Bitcoin, the pioneering decentralized cryptocurrency, operates on a peer-to-peer network where transactions are cryptographically verified and recorded in a public blockchain. This decentralized system eliminates the need for central oversight. Consensus among nodes is maintained through a computationally demanding proof-of-work process known as mining, which ensures the blockchain's security. However, mining's escalating electricity consumption has drawn criticism for its environmental impact.
1992: The Value of Computational Puzzles
Cryptographers Cynthia Dwork and Moni Naor first proposed the idea that solutions to computational puzzles could have value in 1992.
1997: Hashcash: Proof-of-Work for Spam Control
Adam Back independently rediscovered the concept of using computational puzzles and developed Hashcash in 1997, a proof-of-work scheme for spam control.
1998: Proposals for Digital Scarcity-Based Cryptocurrencies
The first proposals for distributed digital scarcity-based cryptocurrencies came from cypherpunks Wei Dai (b-money) and Nick Szabo (bit gold) in 1998.
2004: First Currency Based on Reusable Proof of Work
Hal Finney developed the first currency based on reusable proof of work in 2004, building on previous attempts to create digital cash.
August 2008: Bitcoin.org Domain Registration
The domain name bitcoin.org was registered on August 18, 2008, marking an early step in Bitcoin's public presence.
October 2008: Bitcoin White Paper Published
On October 31, 2008, a link to Satoshi Nakamoto's white paper, "Bitcoin: A Peer-to-Peer Electronic Cash System," was posted to a cryptography mailing list, introducing Bitcoin to the world.
2008: Invention of Bitcoin
Based on a free market ideology, bitcoin was invented in 2008 by Satoshi Nakamoto, whose true identity remains unknown.
January 2009: Bitcoin Network Created, Genesis Block Mined
On January 3, 2009, the bitcoin network came into existence when Nakamoto mined the genesis block, the starting block of the blockchain.
January 2009: Bitcoin Software Released as Open Source
Satoshi Nakamoto implemented and released the bitcoin software as open-source code in January 2009, enabling anyone to participate in the network.
2009: Bitcoin's Open-Source Implementation Released
In 2009, bitcoin began being used as a currency with the release of its open-source implementation.
2009: China Bans Buying Real-World Goods with Virtual Currency
Since at least 2009, buying real-world goods with any virtual currency has been illegal in China, demonstrating early restrictions on cryptocurrency usage.
2009: Launch of the First Bitcoin Wallet
The first cryptocurrency wallet, simply named Bitcoin, was released in 2009 by Satoshi Nakamoto as open-source software. This marked a significant milestone as it provided users with a way to store the information necessary to transact bitcoins.
2010: Nakamoto Disappears, Hands Over Control
Nakamoto, after mining an estimated one million bitcoins, disappeared in 2010, handing over the network alert key and control of the code repository to Gavin Andresen.
2010: First Known Commercial Bitcoin Transaction
The first known commercial transaction using bitcoin took place in 2010 when programmer Laszlo Hanyecz bought two Papa John's pizzas for ₿10,000, marking a significant milestone in Bitcoin's real-world usage.
February 2011: Silk Road: Bitcoin's Use in Black Markets
Starting in February 2011, the dark web marketplace Silk Road became a major user of bitcoin, exclusively accepting it as payment and transacting millions of dollars worth.
September 2012: Bitcoin Foundation Established
The Bitcoin Foundation, an organization dedicated to promoting bitcoin, was founded in September 2012 with Gavin Andresen as a lead developer.
2012: Fungibility and Chain Analysis in Bitcoin
While each bitcoin is treated equally in the network, ensuring fungibility, the public record of transactions on the blockchain allows for chain analysis. In 2012, Mt. Gox froze accounts containing bitcoins identified as stolen, demonstrating the potential to differentiate between bitcoins based on their history.
March 2013: FinCEN Issues Regulatory Guidelines for Bitcoin
The US Financial Crimes Enforcement Network (FinCEN) established regulatory guidelines for "decentralized virtual currencies" like bitcoin in March 2013, classifying American bitcoin miners as money services businesses.
May 2013: US Authorities Seize Mt. Gox Exchange
In May 2013, US authorities seized the unregistered bitcoin exchange Mt. Gox, highlighting the growing scrutiny of cryptocurrency platforms.
June 2013: First Government Seizure of Bitcoins
The US Drug Enforcement Administration seized ₿11.02 from an individual attempting to use them for illegal purchases in June 2013, marking the first time a government agency had seized bitcoins.
October 2013: FBI Seizes Bitcoins from Silk Road
In October 2013, following the arrest of Silk Road founder Ross Ulbricht, the FBI seized approximately ₿30,000 from the platform, demonstrating law enforcement's growing involvement in bitcoin-related activities.
December 2013: Term 'hodl' Created
In December 2013, the term 'hodl' was created to signify the act of holding Bitcoin rather than selling it during periods of market volatility.
2013: User Loses ₿7,500 Due to Lost Private Key
In 2013, a user lost ₿7,500 (valued at US$7.5 million) by accidentally discarding a hard drive containing the private key, highlighting the risks associated with private key management in bitcoin.
2014: Debates on Bitcoin's Function as a Currency
In 2014, economists debated Bitcoin's function as a currency, with some arguing its strengths as a medium of exchange and others questioning its ability to solve economic problems. Robert Shiller saw potential as a unit of account, while François Velde described it as an elegant solution for digital currency.
2014: World Bank Report on Bitcoin
In 2014, a World Bank report concluded that Bitcoin was not a deliberate Ponzi scheme, countering claims by economists, investors, and the central bank of Estonia.
2014: Introduction of Regulated Bitcoin Funds
In 2014, regulated Bitcoin funds emerged, offering investors a way to gain exposure to Bitcoin as an asset or through futures contracts. This development provided a more regulated pathway for institutional and individual investors to participate in the Bitcoin market.
2014: Concerns about Centralization in Bitcoin Mining
In 2014, Ghash.io, a mining pool, reached 51% mining power, raising concerns about network security and potential censorship of transactions. The incident highlighted the trend towards centralization in bitcoin mining as miners joined pools for stable income.
2015: Limited Adoption of Bitcoin in International Remittances
Despite the high fees charged by traditional remittance services in 2015, there was little indication of widespread Bitcoin adoption for international money transfers. Factors like price volatility and transaction fees likely hindered its use in this market.
2015: Bitcoin as a Payment System vs. Currency
In 2015, The Economist highlighted Bitcoin's qualities as a currency: hard to earn, limited supply, and easy to verify. However, research suggested it functioned more as a payment system than a currency. The use in international remittances remained limited despite high fees from traditional services.
August 2017: SegWit Software Upgrade Activated
August 2017 saw the activation of the SegWit software upgrade, aimed at improving scalability and supporting the Lightning Network. This led to the creation of Bitcoin Cash, a fork supported by those who favored larger blocks for scalability.
September 2017: High Percentage of Bitcoin Trading in Chinese Renminbi
Over 90% of bitcoin trading was conducted in Chinese renminbi in September 2017, highlighting China's dominance in the Bitcoin market before the ban.
December 2017: First Bitcoin Futures Introduced
The Chicago Mercantile Exchange (CME) introduced the first futures on bitcoin in December 2017, signifying growing mainstream financial interest in the cryptocurrency.
December 2017: Approximately ₿980,000 Stolen from Exchanges
As of December 2017, approximately ₿980,000 had been stolen from cryptocurrency exchanges, emphasizing the security challenges and vulnerabilities within the cryptocurrency ecosystem.
2017: Market Manipulation and Price Increase in Bitcoin
Research in 2017 suggested that trading linked to the Tether cryptocurrency and the Bitfinex exchange contributed to about half of Bitcoin's price surge in late 2017. This raised concerns about market manipulation and the influence of specific entities on Bitcoin's price.
February 2018: China Imposes Complete Ban on Bitcoin Trading
Bitcoin's price crashed in February 2018 following a complete ban on Bitcoin trading imposed by China, resulting in a significant drop in bitcoin trading using the Chinese renminbi.
June 2018: Decline in Bitcoin Trading in Chinese Renminbi
By June 2018, the percentage of bitcoin trading in the Chinese renminbi had plummeted to less than 1%, demonstrating the impact of China's ban.
2018: Challenges to Bitcoin's Adoption in Merchant Transactions
By 2018, Bitcoin was rarely used in transactions with merchants, despite its popularity for purchasing illegal goods online. Reasons for this included high costs, lack of chargeback options, price volatility, long transaction times, and fees, especially for small purchases.
2018: Challenges to Bitcoin's Function as a Currency
By 2018, The Economist stated that cryptocurrencies, including Bitcoin, failed to meet the criteria of a currency. Despite being hard to earn, limited in supply, and easy to verify, they struggled to function effectively as stores of value, mediums of exchange, or units of account.
2018: Dominance of Cryptocurrency Exchanges in Bitcoin Trading
By 2018, the vast majority of Bitcoin transactions occurred on cryptocurrency exchanges. This highlighted the central role of these platforms in facilitating Bitcoin trading and shaping the market dynamics.
2018: Price Manipulation During Mt. Gox Bitcoin Theft
Research published in 2018 concluded that price manipulation occurred during the Mt. Gox bitcoin theft, highlighting the market's vulnerability to manipulation. The incident underscored the challenges of security and stability in the early stages of Bitcoin's development.
2018: Research on Bitcoin's Volatility
Research published in 2018 in the International Review of Financial Analysis highlighted that Bitcoin is highly volatile and behaves differently from conventional assets.
November 2020: PayPal Adds Support for Bitcoin
PayPal added support for bitcoin in the US in November 2020, increasing accessibility and mainstream adoption of the cryptocurrency.
2020: Bitcoin's Volatility During 2020 Stock Market Crash
During and after the 2020 stock market crash, Bitcoin was found to be less volatile than oil, silver, US Treasuries, and 190 stocks in the S&P 500, according to a 2022 analysis.
2020: Iran Utilizes Bitcoin to Circumvent Sanctions
In 2020, Iran, initially opposed to cryptocurrencies, started requiring local Bitcoin miners to sell their Bitcoin to the Central Bank of Iran. This allowed the government to utilize Bitcoin for imports, effectively circumventing international sanctions.
February 2021: Bitcoin's Market Capitalization Reaches $1 Trillion
For the first time, Bitcoin's market capitalization hit $1 trillion in February 2021, underscoring its growing value and recognition.
September 2021: El Salvador Adopts Bitcoin as Legal Tender
In September 2021, El Salvador made history by adopting Bitcoin as legal tender alongside the US dollar. The move, enshrined in the Bitcoin Law, was met with criticism both domestically and internationally, particularly from the International Monetary Fund (IMF).
September 2021: Bitcoin Becomes Legal Tender in El Salvador
El Salvador made history in September 2021 by adopting Bitcoin as legal tender alongside the US dollar, a pioneering move in cryptocurrency adoption.
October 2021: First Bitcoin Futures ETF Approved and Listed
In October 2021, the SEC approved the first bitcoin futures Exchange-traded fund (ETF), BITO, from ProShares, which was subsequently listed on the CME, providing investors with regulated access to bitcoin.
November 2021: Taproot Upgrade Activated
November 2021 marked the activation of the Taproot soft-fork upgrade, enhancing Bitcoin's functionality by adding support for Schnorr signatures and improving smart contracts and the Lightning Network.
November 2021: Global Legal Status and Regulation of Bitcoin
As of November 2021, the legal status of Bitcoin varied significantly globally. Nine countries had an absolute ban, while 42 had an implicit ban. Only El Salvador recognized it as legal tender. The decentralized nature and global presence of Bitcoin presented challenges for regulators, with concerns about criminal use and money laundering.
2021: Concentration of Bitcoin Wealth
As of 2021, Bitcoin wealth was highly concentrated, with 0.01% of holders controlling 27% of the circulating currency. This raised concerns about wealth inequality and potential influence over the Bitcoin network.
2021: El Salvador Adopts Bitcoin as Legal Tender
In a groundbreaking move, El Salvador adopted bitcoin as legal tender in 2021, alongside the US dollar.
April 2022: Central African Republic Adopts and Repeals Bitcoin as Legal Tender
Following El Salvador's lead, the Central African Republic (CAR) adopted Bitcoin as legal tender alongside the CFA franc in April 2022. However, the reform was short-lived and repealed just one year later.
June 2022: Bitcoin Price Falls Following Market Collapses
The collapses of TerraUSD stablecoin and Celsius Network, a cryptocurrency loan company, triggered a decline in bitcoin's price in June 2022, highlighting the interconnectedness and volatility of the cryptocurrency market.
2022: Analysis on Bitcoin's Post-2020 Volatility
A 2022 analysis published in The Journal of Alternative Investments showed that Bitcoin was less volatile than several major assets during and after the 2020 stock market crash.
2022: Bitcoin Mining's Environmental Impact
In 2022, studies highlighted the environmental impact of Bitcoin mining, estimating it to represent 0.4% of global electricity consumption and 0.2% of world greenhouse gas emissions. Concerns were raised about the use of fossil fuels in electricity generation and the electronic waste generated by mining hardware.
September 2023: El Salvador's Bitcoin Holdings
As of September 2023, El Salvador held $76.5 million worth of Bitcoin in its international reserves. This demonstrated the country's commitment to Bitcoin as a national asset despite facing challenges in its implementation.
2023: US Government Holds Seized Bitcoin
By 2023, the US government had accumulated over $5 billion worth of seized Bitcoin. This highlighted the growing role of Bitcoin in government holdings and its use in legal proceedings, potentially impacting future regulatory decisions.
2023: Ordinals (NFTs) on Bitcoin Go Live
In 2023, ordinals, non-fungible tokens (NFTs) built on the Bitcoin blockchain, were launched, expanding the use cases and functionality of the network.
January 2024: First US Spot Bitcoin ETFs Begin Trading
January 2024 marked a pivotal moment with the commencement of trading for the first 11 US spot bitcoin ETFs, offering direct exposure to bitcoin on American stock exchanges for the first time.