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What do you think is the first real-world Bitcoin transaction in history?
a.) A bucket of chicken b.) A gallon of ice cream c.) Two large pizza d.) Two pairs of shoes
We'll know the answer of this question as we continue to delve into the article.
Concept of Cryptocurrency
The concept of cryptocurrency came into existence in the late 1980s, having the goal of creating a currency that could be sent anonymously, without using centralized entities, like, banks. An American cryptographer, David Chaum, made Digicash, which was an anonymous cryptographic electronic money, in the year 1995 ( Hamacher, 2022).
So far, that was an early form of cryptographic electronic payments in the history. It also required the users of the said software encrypted keys before the recipient can receive it, after withdrawing from the bank.
Furthermore, other personality that became part of the idea of cryptocurrency includes Nick Szabo, who designed Bit Gold in 1998.
Bit Gold was Bitcoin's direct precursor. It was like a typical game that offers a reward after you win. It was done by requiring the participants to dedicate computer power in solving cryptographic puzzles. Once done in solving the puzzle, a reward can be received. This combination of Chaum’s and Szabo’s concepts together resembles the idea of Bitcoin.
However, things went ironic when Szabo himself could not solve the puzzle of the double-spending problem, or digital data that can be copied and pasted, without using central authority.
Here comes the other mysterious person/s using the pseudonym a decade later, from the article of Jones, 2022, a man named Satoshi Nakamoto published a white paper called Bitcoin – A Peer to Peer Electronic Cash System.
This is where the history of Bitcoin, and subsequent cryptocurrencies, began.
Satoshi Nakamoto published the white paper called Bitcoin – A Peer to Peer Electronic Cash System on the 31st of October, 2008. It describes the functionality of the Bitcoin blockchain network. On the other hand on August 18 of the same year, he then formally began the work on the bitcoin project, and, purchased Bitcoin.org. The value of Bitcoin that time, specifically in April 2010, was less than 14 cents. It surged to 36 cents 7 months after, when a pizza was bought on May, specifically, 2 large pizzas.
Hence, from the question above, if your answer is letter c, or two large pizza, then you're accurate! Did you guys get the correct answer? Share it on the comment section below.
After the aforementioned incident, Bitcoin has proven that it had real world value, although, it was not worth much yet. From 36 cents, it has gradually risen to $1.06 in February 2011. In the spring, in part due to a Forbes story on the new “cryptocurrency,” the price took off. There was a continuous surge from early April to the end of May, the cost for a Bitcoin increased from 86 cents to $8.89.
Issues Became Predominant and The Worst Happened (2014-2016)
As a staring platform, ups and downs interfered the timeline. Because of an intentional, anonymity and lack of centralized control, the digital currency became an easy and vulnerable thing for crimes and criminals. As a result, the worst thing happened in January 2014. The nightmare began when Mt. Gox, the world's largest Bitcoin exchanged, collapsed. Rumor has it that a massive heist happened, and an 850,000 Bitcoin were slowly losing staring from 2011. Afterwards, they declared a total bankruptcy.
From rags to richest, Bitcoin has recovered from the incident in the year 2014 as their prices elevated consistently year after year. From $434 in January 2016, to $998 in January 2017. On the other hand, a new blockchain project called Ethereum, a number two cryptocurrency on the market, created noise in the cryptocurrency world.
Competition against Ethereum happened from the emergence of other blockchains like Cardano and Tezos. Hence, the cryptocurrency world continues to expand and grow in market cap, making its massive comeback.
Bust and Eventual Recovery (2018-Present) (Jones, 2022)
Later on that year, Bitcoin, as well as Ethereum, did not acquire long-term sustainability. Continuous hackings became a catalyst that became the very main reason why financial regulations and security concerns were raised. As the year 2018 ended, Bitcoin had dropped down to around $3700. Prices did not stay down however, and since the end of 2018, Bitcoin, along with most other cryptocurrencies, Ethereum included, have rebounded in the present (Jones, 2022).
At present times, cryptocurrency, or blockchain, has proven its versatility, not just in the digital world, but also in the real world we are moving in. Especially, during these trying times, I've seen a lot of articles here in read. cash where its utilization in a specific country, is being highlighted. It just feels so good to look back in the past. It was because of the 2 large pizzas, and, the rest are satisfying history to look back on.