Unfolding the Bitcoin Story as The Cryptocurrency Turns 10
One reason why Bitcoin still continues to be one of the most preferred choices of crypto investors is because it was the first one to come-up with the unique concept of a decentralized digital currency powered by the revolutionary blockchain technology.
Currently, Bitcoin (BTC) alone dominates nearly 50% of the cryptocurrency market with a market cap of around $110 billion. However, the Bitcoin journey over the last decade consists of a roller-coaster ride with full of ups and downs. But still, Bitcoin is considered as the darling of crypto investors. Here a look into its journey in the last decade.
Bitcoin And Its Early Days
It all started when the world was undergoing a global recession with the collapse of banking institutions like Lehman Brothers in 2008. The collapse of centralized banking has made people lose their faith in those institutions and soon they were presented with an alternative in the form of Bitcoin.
On October 31st, 2008, the Bitcoin whitepaper was released by an anonymous personality named Satoshi Nakamoto presenting a unique concept of decentralized digital currency. The whitepaper certainly struck-a-chord with people as the Bitcoin concept provided them the freedom to handle their financial without third-party intervention. Not only that, Bitcoin’s underpinning blockchain technology has proved to be a huge challenger to the inefficient, slow and costly systems currently used by the banking institutions for global transfer.
By 2009, the first 50 Bitcoin called the “Genesis Block” were mined. Mining is the process that involves solving complex mathematical algorithms to add and approve new blocks to the Bitcoin blockchain network. The total number of Bitcoins is fixed at 21 million.
In 2010, the firs real-world transaction of Bitcoin took place where a Florida-based programmer transacted 10,000 Bitcoins, then worth at $25, for buying a pizza.
Bitcoin’s Growing Use in the Silk Road and the Dark Web
Soon as Bitcoin was starting to gain some popularity among the global financial investors, it soon feel into the hands of bad actors. Bitcoin’s decentralized nature which was once considered as its strength, soon turned into dark side.
The emergence of Silk Road - the dark web marketplace - which was used for transacting drugs, guns, and other illicit goods, started using Bitcoin. Due to no regulatory body involved, Bitcoin proved to a fuel to these illicit transactions worldwide. Soon bitcoin’s image turned out to be as the cryptocurrency of the criminals. By 2015, the U.S. law enforcement officials finally managed to shut down the Silk Road route.
Another major incident surrounding Bitcoin in the period between 2010 and 2013 was the great rise and fall of Mt. Gox cryptocurrency exchange. Tokyo-based exchange Mt. Gox was one of the early players to provide Bitcoin trading and transactions. By 2013, Mt. Gox alone handled nearly 70 percent of all crypto transactions worldwide.
However, through its lifetime, the crypto exchange faced a series of hacks losing millions of dollars of investors’ funds. Soon by 2013, Mt. Got filed for bankruptcy and shut down its operations.
Bitcoin’s Journey to the Top
Despite facing severe odds, people still believed in the Bitcoin story! Again, post the Silk Road, Bitcoin slowly managed to gain momentum while gaining its lost popularity among crypto investors. The last year of 2017 has been the most historic in the entire lifetime of Bitcoin. It is not only one of the most historic years for Bitcoin, but also the overall crypto market.
Bitcoin investments started gaining pace since the beginning of 2017. By this time Bitcoin was enough trusted that the new cryptocurrencies that were added to the crypto market through ICOs also asked for Bitcoin as an alternative investment to fiat.
By the mid of 2017, Bitcoin has gained enough limelight and was very popular among global investors. By this time, the Bitcoin price was around roughly $5500-$6000 per token. Soon as everything seemed to be going smooth, China -one of the biggest crypto trading Asian market - announced an outright ban on digital currencies. This decision coming from the Asian economic powerhouse resulted a huge dent in liquidity flow in the crypto market.
Moreover, Bitcoin was also the central point of target and criticism for banking institutions, as it already started to pose a considerable challenge to them. However, there were giants like the CME and CBOE who were keen of getting Bitcoin into the mainstream. Soon reports about Bitcoin futures coming to the market started flowing in and there was a crazy rush among investors to buy the cryptocurrency. By the time Bitcoin Futures contracts were launched mid-December 2017, bitcoin has struck its all-time high of $20000.
The Recoiling of Bitcoin and Regulatory Intervention
This year, so far, has been surrounded with regulations and laws. With the growing mad rush of Bitcoin investors, there were also increased reports regarding terror financing and money laundering. Several government and centralized institutions took this opportunity to put down Bitcoin as it was yet again painted as a potential tool for notorious global investors.
To control this mad rush of investors, government and regulatory bodies started intervening in the crypto market. Regulatory bodies across the globe are still working on framing laws that ensure investors protection. With several exchange hacks reported this year and the loss of millions-of-dollars of investors’ funds, regulatory bodies are now framing strict laws to govern the flow of funds and protect the investors’ interests.
Growing Institutional Participation and the Road Ahead
Experts believe that regulatory intervention can prove to be a boon in a way! Regulatory intervention will help bring more clarity and security for institutional participation in the crypto space. Moreover, with regulation chipping-in financial services giants like ICE and Fidelity have already announced launching their own crypto trading platforms and storage service to attract big investments from giant institutional players in the crypto market.
Once that a regulatory stability is established, there can be a massive influx of institutional funds in the crypto market which will set the next phase of crypto market glory.