For the first time the principles laid down in bitcoin were expressed by Dai Wei back in 1998. But the bitcoin story started only in 2008. The developer (or development team) posted a document on the Internet – “Bitcoin: a Peer-To-Peer Electronic Cash System” under the pseudonym of Satoshi Nakamoto.
For the first time a concept called “Crypto-Currency” was described in 1998 by Wei Dai in cyber-punk newsletter by e-mail, offering the idea of a new form of money that uses cryptography.
It described the principle of bitcoin operation. The source code of the first program-wallet was written and published in open access as well.
Other developers interested in the idea of bitcoin refined it by the new useful functions. In 2009 the work on the algorithm of bitcoin was completed. The system was launched. Few people knew about bitcoin for the first time. Bitcoin small network members mined bitcoin on their computers and it was unclear what’s next and what to do with the bitcoins.
In may 2010, one American posted an announcement that he was ready to order a pizza (2 pizzas for 10,000 bitcoins) and pay for it with bitcoins. At that time 10000 bitcoins = $40-50.
There appeared a man who ordered a pizza for him and exchanged it for bitcoins. In August 2010 there was a sharp value increase after a Bitcoin launch post on Slashdot technical site – in one day bitcoin increased more than in ten times.
The first transaction using the virtual bitcoin currency – buying pizza in the spring of 2010.
In February 2011 Jed McCaleb launched the world’s first stock exchange (Mt.Gox), which exchanged bitcoins to actual money. As a result in November 2011, the cost for one bitcoin rose to 50 cents.
The opening of the Silk Road website in 2011 was the next reason of bitcoin popularity growth. The site was used for illegal things purchasing/saling. So, thanks to it millions of people learned about bitcoin. And of course this fact reflected in its price. Bitcoin cost $4-6 in 2012.
In the early 2013 bitcoin price was $10. And every day it increased by a dollar or two. People began to buy bitcoins with the aim to sell them more expensive. In February bitcoin cost $30 – 300% profit in 1 month. In March, the cost exceeded $100, and in April- $200.
The profitability of bitcoin was 2000% since the beginning of the year, even in the most erotic dreadm even the most daring trader couldn’t have dreamt about it. And it happened not during a year, but within 3 months. All these news have increased bitcoin’s popularity and more and more people learned about it and, carrying the money to exchange.
But then something happened that usually occurs on the exchanges when greedy people come. Someone who has large amount of coins made a “drain” and brought down the rate from 250 to $ 60 for a piece. This act in some measure turned out to be a cold shower for all who were involved in the trading process, but fortunately didn’t cause them to turn away from bitcoin. It was impossible to stop a snowball launched a year ago. Despite a significant cost reduction, Bitcoin had another feature enough for traders – significant course fluctuation. During one day the price could vary within 30-40 dollars in any direction, and that’s enough to obtain significant profits.
Moreover the Mass Media was full of news, rumors and tales about bitcoin, what – again – increased the number of people aware, and, then people to use it.
The news about Ross Ulrica, Silk Road owner, arrest and the site closing dropped the bitcoin price by 50%
In October, the news about Ross Ulric, Silk Road owner, arrest and the site closing dropped the bitcoin price by 50%, but during the day the price recovered, because in 2013 more and more sites accepting the Bitcoin began to appear. It created a constant demand, which wasn’t based on the Silk Road anymore.
Afterwards the U.S. government and other countries took bitcoin up: they began considering and analyzing bitcoin at the state level to determine the country’s policy in this direction.