Bitcoin rallied to an all-time high in April and brought a windfall to early investors. Those who had not invested in it until then began seeing a hope that they could pump their wealth securely and rapidly. But the early investments were also risky, as not much was known about digital assets then. However, those risk-takers were rewarded handsomely. That brought unmatched popularity to Bitcoin, which already had the distinction of being the world’s oldest cryptocurrency. And despite being a volatile currency, it appears to have stabilised around $40,000 (roughly Rs. 29.7 lakhs), at least for now. Let’s have a look at Bitcoin’s more than a decade-long journey.
How and when was Bitcoin created?
There was a lot of mystery around Bitcoin after it was first proposed in 2008, the most prominent being its creator: Satoshi Nakamoto, a pseudonymous person whose real identity is still unknown. Nakamoto posted a paper, entitled Bitcoin: A Peer-to-Peer Electronic Cash System, on a mailing list on cryptography. This attracted a lot of attention and a huge discussion ensued about it. Bitcoin price in India stood at Rs. 29.18 lakhs as of 7pm IST on August 2.
In 2009, the Bitcoin software was made available to the public. Its mining, the process through which new Bitcoins are created and transacted on the blockchain, began.
The valuation of Bitcoin took place the next year. Until then, Bitcoin was only mined, nobody had traded it so the real value of the coin was undetermined. On May 22, 2010, programmer Laszlo Hanyecz traded 10,000 Bitcoins to buy two pizzas. Had he controlled his pizza craving, those Bitcoins would have been worth $389 million (roughly Rs. 2,890 crores) today. A least the episode gave us the “Bitcoin Pizza Day”.
In 2011, the dominance of whatever market Bitcoin had captured by then was first challenged. Some alternatives to Bitcoin — such as Namecoin and Litecoin — began emerging. These rival coins offered improved services like better transaction speed, among some other claims. Today, there are more than 11,000 cryptocurrencies in circulation, according to CoinMarketCap, a market research website.
Bitcoin’s middle years
These years were some of the most volatile periods in Bitcoin’s history. In 2013, three years after Bitcoin was first valued, its price crashed for the first time. Bitcoin had breached the $1,000 (roughly Rs. 74,380) mark by then, but the price began to quickly slide to around $300 (roughly Rs. 22,310). In January 2014, the world’s largest Bitcoin exchange, Mt.Gox, suddenly went offline. With it, 850,000 Bitcoins too vanished and those who owned them never found out what happened to their Bitcoins. On 20 March 2014, Mt. Gox reported that it found 199999.99 Bitcoins in an old digital wallet, which brought the total number of bitcoins the firm lost down to 650,000, from 850,000. Investigation into the matter is still on.
In 2015, Bitcoins regained the $1,000 (roughly Rs. 74,380) value again. The next year, Ethereum posed a serious threat to Bitcoin’s market leadership. However, Bitcoin had gained so much popularity that by 2017 it was getting closer to the $10,000 (roughly Rs. 7.4 lakhs) mark. More people were joining the ecosystem and putting money into it. This year, the market cap of all cryptocurrency coins rose from $11 billion (roughly Rs. 81,820 crores) to over $300 billion (roughly Rs. 22,31,640 crores). Ethereum price in India stood at Rs. 1.9 lakhs as of 7pm IST on August 2.
At the start of 2018, Bitcoin price again crashed and it lost more than 80 percent of its value as several countries took steps to tighten regulatory oversight around cryptocurrency. Even in India, the RBI issued a note to regulate banks from trading or facilitating cryptocurrency transactions. Also this year, one of the biggest cryptocurrency heists took place. The BitConnect scam siphoned off $2 billion (roughly Rs. 14,880 crores) by duping investors.
The year 2019 started off quiet. But Bitcoin neared $8,000 (roughly Rs. 5.9 lakhs) by May. Then it lost nearly $1,000 (roughly Rs. 74,380) in June only to reach $14,000 (roughly Rs. 10.4 lakhs) by July. This year was relatively good for Bitcoin. The next year, the pandemic year, Bitcoin was still considered a fringe investment by the likes of Warren Buffet, who said it has “no value.” By the end of the year, however, Bitcoin nearly quadrupled, reaching an all-time high above $28,000 (roughly Rs. 20.8 lakhs). The Supreme Court of India set the RBI circular aside on cryptocurrency in May 2020.
This year, Bitcoin has had a roller-coaster ride so far. During the initial months, it had the backing of the tech tycoon Elon Musk, who later began supporting Dogecoin after environmentalists raised concern about Bitcoin mining driving up energy consumption. Dogecoin price in India stood at Rs. 15.11 as of 7pm IST on August 2. After reaching its lifetime high of $65,000 (roughly Rs. 48.3 lakhs), Bitcoin crashed massively in May. It has now recovered to some extent and was trading around $40,000 (roughly Rs. 29.7 lakhs) on Monday, August 2.