The Genesis Block
January 03, 2009
“The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.” Bitcoin’s mysterious creator Satoshi Nakamoto included this headline in the genesis block of the Bitcoin blockchain, possibly as a timestamp for the launch of the network, but also as a commentary on Bitcoin’s role in the economy.
The genesis block is Block 0, and acts as the root from which the Bitcoin blockchain has grown. It is the realization of the Bitcoin White Paper published by Nakamoto in 2008. In six days Satoshi Nakamoto created the first bitcoin transaction, Block 1, and on the seventh day perhaps he rested.
March 17, 2010
The first cryptocurrency exchange was bitcoinmarket.com and it offered the opportunity to exchange fiat money for Bitcoin on the open market. The site was first mooted by user “dwdollar” on the Bitcointalk forum and when it launched it accepted Paypal transactions.
The site was plagued with problems, and after a series of scams perpetrated over the exchange, it shut down its Paypal service in 2011. bitcoinmarket.com would eventually become defunct and be overtaken by a new generation of cryptocurrency exchanges, including Huobi, Bitstamp, and the infamous Mt.Gox.
Bitcoin Pizza Day
May 22, 2010
Laszlo Hanyecz made Bitcoin history when he bought two pizzas from Papa John’s for 10,000BTC. The transaction marked the first time that Bitcoin was used to purchase goods and is celebrated as the first commercial transaction ever made with Bitcoin.
Hanyecz, who contributed to Bitcoin’s development, negotiated the price on a Bitcoin forum and has “no regrets” about paying what is now worth millions of dollars for two pizzas.
Bitcoin Pizza Day is now enshrined in the crypto calendar and celebrated by crypto enthusiasts across the globe. It is also celebrated by pizza restaurants.
November 28, 2012
After every 210,000 blocks are mined on the Bitcoin blockchain, the reward for miners is halved. At the start of the Bitcoin blockchain, miners would receive 50 Bitcoins for each transaction. After the first halving, miners would receive 25. A halving happens approximately every 4 years. As of 2021, miners receive 6.25 Bitcoins for every block mined.
This system, together with the limited total circulation of 21 million Bitcoin, was coded into the Bitcoin Blockchain to create an effect that would increase the value of the cryptocurrency.
Bitcoin halving will reduce the payouts for miners until the year 2140, after which miners will no longer be rewarded with Bitcoin, but will be paid by the network’s user via transaction fees.
The 2013 Bitcoin Fork
March 12, 2013
A coding oversight for the upgrade of the Bitcoin software from version 0.7 to 0.8 caused the Bitcoin blockchain to split into two in what is known as a fork. For about six hours, two different records of the Bitcoin ledger existed simultaneously.
25 transactions were created in an erroneous chain that was later abandoned when developers decided to switch back to version 0.7. Bitcoin devs contacted major exchanges and mining pools and made the switch back to the old version. The financial impact was significant but not large: about USD36,000 worth of BTC at the time.
The price of Bitcoin fell by about 24% but the losses were reversed quickly once the fork was resolved.
This was not the first time the Bitcoin blockchain had forked. In 2010, a more serious error occurred and was resolved after 53 blocks. Had developers not done anything, the 2013 fork would probably have resolved on its own when more and more miners moved to 0.8. The whole event tested the robustness of the BTC ledger, and while confidence in the technology was largely unshaken, it afforded an opportunity for developers to identify and resolve issues in the core code.
The biggest theft of Bitcoin happened at the Mt.Gox exchange. When the scandal broke, Japan-based Mt.Gox was the world’s biggest cryptocurrency exchange, handling about 70% of the world’s Bitcoin trades.
Over the second half of 2013, Mt.Gox ran into trouble with US authorities, its customers experienced delays in getting fiat money from the exchange, and doubts grew about the company’s solvency. In the beginning of February 2014, Mt.Gox suspended all withdrawals, and then 3 weeks later on February 28, 2014 it filed for bankruptcy protection. CEO Mark Karpelès claimed that 750,000 Bitcoins (worth about USD 473 million then) had been stolen from its wallets from 2011-2014.
In the ensuing investigation, Karpelès was arrested and found guilty of falsifying data to inflate Mt.Gox’s assets. He was given a suspended 30-month sentence by the Japanese courts in 2019. Mt.Gox’s creditors claimed that Mt.Gox owed them $2.4 trillion. Bankruptcy proceedings are still ongoing as of 2021. The missing Bitcoins, laundered but under heavy scrutiny, have yet to be recovered.
The first Bitcoin ETF
February 18, 2021
The Ontario Securities Committee approved the first Bitcoin exchange traded fund (ETF), which was made available for public trading on the Toronto Stock Exchange. This represented the most significant level of adoption of cryptocurrencies by the traditional banking and finance system to date. A place on the exchange floor opened the door to many possibilities for Bitcoin holders, especially institutional investors, looking to diversify or liquidate their Bitcoin holdings.
The relationship between crypto and the traditional financial system has grown closer over the years, most notably when Swiss institution Falcon Private Bank offered bespoke bitcoin investment services to its wealthy clients in 2017, and when the first Bitcoin ATMs appeared in Vancouver, Canada, literally allowing the man on the street to buy and sell Bitcoin for cash.
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