Since 2008, Bitcoin has been affected by a wide range of factors that have made it one of the most volatile currencies in the world. However, despite the volatility, more than 100,000 Bitcoin transactions take place every day, and the volume continues to grow due to the “permissionless innovation” provided by its underlying technology, blockchain.
As blockchain matures, Bitcoin will increasingly resemble traditional financial services, with features like retail banking (Circle), exchanges (Coinbase), and payment processors (BITNET). But how did it all start, and where is it headed next? Below, we’ll take a brief look at the most important milestones in the cryptocurrency to consider where it could be headed in the future.
August 2008
Three individuals, Neal Kin, Vladimir Oksman, and Charles Bry, filed an encryption patent application. All three individuals deny any connection to Satoshi Nakamoto, the alleged creator of Bitcoin. The three also registered the domain Bitcoin.org that same month, through anonymousspeech.com – a company that allows anonymous domain purchases.
October 2008
Despite the above, Satoshi Nakamoto releases a white paper, revealing his idea for a purely peer-to-peer version of electronic money, the first in the world. In his vision, he manages to solve the problem of money being duplicated, providing a vital foundation for Bitcoin to develop legally.
January 2009
The first block, called 'Genesis', is launched, allowing the initial "mining" of Bitcoins. Later that month, the first transaction takes place between Satoshi and Hal Finney, a developer and crypto activist.
October 2009
Bitcoin receives an equivalent value in traditional currencies. The New Liberty Standard defines the value of Bitcoin at $ 1 = 1.309 BTC. The equation was calculated so as to include the cost of electricity for the operation of the computer that created the first Bitcoins.
May 2010
A Florida-based programmer named Laslo Hanyecz sends 10,000BTC to a volunteer in England, who spent about $25 to order Hanyecz a pizza from Papa John's. Today, this pizza is valued at £1,961,034 and is now a major milestone in Bitcoin history.
August 2010
Bitcoin was hacked. A vulnerability was discovered in the way the system verifies the value of Bitcoin. This discovery led to the creation of 184 billion Bitcoins. The value of the currency plummeted.
October 2010
Bitcoin takes the spotlight. After the hack in August – and the subsequent discovery of other vulnerabilities in the blockchain in September – an intergovernmental group publishes a report on money laundering using new payment methods. Bitcoin, they said, could help finance terrorist groups.
January 2011
Silk Road, an illegal drug marketplace and more, opens its doors to the public. It uses Bitcoin as an untraceable way to buy and sell drugs.
February 2011
Bitcoin reaches parity with the US dollar for the first time. By June, each Bitcoin is worth $31, giving the currency a market capitalization of $206 million.
June 2013
The first major theft. The founder of the Bitcoin Forum, allinvain reports that 25,000 BTC disappeared from his digital wallet. The amount was equivalent to $375,000. That same month, a significant security breach drops the coin's value from $17.51 to $0.01 per Bitcoin.
March 2013
The U.S. Financial Crimes Enforcement Network (FINCEN) issues some of the world's first regulations in the form of a report to guide the management, exchange, and regulation of virtual currency. This marks the beginning of an ongoing debate about how best to regulate Bitcoin.
March 2013
Bitcoin market capitalization reaches $1 billion.
August 2013
Federal Judge Mazzant claims that: “It is clear that Bitcoin can be used as money” and that “It can be used to purchase goods or services” in a case against Trendon Shavers, the so-called ‘Bernie Madoff of bitcoin.’ Bloomberg begins testing Bitcoin on its terminal. Despite the fact that alternative tickers exist, Bloomberg’s endorsement gives Bitcoin greater institutional legitimacy.
November 2013
Bitcoin rises to $700.
December 2013
China's central bank bans financial institutions from trading Bitcoin. Today, China remains the largest Bitcoin trading market, with 80% of global Bitcoin transactions originating from China.
January 2014
Elliptic launches the world's first secured Bitcoin storage service for institutional clients. All deposits are fully insured.
Overstock.com becomes the first major online retailer to embrace Bitcoin and accept payments in the US.
February, 2014
HMRC classifies Bitcoin as an asset or private capital, meaning that no VAT will be charged on the mining or exchange of Bitcoin.
June 2014
The US government auctioned off more than 29,000 bitcoins seized from the illegal online marketplace Silk Road. The shutdown and auction of Silk Road's digital currencies helped bring legitimacy to Bitcoin as it demonstrated that Bitcoin is not an easy way for online criminals to evade the rule of law.
From this point onward Bitcoin can no longer be considered a currency used by criminals. The use of the Bitcoin blockchain means that the identity of users can often be determined.
July 2014
The 'Bit License' begins to become a reality, as the New York State Department of Financial Services releases the first draft of the agency's proposed rules to regulate virtual currencies. The European Banking Authority also publishes its opinion on "virtual currencies" and recommends that EU lawmakers legislate the registration of virtual currency exchanges as mandatory for anti-money laundering and counter-terrorist financing requirements.
The EBA report is significant, as it acts as a catalyst for Bitcoin to be considered a regime in the financial trend, emphasizing that virtual currencies require a regulatory approach and international coordination to achieve a successful regulatory regime.
August 2014
Chancellor of the Exchequer, George Osborne buys £20 in Bitcoin.
October 2014
TeraExchange announces that the first Bitcoin derivative transaction has taken place on an organized exchange, adding a new means of hedging credibility and institutional trust for Bitcoin to the entire Bitcoin community.
December 2014
Microsoft begins accepting payments in Bitcoin.
January 2015
The New York Stock Exchange is the short-selling investor in Coinbase's $75 million investment. The NYSE aims to leverage the new asset class by bringing transparency, security, and trust to Bitcoin.
Future Predictions
There are several ways Bitcoin could develop. All point to a legal, widespread adoption by large institutions and businesses but with stricter regulation. Recently, New York’s BitLicense became the world’s first dedicated digital currency regulatory regime. It has gone through a couple of rounds of consultation and is expected to come into effect in a week or two.
The European Central Bank and the European Bank have released two detailed reports on digital currencies, and propose regulating the sector by the EU with further price control fluctuations. The Winklevoss brothers are on the verge of launching their own exchange for Bitcoins.
The journey of Bitcoin in the dominant financial trend has already begun, with the HM Treasury report. The report outlines ways to combat money laundering, protect consumers, and technical standardization for legitimate digital businesses in the United Kingdom. It also encourages traditional financial services to engage more with digital businesses and accelerate the integration of blockchain technology within financial services.
Source: secnews.gr
