The Story of Bitcoin From Less Than USD 25

Written by Ms.Florence Ip and Dr. Kyle Wong

Blockchain development started from a whitepaper of Bitcoin posted by Satoshi Nakamoto in 2009. According to the whitepaper, the idea came from The Financial Crisis in 2008 when many major banks and insurance companies had devastated their businesses by over-leverage. Many governments around the world turned on the money printing machines to save those greedy bankers and financial institutions from bankruptcy. There was a risk that inflation could soar and asset prices of housing, food and energy could increase to a level that made most people suffered. Anarchism got more supported by people from main street, who loved Bitcoin because of the idea of decentralization without any governor or financial institution in the middle of their transactions. Advocates started their journey to promote Bitcoin.

A couple travelled around the United States and asked merchants to accept their Bitcoin as payments but failed. All Bitcoin holders like to make bitcoin a payment currency worldwide, and their noise got louder and louder around discussion forums on the internet. On 22 May 2010, a guy in Florida posted a comment ‘I will spend 10,000 Bitcoin for 2 pizzas. I will give Bitcoin if I get 2 pizzas delivered to my house.’ 10,000 Bitcoin was valued USD 41, and 2 pizza was priced USD 25 at that time. Another guy in the United Kingdom read his post and ordered pizza delivery for him. They completed the first Bitcoin transaction and named that day ‘Bitcoin Pizza Day’.

In the early stage, Bitcoin did not have a smooth path because many governments considered it as an anti-government vehicle. They tried to ban Bitcoin transactions, told notorious story and established law to make it illegal. People searched everywhere to find Satoshi Nakamoto for years but not succeeded.

On the other hand, computer scientists have been exploring further in Blockchain technology. Bitcoin was built under the protocol of ‘Proof-of-Work’ (PoW) which required a significate amount of computer power to proceed with verification to prevent double-spending in an account. Computing power means huge energy consumption. In 2013, another better idea, ‘Proof-of-Stake’ (PoS), was proposed in Ethereum. it solved the problem caused by PoW. It does not consume a huge amount of energy. Its verification process is at least twice as fast as Bitcoin because the verifying work will only assign to few largest stakeholders anyway. Given this simple and faster infrastructure, Blockchain development projects in different industries tick off everywhere geographically.

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