Source: CoinTelegraph; Compiler: Deng Tong, Golden Finance
This article explores the critical years 2009 to 2012, focusing on the global context and challenges surrounding the emergence of the mysterious pseudonym Satoshi Nakamoto. This series of articles begins with the creation of the Bitcoin protocol and outlines other important milestones in the early days of the digital currency space and the emergence of altcoins.
This period set the stage for the innovation and diversification that will characterize the future of the cryptocurrency ecosystem.
1. Satoshi Nakamoto and the Global Financial Crisis
Cryptocurrency as we know it today first appeared on October 31, 2008, when Satoshi Nakamoto, the anonymous creator of Bitcoin, sent an email to the cypherpunk mailing list containing a document titled “Bitcoin: Peer-to-Peer Electronic Cash” System” white paper in which members discuss cryptography and privacy-enhancing technologies: tools for social and political change.
At the time, the world was at the height of the 2007-2008 global financial crisis, one of the worst global economic crises in recent decades. The incident was blamed on excessive risk-taking by international financial institutions, the accumulation of toxic assets within banks, and the bursting of the U.S. real estate bubble.
In September, the crisis reached its peak. On December 15, 2008, Wall Street firm Lehman Brothers filed for bankruptcy. This ultimately led to a worldwide crisis of national economies, the so-called “Great Recession.”
2. The emergence of Bitcoin
On October 31, 2008, Satoshi Nakamoto sent an email to the cypherpunks mailing list and wrote an article about an electronic cash system that would be "entirely peer-to-peer, with no trusted third parties." , and shared the Bitcoin white paper.
The paper combines existing cryptography concepts with distributed ledger technology and introduces a decentralized system independent of central authorities. At the time, the winner likely didn’t know that the project would pave the way for the entire cryptocurrency industry to reach its peak in 2021 — worth $3 trillion.
Cryptocurrency market capitalization, source: CoinMarketCap
The Bitcoin blockchain came online on January 3, 2009, when Satoshi Nakamoto mined the genesis block and embedded a message: “January 3, 2009, The Times Chancellor is about to launch a second crackdown on banks Bailout." The message quoted a similar headline published by the British newspaper The Times on the same day. Many interpreted the message as a comment on the instability brought about by traditional finance.
A few days later, Satoshi Nakamoto sent an email announcing the launch of the first version of Bitcoin. On January 9, 2009, the anonymous Bitcoin creator explained the basics of Bitcoin, including how to mine and send Bitcoins. Satoshi Nakamoto also explained the total supply of Bitcoin and talked about what became known as the Bitcoin halving.
On January 12, 2009, the world's first Bitcoin transaction occurred when Satoshi Nakamoto sent 10 Bitcoins to American programmer Hal Finney. Finney is a regular on the cypherpunks mailing list and one of the earliest adopters of Bitcoin.
3. Bitcoin hits $1 on Mt. Gox
Fast forward to 2010, and events like the iconic Bitcoin Pizza Day and the founding of the now-defunct Mt. Gox occurred. On May 22, 2010, programmer Laszlo Hanyecz offered 10,000 Bitcoin for two large pizzas on the BitcoinTalk online forum. Jeremy Sturdivant accepted Hanyecz’s offer and delivered food in exchange for Bitcoin. This marks the first real-world transaction of Bitcoin.
On July 17, 2010, the Mt. Gox exchange was established. Programmer Jed McCaleb announced the creation of the exchange on the BitcoinTalk forum. The exchange provides users with a platform to trade Bitcoin, paving the way for future exchanges.
In 2011, Bitcoin experienced huge gains while also suffering huge losses. On February 9, 2011, the price of Bitcoin on Mt. Gox exceeded $1 for the first time, confirming the value of Bitcoin as a new financial asset. However, a few months later, Satoshi sent his last verified communication.
4. Satoshi Nakamoto fades out of sight, and altcoins appear
On April 26, 2011, Satoshi Nakamoto had an email exchange with Gavin Andresen, a key figure in the early Bitcoin community who took over the development of Bitcoin in December 2010. In this email, Satoshi expressed his desire to move to other projects and no longer be directly involved in the development of Bitcoin. This marked the end of Satoshi Nakamoto’s known interactions with the Bitcoin community.
One of the most important developments after Satoshi left was the emergence of altcoins. On October 7, 2011, Charlie Lee released Litecoin through the open source client on the developer platform GitHub. The network itself went live on October 13th.
In 2012, there were two key moments: the launch of cryptocurrency exchange Coinbase, and the issuance of XRP.
While it may not have been obvious to community members at the time, events in those early years influenced the technology's wider adoption. From the creation of Bitcoin to the departure of Satoshi Nakamoto, these events will go down in history as the building blocks that paved the way for a new asset class.
Stay tuned for the next article in the series tracking cryptocurrency history, which explores the expansion of Bitcoin and the early development of Ethereum.
