Bitcoin was born out of despair. Hidden among the lines of code in the first ever batch of the cryptocurrency was a headline from the frontpage of that day’s edition of The Times: “Chancellor on brink of second bailout for banks”.
It was 3 January, 2009, and the world was in the midst of the worst financial crisis since the Great Depression. Banks were collapsing, businesses were foreclosing and people were losing their homes.
It was the result of the worst excesses and greed of a capitalistic system that was teetering on the edge of comprehensive collapsed. But Satoshi Nakamoto, bitcoin’s pseudonymous creator, believed he had a solution.
It came in the form of a revolutionary “electronic cash system” that ditched centralised systems like banks and governments in favour of a peer-to-peer payments network supported by an online ledger known as a blockchain.
But for all its promise, it turned out to be a bumpy revolution. Nothing much actually happened for the first few years after bitcoin‘s birth, and it lay largely dormant until after the worst of the period’s economic turmoil had already passed.
After a brief price surge in 2012 it began to gain more widespread recognition and by late 2017 it was making frontpage headlines of its own as its market capitalisation briefly exceed $300 billion – more than the entire GDP of over 140 countries.
Some warned at the time that the phenomenal price growth was the result of a bubble – and, sure enough, it eventually crashed. Throughout 2018 its value tumbled repeatedly – and sometimes spectacularly – as naysayers pronounced its death and late investors lost millions.
By the start of 2019, a bitcoin was worth less than $4,000 and excitement for the great economic experiment had subsided before any truly mass-market use cases had even been realised.
But it was far from over. As the decade draws to a close, news about new digital currency projects have begun to emerge – from vast multi-national corporations like Facebook, to some of the world’s biggest economies.
With each positive news story about cryptocurrency, the price of bitcoin has grown, yet the volatility remains. For some, this unpredictability is one of the reasons it can never achieve its potential as a mainstream form of currency. independent.co.uk