Ten years ago, when Satoshi Nakamoto wrote a research paper, no one had an idea what potential it holds for the future. In fact, Bitcoin was never intended to be the digital currency of future. It took few years for the industry to have the first exchange operational on March 17, 2010. On May 20, 2010 Laszlo Hanyecz made the first real-world transaction by buying two pizzas in Jacksonville. In just five days, the price increased by 900%, and went from $0.008 to $0.08 for 1 Bitcoin.
The abstract in the research paper was vartiually zero and was purely a peer to peer version of electronic transactions without having any other third party financial institution. This decentralized registry system was known as a blockchain and it’s a decade old now. Bitcoin has evolved for several years now. Blockchain was latter seen as a way of money laundering and criminals, hackers and blackmailers used it as their perfect weapon to transact money from one party to another. Bitcoin saw its first biggest rise in 2013 when it crossed $1000 for the first time. Later on financial institutions and investors started to take interest in Bitcoin and other crypto assets.
A Tokyo based crypto currency exchange that was operational between 2010 and 2014 faced the first biggest hacking of Bitcoin. This exchange made more than 70% transactions at that time. In February 2014, Mt. Gox suspended trading and applied for bankruptcy protection from creditors. It announced later on that approximately 850,000 Bitcoins are being stolen, an amount worth more than $450 million at that time. It took three years for Bitcoin to fully recover from the set back. 2017 was truly a turning point for the currency when it went straight to $20,000 by the end of year.
By 2017, the Bitcoin emerged as world’s largest digital asset with more than $300 billion capitalization. By 2018, the value of all crypto currencies crossed $800 billion captilization. Thanks to Bitcoin, the concept of block chain and money transaction without any financial institution has become real. Now other than Bitcoin, we have almost 2000 digital coins appearing and disappearing every now and then. The analyst Bob McDowall suggest that it is more than technological, economic innovation now. It has become a religion for some people.
Economist Nouriel Roubini thinks decentralization in crypto is a myth. He tweeted: “It is a system more centralized than North Korea. Miners are centralized, exchanges are centralized, and developers are centralized dictators. He further added “You need 20 years for this kind of technology to take hold completely.” It turns out that Bitcoin transactions are slow and takes too much resources. It can execute 5 to 10 transactions per second compared to several thousand for Visa Card.