5 July 2017

The Evolution of Bitcoin

05 July 2017
Bitcoin is a cryptocurrency, a digital asset designed to work as a medium of exchange that uses cryptography to control its creation and management, rather than relying on central authorities. In January 2009, the bitcoin network came into existence with the release of the first open source bitcoin client and the issuance of the first bitcoins.

Prior to the release of bitcoin there were a number of digital cash technologies starting with the issuer based ecash protocols of David Chaum and Stefan Brands. Adam Back developed hashcash, a proof-of-work scheme for spam control. The first proposals for distributed digital scarcity based cryptocurrencies were Wei Dai’s b-money and Nick Szabo’s bit gold. Hal Finney developed reusable proof of work (RPOW) using hashcash as its proof of work algorithm.

The value of the first bitcoin transactions were negotiated by individuals on the bitcoin talk forums with one notable transaction of 10,000 BTC used to indirectly purchase two pizzas delivered by Papa John’s.

On 6 August 2010, a major vulnerability in the bitcoin protocol was spotted. Transactions weren’t properly verified before they were included in the transaction log or blockchain, which let users bypass bitcoin’s economic restrictions and create an indefinite number of bitcoins. On 15 August, the vulnerability was exploited; over 184 billion bitcoins were generated in a transaction, and sent to two addresses on the network. Within hours, the transaction was spotted and erased from the transaction log after the bug was fixed and the network forked to an updated version of the bitcoin protocol. This was the only major security flaw found and exploited in bitcoin’s history

Fast forward to 2017
The number of businesses accepting bitcoin continues to increase. In January 2017, NHK reported the number of online stores accepting bitcoin in Japan had increased 4.6 times over the past year. BitPay CEO Stephen Pair declared the company’s transaction rate grew 3× from January 2016 to February 2017, and explained usage of bitcoin is growing in B2B supply chain payments.
Bitcoin gains more legitimacy among lawmakers and legacy financial companies. For example Japan passed a law to accept bitcoin as a legal payment method, and Russia has announced that it will legalize the use of cryptocurrencies such as bitcoin. And Norway’s largest online bank, Skandiabanken, have integrated bitcoin accounts.

In the first half of 2017, 1 bitcoin surpassed the spot price of an ounce of gold for the first time, and subsequently broke its all-time high, reaching US$1,402.03 on 1 May 2017, and over US$1,800 on 11 May 2017. On 20 May 2017, the price of one Bitcoin passed US$2,000 for the first time. In March 2017, the number of GitHub projects related to bitcoin passed 10,000.
Exchange trading volumes continue to increase. For the 6-month period ending March 2017, Mexican exchange Bitso saw trading volume increase 1500%. Between January and May 2017 Poloniex saw an increase of more than 600% active traders online and regularly processed 640% more transactions.

In June 2017, the bitcoin symbol was encoded in Unicode version 10.0 at position U+20BF (₿) in the Currency Symbols block.
Source: https://en.wikipedia.org/wiki/History_of_bitcoin
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