Bitcoin has been a trusted and influential Cryptocurrency that is trading at almost $20,000 today. As any kind of assets, this currency did not always start at an all-time high. It started out to be worth only a few cents on the first trades of Bitcoin. Let us dig a little deeper and see what Bitcoin is and how it all began.
What Is Bitcoin?
Bitcoin is the first decentralized peer-to-peer cryptocurrency platform, which means that there is no major company regulating this currency. Each owner of Bitcoin plays a role in the management of Bitcoin and, of course, the growth of it. This Cryptocurrency operates on a Blockchain, which is a successful payment technology and cuts out the third party involvement in the transaction.
Where Bitcoin Started
Bitcoin is said to have been created in the later stages of 2008 when the first domain name Bitcoin.org was registered by a person named “Satoshi Nakamoto”. Shortly thereafter Satoshi and a developer of console games, called Hal Finney, attempted the first official transaction for Bitcoin in 2009. This resulted in the first price between Bitcoin and USD to be established at only $0.001.
In 2013, the trade of Bitcoin rose to $31 per 1 Bitcoin – this is when the number of companies joining Bitcoin increased. Among the pioneers were WikiLeaks and the Electronic Frontier Foundation. It is no wonder that the value of Bitcoin increased at a rapid pace. From 2012 to 2017, the growth of Bitcoin had been phenomenal, with trades increasing from $6 to $1,000. Thereafter the Bitcoin price more than quadrupled during the course of 2017, reaching trades of over $20,000 at some exchanges recently.
Highs And Lows Of Bitcoin
Despite the exceptional growth and performance of Bitcoin for the last 30 days, it has also had a few ups and downs on the journey. Let’s take a look at some of the highlights and sombre moments in Bitcoin.
- The first Pizza was ordered and paid for with 10,000 Bitcoins in May 2010.
- The Bitcoin protocol was hacked in August 2010, releasing the amount of 184 billion Bitcoins. Trying to save the reputation of Bitcoin, the developers have put measures in place to avoid money laundering through Bitcoin.
Bitcoin price: $0.07-0.3
- February 2011 – the Bitcoin price finally touched $1.
- The first breach of Bitcoin was experienced, and an amount of 25,000 BTC was stolen in June 2011.
Bitcoin price: $0.3-4
- In February 2013, the USD and Bitcoin was paired and 1 Bitcoin was traded against $31.
- As Bitcoin is untraceable, the illegal drug trade online was started and called Silk Road but was closed down in October 2013. The FBI retrieved 26,000 BTC.
- By April 2013, the market value of Bitcoin reached $1 billion.
- Mazzant, a federal judge, confirms that Bitcoin is indeed a currency.
- The first Bitcoin ATM was built in October 2013.
- For the first time Bitcoin reached an all-time high of $1,000 in November 2013.
Bitcoin price: $13-1,000
- Secure Bitcoin storage services were incorporated for recognized clients in 2014.
- All transactions came to a halt, and the industry lost 850,000 Bitcoins as a result of the Mt. Gox collapse in February 2014. The exchange rate of Bitcoin took a huge dive.
- Some of the largest technology companies, such as Microsoft, adapted their service to accept Bitcoin for purchasing games and apps.
Bitcoin price: $985-320
- August 2016 – an amount of 120,000 BTC was stolen from Bitfinex (over $70 million at that time). The Bitcoin price drops.
Bitcoin price: $430-920
- March 2017 – Bitcoin exceeded its previous high of $1,000 with an amazing trade of $1,290.
- August 2017 – the largest fork ever to be performed was done, this was for increased block sizes. Bitcoin was then split into two, giving birth to a new coin known as Bitcoin Cash (BCH).
- The amazing upward trend started.
Bitcoin price: $1,000-20,080
Since the fork about six months ago, the price of Bitcoin has only become stronger and stronger. There are no fixed Bitcoin prices like all the other fiat currencies. Bitcoin is based on averages from different trading sites. As of today, Bitcoin’s price undergoes correction and fluctuates around $16,500.
Besides the timeline, let’s see what factors determine the price.
It was written that only a fixed number of 21 million coins would be produced. To date, more than half of this supply has already been mined.
If an influx of coins has to arise, the price would drastically drop, for instance, if Nakamoto had to release his share of 1 million coins.
Now miners are being rewarded an amount of 12.5 BTC for every block that is mined successfully. The current rate of mining is at 1,800 coins per day. But this number is set to decrease as a result of Bitcoin halving. As a rule, when supply decreases, the price goes up.
The demand for the currency also plays a huge role. With each passing day there are more news stories covering “the future of money”, more companies accepting Bitcoin as a means of payment, and more people discovering the Bitcoin phenomenon. The price of Bitcoin is rising; this proves that there is a very big demand for it.
Fiat Currency Crisis
Banks are no longer seen as a safe place to keep money in. Many people have lost money due to security breaches in banking systems. This also increases the interest in Bitcoin as it is a safe form of storing and transferring money without third parties or interception.
Take Greece, for example, where strict withdrawal limits were incorporated once their currency experienced a crisis. This is where Bitcoin increased as there were no regulations on it like on other currencies – it is all part of being decentralized.
The Mt. Gox fiasco had a huge effect on Bitcoin as the loss of over 800,000 coins was unravelled. The price of Bitcoin dropped massively and it took time for the community to get over Bitcoin’s biggest hack. Today there are many large trades which will not be as influential as in the past.
To avoid having to monitor the market and the price of Bitcoin, it is recommended that Bitcoin is purchased at regular intervals; this will minimize the overall average of your Bitcoin purchases.