Bitcoin is the world’s first decentralized cryptocurrency that has been widely accepted. It is used as an alternative currency for exchanging goods and for forex trading.
Before Bitcoin was Created
There were several attempts to create an anonymous electronic case and currency system. Wei Dai published the B-money is 1998, as an anonymous e-cash system. There was BitGold, also a cryptocurrency, in which users are required to complete the proof-of-work system. Hal Finney also created the reusable proof-of-work using hashcash.
Bitcoin has finally come into existence when Satoshi Nakamoto – a pseudonym for a person or a group of programmers, developed the first Bitcoin. It has been said that Satoshi Nakamoto started working on bitcoin since 2007.
There was an article posted on the internet where Satoshi Nakamoto introduced the use of bitcoin as a peer-to-peer electronic cash system. Bitcoin has come into digital existence when Satoshi Nakamoto mined the first block of Bitcoin using the first open-source bitcoin client in 2009.
It was in January 12, 2009 when the first bitcoin transaction was established. Satoshi Nakamoto transferred 10BTC to Hal Finney as stated in the block #170 in the blockchain. Blockchain is a public ledger for Bitcoin where transactions can be seen.
On October 5, 2009, the New Liberty Standards established a buy and sell transaction on bitcoin with the exchange rate of USD 1,309.03 for 1 BTC. It was based on the cost of the electricity needed to mine a Bitcoin. After a few days, the New Liberty Standard bought 5,050 BTC at $5.02 from Sirius.
On July 11, 2010, Bitcoin has reached a lot of users because its Bitcoin version 0.3 was released and reported by a popular website, Slashdot.org. For this reason, the value of bitcoin has increased from $0.008 to $0.08 in just a few days.
On July 18, 2010, Jed McCaleb launched Mt.Gox, a website that’s dedicated for bitcoin exchange. After a few years, McCaleb sold the website to Mark Karpeles.
On June 1, 2011, Gawker, a popular technology website, has published an article that Silk Road has been opened to accept Bitcoin transactions. Silk Road is an underground market place in a deep web where one can buy illegal stuff like drugs. For this reason, the price of a Bitcoin soared from almost $10.00 to approximately $31.00
On June 19, 2011, Mt.Gox was hacked. The hacker has managed to download the older website’s administrative database that contain important and confidential information like passwords and email addresses. This action gave the hacker an authority to sell inexistent bitcoin for only $0.01. This action led to several hacker attacks attempt on other trading and bitcoin wallet website.
On November 18, 2013, US Senate held a hearing regarding the use of Bitcoin.
On March 26, 2014, the IRS of United States declared Bitcoin as a property and not as currency. Therefore, Bitcoin ownership is subject to capital gains tax, which is based on the owner’s Bitcoin buying power.
On October 22, 2015, the European Court of Justice declared that the exchange of Bitcoin and other cryptocurrencies are not subjected to value added tax in the European Union, because it has successfully been classified as a currency and not as a property.