Bitcoin Then and Now: 2009 – 2017
When Bitcoin was first introduced to the world in 2009 it was nothing more than a novelty, known only by a few programmers and techies. Although, those few early adopters were able to see then, what we can all see now, Bitcoin, digital currency and blockchain is the future.
In just a few short years Bitcoin has seen a meteoric rise, exploding in value from a few pennies to over $5,800 per BTC! How did we get here and where is Bitcoin headed?
Time to take a trip back in time to 2008.
On August 18, 2008, the domain name bitcoin.org was registered. In November that year, a link to a paper authored by Satoshi Nakamoto titled “Bitcoin: A Peer-to-Peer Electronic Cash System” was posted to a cryptography mailing list. No one knows the true identity of Satoshi Nakamato, but speculation has been rampant.
In 2009, the Bitcoin network came into existence with the release of the first open source Bitcoin client and the “genesis block”. The genesis block refers to Satoshi mining the first block of Bitcoins, bringing the token into existence. The first block had a reward of 50 Bitcoins.
In the early years of Bitcoin, growth was slow and the world’s first cryptocurrency remained relatively unknown to the masses. Over time it has grown into the worldwide phenomena we know today.
June 2011 – Wikileaks and other organizations began to accept bitcoins for donations.
September 2012 – Bitcoin Foundation was launched to “accelerate the global growth of bitcoin through standardization, protection, and promotion of the open source protocol”.
February 2013 – Bitcoin-based payment processor Coinbase, reported selling $1 million worth of bitcoins in a single month at over $22 per bitcoin.
February 2014 – Mt. Gox suspended withdrawals citing technical issues. By the end of the month, Mt. Gox had filed for bankruptcy protection in Japan amid reports that 744,000 bitcoins had been stolen.
August 2015 – By 2015 it was estimated that 160,000 merchants were accepting bitcoin payments.
March 2016 – The Cabinet of Japan recognized virtual currencies like bitcoin as having a function similar to real money.
2017 – 1 bitcoin surpassed the spot price of an ounce of gold for the first time.
October 2017 – Bitcoin price sets new record of roughly $5,800 per BTC.
The growth that Bitcoin has experienced over the last 9 years has been nothing short of incredible. In fact, the entire market cap of Bitcoin ($96.7 billion) recently passed the market value of both Goldman Sachs ($92.9 billion) and Morgan Stanley ($89.1 billion). However, just because Bitcoin was the first cryptocurrency doesn’t mean it is the only cryptocurrency.
When Bitcoin first came on the scene, it proudly offered fast and inexpensive transactions for its users. In fact, this was one of the main selling points Bitcoin advocates used to promote the cryptocurrency. However, over time Bitcoin has become much more popular and the once speedy network is now congested and sluggish, struggling to keep pace with growing demand.
This demand has given rise to other competitors seeking to fill the void. In 2011, other tokens such as Litecoin were developed and today there are hundreds of cryptocurrencies, with market value for the entire cryptocurrency industry exceeding $170 billion.
Cryptocurrencies such as Ethereum have proven to be formidable, having been backed by companies like Intel, Microsoft and J.P. Morgan. Many analysts are even predicting that one-day Ethereum may overtake Bitcoin in terms of market cap, in an event dubbed as “the flippening”.
Not wanting to become “outdated”, the Bitcoin community understood that they had to implement changes in order to keep up with the demand for BTC. The only problem was the community could not agree on a single solution.
This debate led to a hard fork on August 1st, resulting in two Bitcoins, the original Bitcoin (BTC), and the new currency Bitcoin Cash (BCH). It remains unclear which Bitcoin will claim dominance. There is even the possibility for a third hard fork October 25.
The Future of Bitcoin
The cryptocurrency market is becoming increasingly competitive but Bitcoin remains king. To put Bitcoins dominance in perspective, here is a look at the top 5 cryptocurrencies.
The market cap of Bitcoin is still 3xs larger than the next most popular token, Ethereum.
Bitcoin market cap $90 billion
Ethereum market cap $30 billion
The difference between first and third is even more pronounced.
Bitcoin $90 billion
Ripple $9 billion
Bitcoin makes up roughly half of the market cap of the entire industry. While many have declared Bitcoin “dead” or “obsolete”, the numbers tell a very different story. That being said, the alt-coins are becoming more important and gaining influence. It is believed that Bitcoins percentage of the industries market cap will continue to fall over the coming years as new tokens and companies come on line.
Bitcoin remains a core asset for any cryptocurrency investor but diversification into other digital tokens is becoming popular. It is hard to forecast the future of such a dynamic technology but by looking at the past we can get a glimpse into the future. Bitcoin has survived price crashes, exchange thefts, government regulation and most recently a hard fork, every time coming out stronger than before. If nothing else, Bitcoin has proven to be resilient. The original crypto may not always be the dominant token within the industry, but if the past is any indication of the future, Bitcoin is not going away any time soon.