How much was bitcoin at the very beginning?

The most popular cryptocurrency has come a long way. The first years it was talked about only in narrow circles of cryptographers. No one thought that bitcoin would become digital gold soon enough and be worth a fabulous amount.

How and where did it all start? And how much did bitcoin cost at the beginning of its journey?

What is bitcoin and how did it appear?

The coin owes its birth to the idea of ​​creating a system of non-cash transfers, which is both transparent and anonymous. In order to implement this idea, specialists back in 1983 began to develop unique cryptographic algorithms that made it possible to protect money and transfers.

The first serious work in this direction is the creation of blind signature technology, which was developed by David Chown. Next, Adam Black created the Hashcash system, which protected against spam. And, of course, Nick Szabo – it was he who in 1998 first tested the operation of the BitGold decentralized financial system. True, the project was unsuccessful, but these were only the first steps.

It was they who led to the fact that in 2008 the one whom we know as Satoshi Nakamoto launched the first cryptocurrency on the blockchain. In fact, he simply brought together all the disparate pieces of the puzzle – cryptography and distributed data storage – in decentralized networks.

Until now, it is not known who was hiding under this name. A person, a group of people, a company? Some people claim that intelligence agencies came up with the blockchain, others are sure that aliens were involved. At the same time, it cannot be denied that the secrecy of Nakamoto fully reflects the essence of bitcoin and the blockchain on which the network he created operates. Complete anonymity of the individual.

Be that as it may, on January 3, 2008, the generation of the first block on the blockchain took place, and Satoshi received the first 50 bitcoins. Throughout the first year, various assumptions were made about the development of technology and the expediency of investing money in it. Since the advent of the cryptocurrency, what strange events have not been committed with its participation – for example, everyone remembers pizza bought for bitcoin. But after a few years, many realized how valuable this asset is.

Now mining and buying bitcoin is not available to ordinary users, since the price for one coin exceeds $40,000, and setting up a farm on just a few ASICs will cost at least $30,000. If we talk about mining, it should be noted that the complexity of mining increases every 4 years. This algorithm will allow bitcoin mining for about a hundred years, and modern miners will be able to transfer farms to their children.

Key points in the development of the first cryptocurrency

2008 – can be considered the year of the formation of bitcoin. The developers registered only the domain name bitcon.org and published a white paper. Coin mining has not started yet.

IN January 2009 of the year — the first version of Bitcoin v0.1 was published and the first block was mined, which brought miners 50 BTC. On January 12, Nakomoto made the first transaction and sent ten bitcoins to Hal Finney. And in September, the first conversion of bitcoin to PayPal was carried out.

The BTC rate was published only by the end of the year – on the New Liberty Standard exchange: $ 1 was equated to 1,309.03 bitcoins. Many investors today regret that they did not invest in this asset then, because now it is much more valuable.

2010 – the time of the popularization of bitcoin, although users did not believe in its development, prospects and increase in value. This is evidenced by only one fact: in May 2010, the owner of 10,000 BTC, Laszlo Hanets, exchanged them with the help of the Dw Dollar exchange for $25 and bought a pizza. At that time, one coin could get $0.0025.

On July 11, a note about the coin is published by the news site Slashdot.org, and on July 12, the price of bitcoin soars to $0.08. In the same year, the infamous MtGox exchange was created (July 17). By December, the capitalization of the coin reached a million dollars, and BTC was trading at $0.50 on the exchange.

In 2011 Bitcoin could be bought for $1 only in January. By the beginning of summer, its cost had risen to $10, and on June 8 it was almost $32. This was followed by a drawdown to $17.50, but it was not yet a minimum. After the MtGox exchange was hacked, the price of the coin fell at a tremendous rate until it reached one cent. This is one of the most significant cryptocurrency crashes in its entire history. The return to previous positions was long, and during this period, many lost faith in bitcoin – especially those whose coins were stuck on the Japanese MtGox marketplace.

year 2012 — bitcoin gradually rose in price. On August 25, its cost was $15. And on November 28, the network lowered the reward – 25 BTC was paid for block number 210,000, while earlier the reward for each block was 50 bitcoins.

This event was called halving – i.e. dividing the reward for mining in half. Such a move was necessary in order to maintain the total number of bitcoins at the level of 21 million coins. Otherwise, bitcoin mining would have ended long ago. It should be noted that since then, halving occurs approximately every 4 years – after 210,000 mined blocks.

In 2013 at the end of February, bitcoin again reached $32. It took the first cryptocurrency almost a year and a half to return the lost positions. Its capitalization in March reached $1 billion.

In a month, BTC rose to $100, and by November, one coin could be bought for $1,000. The latest increase in value was due to the support of Bitcoin by the American game manufacturer Zynga. Obviously, faith in cryptocurrency began to grow, and one of the universities in Cyprus even allowed students to pay for their education in bitcoins.

year 2014 distinguished by unrest in the cryptocurrency market. For example, MtGox suspended the withdrawal of money due to “technical problems”, and the Vice President of the Bitcoin Foundation was arrested on charges of money laundering. Because of this, already on February 12, the cost of bitcoin adjusted to $600.

Until 2015 The fall of the cryptocurrency continued. In February, the cost of bitcoin was $262. The price declined until March, reaching $200. However, by the end of the year BTC cost $504. Growth was then explained by two reasons – the increase in exchange platforms for trading and the activity of the financial pyramid in China.

In 2016 the cost was affected by the departure of one of the developers of bitcoin, the coin rolled down and began to cost a little less than $400. However, the excitement about this ended quickly, and by April the price had reached $451. In mid-2016, the capitalization of bitcoin was $30 billion. Such a sharp jump is explained by the purchase of large batches of BTC by the Chinese. By October, the price was fixed at $780.

January 2017 the price of the coin reached $1,150. This year was very productive for bitcoin, since growth (with slight drawdowns) continued until December, when the cost of the first cryptocurrency approached $20,000. At that time, the capitalization of bitcoin exceeded $330 billion. days, a lingering correlation began.

IN January 2018 the maximum price for bitcoin was fixed at $13,800. It never rose higher that year. In an instant, the hopes of many crypto holders collapsed. In February, one coin could be bought for $6,200.

After the ban on advertising cryptocurrencies on Twitter, Facebook and Google, the decline continued. Even the lifting of this ban on Facebook did not change the situation. Before the end of the year, the price of bitcoin fell to $3,200.

IN 2019 the gradual recovery of the positions of the first cryptocurrency began. By the summer, its value had grown to $12,000. Experts associated this growth with the upcoming release of the Libra cryptocurrency, which means with the development of the industry and an increase in interest in technology. By the end of the year, the price dipped slightly to $7,240.

2020 marked with both light and dark stripes. If by mid-February the cost of the crypt was about $10,000, then on March 12 it sank to $4,600. At that moment, many coins were sold for very serious amounts, which indicated that large players were leaving the game.

On March 13, the price of BTC fell even lower – to $ 3,800. But this was the only day that the price of bitcoin was so low. Since the end of March, rapid growth has begun. It is possible that in some way the pandemic and lockdowns influenced this. By November, the price of BTC had risen to $18,000, almost reaching its all-time high of 2017.

Early January 2021 a new all-time high was recorded – $34,800. Then the price only grows and already on January 7 reaches $40,000. And the next day, an absolute maximum is fixed – $41,937.

However, literally two months later, Bitcoin reaches the $60,000 mark. The following months, the coin’s value “jumped” from $32,500 to $58,000. On September 7, its local record was set at $52,500. Then, in two months, BTC rose to almost $69,000. This figure is all still remains the absolute record of the coin.

January 12, 2022 — according to CoinMarketCap — BTC traded in the range of $42,000–$42,500. The market capitalization of the coin reached $800 billion.

Does bitcoin have material backing?

It should be noted that BTC, unlike real currencies, is not backed by anything. It does not have the support of an emission fund or banks, since this cryptocurrency had a different purpose from the very beginning. It was developed as an independent decentralized system that has neither owners nor authorities influencing it.

Accordingly, the cost of bitcoin depends only on the demand for coins. As long as it is of interest to users as an asset or means of payment, the price will only increase, which is associated with mining costs.

Neither the state nor large corporations can change the price of bitcoin. To do this, it is necessary that a large number of coins be concentrated in their hands. Or they will have to find some way to influence the process of creating new BTC – the way it happens with real money.

Fortunately, government influence on any cryptocurrency is limited exclusively by legislative issues. For example, it cannot issue virtual bitcoins, as this is the prerogative of miners who mine coins using the power of their own computers.

Mining is an uncontrolled process, it cannot be used for enrichment by hacker methods. This means that the owner of the farm will be able to get exactly as many coins as he can get.

What awaits bitcoin: growth or fall?

Many analysts agree that the fate of the Bitcoin trend is being decided these days. The market is in a state of unstable equilibrium.

If the bulls withstand the pressure of the bears, in spring or summer the first cryptocurrency will be able to update its historical maximum value and soar to $75,000–$85,000. It is highly likely that Bitcoin owners will be able to test the $100,000 level by the end of the year.

As you can see, bitcoin has come a long way to the status of a popular investment asset and means of payment. But the coin continues to improve. This is evidenced by the constant increase in prices. Perhaps one day, it is Bitcoin that will be able to become an international digital means of payment – to win the status that the dollar currently owns in the fiat world.

Disclaimer. Investing in any financial asset carries the risk of losing capital. Nothing in this text can be considered an investment recommendation or an offer to buy/sell any financial instruments. For all their actions in the stock market, each investor bears full responsibility independently.