’s difficult to know who exactly will help determine how digital currencies should move forward into the future.
Crypto Curious? Subscribe to the Block Explorer newsletter to get exclusive crypto insights before they appear on the site.