Bitcoin

Bitcoin is currently a craze. It is a cryptocurrency, or electronic cash. It is marked by

its decentralized nature without a central bank or administrator. The currency can be
sent from user to user on the Bitcoin network without a middleman. In this respect,
Bitcoin has been revolutionary. Though there are other cryptocurrencies besides
Bitcoin, it is the most prominent one. In order to understand more about this
phenomenon, this essay will explore the history and inner workings of this digital
currency.

There is not much known about the inventor of Bitcoin. Though the person
who authored it is known as Satoshi Nakamoto, his identity is not fully
known. At any rate, the domain name bitcoin.org was registered on the 18th of
August, 2008. According to Business Insider, “Two months later, a paper entitled
‘Bitcoin: A Peer-to-Peer Electronic Cash System’ was passed around a cryptography
mailing list. The paper is the first instance of the mysterious figure, Satoshi
Nakamoto’s appearance on the web, and permanently links the name “Satoshi
Nakamoto” to the cryptocurrency. Among Bitcoin’s earliest enthusiasts was Hal
Finney, a console game developer and an early member of the “cypherpunk
movement” who discovered Nakamoto’s proposal for Bitcoin through the
cryptocurrency mailing list” (Bernard, Zoë). Finney became the first receiver of a
Bitcoin transaction. On January 3rd of 2009, the Bitcoin network was created by
Nakamoto by mining the first block of the chain—otherwise known as the genesis
block. According to Wired, “For a year or so, his creation remained the province of a
tiny group of early adopters. But slowly, word of bitcoin spread beyond the insular
world of cryptography. It has won accolades from some of digital currency’s greatest
minds” (Wallace, Benjamin). The greatest earliest supporters of Bitcoin came from
cyberpunk enthusiasts and digital currency creators.

The progress and popularity of Bitcoin was gradual. By 2010, the first commercial
transaction using Bitcoin was made by Laszlo Hanyecz to buy Papa John’s pizzas for
10,000 bitcoin (Kharpal, Arjun). After this time, Nakamoto mined up to one million
bitcoins, and disappeared. Before he left, though, he gave the network alert key and
control of the code repository to Gavin Andresen, a software developer. This led him
to become the lead developer for the Bitcoin Foundation (Vigna, Paul).

2011 marked a significant year for the digital currency. Bitcoin made “proof-of-
concept” transactions with black markets such as Silk Road—the first modern
darknet market, which mostly sold illegal drugs. For 30 months, Silk Road exclusively
used Bitcoin to make translations. Overall, 9.9 million bitcoins were employed by
them, which amounts to 214 million dollars. From these types of transactions and
partnerships, the price of a bitcoin started at $0.30, but grew to as much as $31.50 in
June of that year. Later, however, the price of a bitcoin dropped back down to $4.77.
Another big happening was the creation of the first spin off of Bitcoin: Litecoin. From
this first “altcoin” came many other variations and takes on cryptocurrency (McMillan,
Robert).
 Fast forward to 2019 and Bitcoin currency has fluctuated a lot but has also raised its
value significantly over the years—especially from its humble beginnings. Bitcoin,
and other cryptocurrencies, are at once praised and criticized enthusiastically. The
market for these coins are mostly volatile but there is perhaps a brighter future for
them in terms of stability. Unfortunately, Bitcoin experienced hacks in 2018 and this
has negatively affected its value and reliability (Chavez-Dreyfuss, Gertrude). Yet,
many experts believe that in the near future, cryptocurrency will be a regular
installment of the economy in many countries. This change will be perhaps gradual,
but many experts say that this transformation is almost inevitable.

Bitcoin has created a currency revolution. Initiated by the anonymous Satoshi

Nakamoto, Bitcoin is an open-source, person-to-person currency that is transferred
digitally without middlemen or centralized control. Though the digital coin had humble
beginnings in a pizza shop and black markets, it has now been used for a multitude
of purposes and its price has skyrocketed since its beginnings. Though the
cryptocurrency market is more volatile than regular currencies, many see Bitcoin and
other companies as pioneers in a physical-money future.

Works Cited
Bernard, Zoë. “Everything You Need to Know about Bitcoin, Its Mysterious Origins,
and the Many Alleged Identities of Its Creator.” Business Insider, Business Insider,
10 Nov. 2018, www.businessinsider.com/bitcoin-history-cryptocurrency-satoshi-
nakamoto-2017-12#on-january-3-2009-30000-lines-of-code-spell-out-the-beginning-
of-bitcoin-2.

Wallace, Benjamin. “The Rise and Fall of Bitcoin.” Wired, Conde Nast, 25 July 2018,
www.wired.com/2011/11/mf-bitcoin/.

Kharpal, Arjun. “Everything You Need to Know about the Blockchain.” CNBC, CNBC,
29 June 2018, www.cnbc.com/2018/06/18/blockchain-what-is-it-and-how-does-it-
work.html.

Vigna, Paul. “Is Bitcoin Breaking Up?” The Wall Street Journal, Dow Jones &
Company, 17 Jan. 2016, www.wsj.com/articles/is-bitcoin-breaking-up-1453044493.

McMillan, Robert. “Ex-Googler Gives the World a Better Bitcoin.” Wired, Conde Nast,
3 June 2017, www.wired.com/2013/08/litecoin/.

Chavez-Dreyfuss, Gertrude. “Cryptocurrency Exchange Theft Surges in First Half of

2018: Report.” Reuters, Thomson Reuters, 3 July 2018, www.reuters.com/article/us-
crypto-currencies-ciphertrace/cryptocurrency-exchange-theft-surges-in-first-half-of-
2018-report-idUSKBN1JT1Q5.

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