11 years ago bitcoin was worth 1 dollar: this is how the cryptocurrency grew into what it is today | Money

So it was in 2011 that bitcoin was worth 1 dollar for the first time. At that time, the crypto currency had been around for more than two years. As early as October 31, 2008, amid the global financial crisis, a certain Satoshi Nakamoto announced in his Bitcoin white paper his intention to create a virtual currency. On January 3, 2009, the very first Bitcoin block – the ‘Genesis Block’ – was ‘mined’.

That first block or piece of computer code contained the text ‘The Times 03/Jan/2009 Chancellor on brink of second bailout for banks’ incorporated. Satoshi Nakamoto refers to the global financial system, the close connection between monetary policy and politics, and the central banks as controlling powers that can print money, create inflation or control interest rate policy. Bitcoin had to be a response to this, a payment system in which users can transfer transactions from person to person, without the intervention of a central authority.

In those early years, there were only two ways to get bitcoin: either you had to ‘mine’ it, or you got it via peer-to-peer exchange with other users. At the time, this exchange was not without risk, because it required mutual trust.

Bitcoin’s value was barely above zero in 2010. Only a cryptographer and a few computer geeks were interested in it. In the same year, the first real platforms on which you could trade bitcoin were created. Mt.Gox was built in Shibuya, a well-known shopping district in the Japanese city of Tokyo.

In the same year, the first purchase with bitcoin also took place. Software programmer Laszlo Hanyecz had mined 10,000 Bitcoins with his computer. They were worth $30 at the time and he bought two pizzas with them at a restaurant in Florida. Converted to the value of bitcoin today, he paid nearly $444 million or EUR 388 million for his pizzas.

It was not until 2011 that the value of bitcoin rose sharply for the first time. At the beginning of January, the decentralized virtual currency was worth only USD 0.25, but by February 9, it rose to USD 1 for the first time.

Things moved quickly in the months that followed. Bitcoin rose to $32 in a few months, until Mt.Gox announced on June 19 that criminals had hacked hundreds of accounts and stole millions of dollars’ worth of bitcoins. In one day, Bitcoin’s value fell 99 percent to $0.01.

“Virtual currency Bitcoin crashes after cyberattack”, it sounded in De Tijd after the crash. “Damage to confidence in the young currency,” a banker told the financial newspaper. The hacked database revealed that many bankers used bitcoin. Their attention was drawn to the currency’s steep rise.

But not only bankers were interested in bitcoin. The coin also proved useful for criminals and drug users. ‘Silk Road’ also contributed to the breakthrough. Silk Road went online in February 2011. It was an online black market on the dark web. Payments were mainly made with bitcoin.

Silk Road grew into a worldwide known supermarket for illegal drugs. It helped make bitcoin known worldwide. In 2013, the FBI took the website offline. Ross William Ulbricht, the brain behind the website under the moniker ‘Dread Pirate Roberts’, was sentenced to life in prison. Afterwards, similar marketplaces arose, modeled on Silk Road.

Despite this, the founder of Silk Road still enjoys great respect as a pioneer in the bitcoin community. In 2021, for example, he was given the opportunity from prison to speak at the largest bitcoin conference in the world in Miami.

Satoshi Nakamoto, the mysterious inventor of bitcoin, had already disappeared from the scene. He was last heard from on April 23, 2011. He announced that he would no longer deal with Bitcoin. To this day, the identity of the bitcoin inventor is unknown.

mt. Gox, one of the first trading platforms, only became infamous in 2014. The exchange, which by then processed about 70 percent of all bitcoin transactions in the world, was hacked that year. mt. Gox had to admit that 850,000 bitcoins mysteriously disappeared and closed the doors. At the time, the stolen bitcoins had a value of approximately $350 million.

The hack of Mt. Gox caused huge price swings. Bitcoin was once worth $150, a little later $300, and then plummeted again to $150.

In the years that followed, the price slowly recovered, and the value of bitcoin gradually increased. At the beginning of 2017, the coin was worth about $900. That year, however, the price of bitcoin exploded by more than 2000 percent. On Tuesday, December 5, 2017, Bitcoin broke through the magical 10,000 euro barrier for the first time. By the end of that month, the coin was worth nearly $20,000.

At the same time as Bitcoin’s surge, the world became acquainted with ‘bitcoin millionaires’. The Dutchman Didi Taihuttu sold his entire property in September 2017. He put all the money in bitcoin. Bitcoin became worth six times as much in three months. However, at the beginning of 2018, bitcoin already lost up to 80 percent of its value. “An emotional rollercoaster,” said Didi.

In 2019, the crypto currency revived. The value rose from $3,700 at the start of the year to nearly $12,000 in the summer and fluctuated between $7,000 and $10,000 until the start of the coronavirus outbreak. In early March 2020, a low around $5,000 followed.

What followed next was unprecedented. The price continued to rise throughout the year. Young investors who were at home due to the corona crisis turned out to be open to risky investments. Payment platform Paypal announced that it would allow payments in bitcoin. Financial institutions and funds, also known as institutional investors, became increasingly interested in the currency.

Bitcoin was first described by experts as ‘the gold of the 21st century’. The crypto coin was increasingly seen as a digital store of value, which, like gold, cannot be increased indefinitely and must serve as a protection against inflation.

After all, Satoshi Nakamoto has set a limit of 21 million bitcoins in the bitcoin source code. Nakamoto wanted the stock to be scarce and exclusive, and it would remain. A clear difference with central banks, which can print as much money as they want. They did this in recent years to drive inflation up. Investors saw Bitcoin as a means of protecting themselves against inflation.

In the spring of 2021, bitcoin continued to be pushed back. Bitcoin could rise above $146,000, according to investment bank JP Morgan. Other bankers predicted rates of $318,000 and even $600,000.

After tech billionaire Elon Musk announced that his company Tesla itself invested in bitcoin and would also accept bitcoins as a means of payment, the price rose to new records. On February 16, 2021, the coin passed the historic $50,000 mark and was worth more than $64,000 by mid-April.

Anyone who decided to buy bitcoins at that time saw the price plunge sharply. This was partly due to a warning from the Chinese central bank that crypto coins are not real money with which you can pay. In the months that followed, the value fell by about 50 percent.

Not only China is concerned about the evolution of bitcoin. The United States also wants more supervision of cryptocurrencies, and in Europe the watchdog is warning investors that they could lose all their money. On the other hand, South American countries, led by El Salvador, became the first country in the world to make bitcoin legal tender in September 2021.

Ten days later, a statue was unveiled in Hungary for bitcoin founder Satoshi Nakamoto. Since Satoshi’s true identity is unknown, it is a mirrored bronze statue of a hooded figure. “The basic concept of bitcoin is that it belongs to everyone, from all the people on the internet, so we’re all a little bit Satoshi,” the creators of the image say.

In the second half of 2021, bitcoin doubled in value again. In November, the currency rose to a preliminary record high of about $69,000, or about $60,000. Then it went down again, until it even briefly fell below $30,000 in January. But don’t worry, according to Wall Street icon Cathie Wood, bitcoin could rise to more than $1 million by 2030.

In the meantime, experts are still not in agreement about where bitcoin will go. Believers see the cryptocurrency as the future of the global payment system. According to others, an unprecedented bubble is in the making. They think that it will explode and that it will turn out that bitcoin is worth 0 euros.

In the wake of the largest crypto coin, a lot of other crypto coins have emerged in recent years. The largest of these is the blockchain network Ethereum with the crypto currency Ether, invented by the Canadian-Russian computer programmer Vitalik Buterin. In recent years, meme coins or joke coins such as Dogecoin and Shiba Inu have also received a lot of attention after spectacular price jumps.

Also look at: How do crypto coins work?