The history of Bitcoin: from idea to global recognition
From that moment, a new financial era began: an unknown creator presented a decentralized system with its currency, not needing banks or other intermediaries.
Early stages of bitcoin development
There were ideas for a decentralized digital currency even before Bitcoin, such as Nick Szabo's "bit gold" and Wei Dai's "b-money", introduced in 1998 — 10 years before. However, Bitcoin was the first successful realization of the idea.
The first Bitcoin exchanges appeared only in 2009, and at that time, you could buy more than 1000 BTC for just $1 — they were more like marketplaces. 2010, the first crypto exchange, Mt Gox, was founded, which closed in 2014. However, as early as 2012, more than 1,000 merchants worldwide accepted bitcoins to pay for their goods and services.
In 2013, the number of active Bitcoin addresses passed 100,000 for the first time, and the price of Bitcoin exceeded $100.
From apprehension to universal acceptance
Bitcoin and other major cryptocurrencies became world famous only in 2017 when the price of bitcoin rose to $2000 and then to $5000. It was written about by major media outlets and talked about by famous bloggers. The mass effect worked, and the cryptocurrency price rose rapidly, reaching almost $20,000.
Early miners remembered their wallets at that time: some had tens, hundreds and even thousands of bitcoins. However, many of them lost the keys to their wallets, not realizing that their coins would be worth a fortune.
When the hype died down, cryptocurrency prices also began to plummet, and this process continued until 2020, with the price of Bitcoin dropping to $3800.
Crypto-enthusiasts dubbed this period "crypto winter". Many long-time supporters of cryptocurrencies had repeatedly experienced a severe drop in the BTC price and were not particularly surprised, but many newcomers to the market were scared off.
Despite the prolonged crypto winter, bitcoin and the crypto industry continued to evolve, with the emergence of the DeFi sector, the NFT market, and next-generation blockchains. Crypto winter did not prevent significant projects from attracting record investments. For example, the Telegram Open Network project, now owned by independent developers, attracted $1.7 billion during the ICO. It was only surpassed by EOS, which raised a record $4.1 billion during the year.
Interest in cryptocurrencies was fuelled again in 2020 with the "DeFi boom". This hype was already different from the previous one, as Bitcoin was already actually globally recognised:
- Big companies like MicroStrategy and Tesla were investing in it;
- Shares of major mining companies flooded onto stock exchanges such as Nasdaq;
- Crypto market capitalisation has exceeded $1 trillion and even reached $2 trillion;
- Bitcoin surpassed some of the largest companies in terms of capitalisation;
- El Salvador recognised Bitcoin as a legal tender in 2021, and the government invested money in the first cryptocurrency. In 2022, the Central African Republic recognised Bitcoin as an official means of payment;
- Chicago Board Options Exchange CBOE plans to launch Bitcoin futures in January;
- Traditional organizations are increasingly partnering with Web3 companies: for example, Google Cloud has partnered with MultiversX, formerly known as Elrond, as well as Polygon, with which well-known companies such as Sony, Meta, Starbucks and Reddit have already partnered.
On-chain data also evidence of Bitcoin's development:
- The rate of transferring coins into long-term storage is almost 2.5 times faster than the rate of BTC issuance;
- The available supply of coins on the market is less than a quarter of total issuance — an all-time low;
- In 2023 alone, the number of addresses with a balance of at least $1 million more than tripled from 23,795 to 81,925, and those with a balance of at least 1 BTC surpassed 1 million.
Even after the subsequent collapse, many users have already stopped thinking that this is the end of cryptocurrencies, and the bubble has burst and seen global prospects for Bitcoin. As evidence of this, the world's largest investment company, BlackRock, which has more than $9 trillion in assets under management, and several others have applied for Bitcoin ETFs.
Meanwhile, many countries are developing cryptocurrency regulations and central bank digital currencies (CBDCs). For example, China launched a digital yuan in 2022. CBDCs have also already been established by the central banks of Nigeria, the Bahamas and eight Caribbean island nations.
Some blockchain projects are investing hundreds of millions of dollars in mining, indicating huge prospects for this area. Tether, the issuer of USDT, the largest USDT stablecoin by capitalization, has invested $607 million in Northern Data mining company to develop its cloud business. The company has also invested in a $1 billion volcano-powered bitcoin farm project in El Salvador, but the amount invested was not disclosed.
Although Bitcoin is technologically obsolete, it remains at the centre of the entire crypto industry and will likely retain a leading position. Bitcoin has already become "digital gold" and one of the most significant assets in the world.
In 2023, the number of active users exceeded 50 million, according to on-chain data. About 1 billion people — more than 12% of the global population — use cryptocurrency frequently.
Analysts believe that in 2025 the bitcoin rate may reach $130,000 — $200,000. At the same time, the capitalization of the first cryptocurrency will be about $2.5 — 3.9 trillion.
