In Oct 2008 a person or persons using the pseudonym Satoshi Nakamoto published a ground-breaking paper “Bitcoin – A peer-to-Peer Electronic Cash System” – very few people noticed. The project utilised a technology that has come to be known as blockchain combining strong cryptography and linked lists. It drew on work by the Linux development team to assist in managing this very complex project, where people from all over the world were working on the marvellous code that we know as Linux.
A few months later, the first release of the Bitcoin code took place – but again very few people outside the tech world and early adopters took notice. Bitcoin was a hobby, an experiment in new ways to transfer value.
Over the course of the next few years Bitcoin would slowly gain more attention from the general public. Shrouded in mystery, Bitcoin would often be referenced in hacking and cybercrime articles in the media. This perhaps undeserved infamy helped to draw more attention to Bitcoin and lead others to examine the source code.
One of the more interesting bits of Bitcoin’s history is 22nd May.
On that date in 2010, the first Bitcoin transaction in which a Florida man paid for two pizzas with the cryptocurrency took place. The day has become part of folklore, not because of the transaction, but more the price: the man in question paid 10,000 Bitcoins for the two pizzas which today is worth over $110million (at time of going to pixel!). On that day Laszlo Hanyecz agreed to pay 10,000 Bitcoins for two delivered Papa John’s pizzas. Organized on a bitcoin forum, the Florida man reached out for help. “I’ll pay 10,000 bitcoins for a couple of pizzas so I have some left over for the next day,” Hanyecz wrote.
A British man took up Hanyecz’s offer and bought the two pizzas for him in exchange for the 10,000 Bitcoins. Since the inception of Bitcoin, Hanyeczs’ pizzas have become more and more expensive. Nine months after the purchase Bitcoin reached parity with the US dollar making the two pizzas worth $10,000 and in 2015, the fifth anniversary of Bitcoin Pizza Day, the two pizzas were valued at $2.4 million. Today, the Bitcoin price is just over $11,000 making the pizzas worth $110 million.
Thanks to the open source ethos, thousands across the globe realised the potential this technology had and quickly began to create their own versions of Bitcoin. These were called alt coins.
Many alt coins rose to prominence, with some created just for fun like Dogecoin, or others such as Litecoin which aimed for faster block times using a different cryptographic algorithms.
More locally, Scotcoin was launched at the tail end of 2013 and distributed in early 2014 by Derek Nisbet, an IT specialist operating in the financial sector. Many hard lessons were learnt regarding security and the need for a team approach. Scotcoin transferred to the CounterParty protocol (of which more later) in late 2014 and in 2015 control and ownership of the project passed to the present team. Scotcoin has flourished and looks forward to a very bright future indeed.
Also in Scotland, during 2017, the first real estate sale conducted in cryptocurrency took place in Glasgow.
Some of the global enterprises that now accept Bitcoin as payment: include Paypal, Microsoft, Mozilla the developers of the Firefox browser, Expedia, Greenpeace, and Dell.
Banks and financial institutions are now working hard to embrace and extend cryptocurrencies and blockchain technology on general. Again – more of this later. There is a considerable dearth of deep understanding and knowledge of this nascent technology with only a few thousand estimated to truly comprehend it.