What is the history of Bitcoin (BTC) from its birth to the present?

In 2008, a white paper titled “Bitcoin: A Peer-to-Peer Electronic Cash System” suddenly appeared on the internet. Based on the theory outlined in this paper, Bitcoin (BTC) was developed and, in just over a decade since its creation, has grown into a global phenomenon that neither investors nor governments can ignore.

This article takes a comprehensive look back at the history of Bitcoin—from its inception to the present day—highlighting key milestones to trace its evolution and examine its broader social impact.

On October 31, 2008, an individual or group using the name Satoshi Nakamoto published a nine-page white paper on a cryptography mailing list.

The paper outlined a vision for a digital currency based on a decentralized ledger—known today as the blockchain—that would operate without a central authority and be resistant to tampering.

The paper described the design of a peer-to-peer electronic cash system, detailing how the issue of double-spending could be solved using a mechanism called Proof of Work (PoW).

Released in the wake of the 2008 financial crisis triggered by the collapse of Lehman Brothers, the white paper resonated with technologists and libertarians alike, who were disillusioned with traditional financial institutions.

The idea of a currency whose value could be maintained independently of any government captured the imagination of many and laid the foundation for a new era of digital finance.

On January 3, 2009, Satoshi Nakamoto mined the very first Bitcoin block, known as the "Genesis Block." Embedded in this block was the headline from the front page of The Times newspaper: "Chancellor on brink of second bailout for banks." This message was widely interpreted as a critique of the centralized financial system and a symbolic statement about the need for an alternative.

At the time, Bitcoin had no monetary value. A small group of developers participated in mining purely out of technical curiosity.

The Genesis Block generated a reward of 50 bitcoins, but these coins were sent to a specific address that cannot be spent, rendering them effectively inaccessible. As a result, the first 50 bitcoins are considered “dead coins” — a permanent part of Bitcoin’s origin story.

On May 22, 2010, Laszlo Hanyecz, a programmer living in Florida, posted on the Bitcoin Forum offering to exchange bitcoins for pizza. A student in London, Jeremy Sturdivant, responded and ordered two pizzas on Hanyecz’s behalf.

The transaction was completed in exchange for 10,000 BTC, making it the first known instance of Bitcoin being used to purchase a real-world good.

This event is now celebrated annually as "Bitcoin Pizza Day" and marks the first time Bitcoin was assigned a tangible economic value.

Around this time, peer-to-peer Bitcoin exchanges and small-scale trading platforms began to emerge, slowly establishing a market price.

Back then, 1 BTC was worth approximately $0.0025, meaning 10,000 BTC was equivalent to about $25. Today, that same amount would be worth hundreds of millions of dollars—an iconic example of how drastically Bitcoin’s value has evolved over time.

In 2011, the price of Bitcoin surpassed $1 for the first time, and soon skyrocketed to $10, then $100, signaling the beginning of broader public interest. At the same time, Bitcoin’s pseudonymous nature made it the preferred currency on Silk Road, an underground marketplace on the dark web known for facilitating illegal transactions.

Silk Road served as a platform for trading illicit drugs, weapons, counterfeit goods, and more. By 2013, the site had amassed nearly 960,000 registered users. In October of that year, the FBI shut down the site and arrested its founder, Ross Ulbricht, who was later convicted of money laundering, drug trafficking, and other charges. He was sentenced to life in prison—but was pardoned by President Donald Trump on January 21, 2025.

These events brought intense media attention and marked a turning point in how governments approached cryptocurrency. It was during this period that regulatory efforts around Bitcoin began to gain momentum, signaling that its growing influence could no longer be ignored by authorities worldwide.

Mt. Gox, once one of the world’s largest Bitcoin exchanges based in Japan, lost approximately 850,000 BTC due to a major hacking incident. Of that amount, about 750,000 BTC belonged to customers and 100,000 BTC were company-owned. At the time, the total loss was valued at approximately around 460 million USD. Later, about 200,000 BTC were discovered in an old wallet, bringing the final unrecovered amount to roughly 650,000 BTC.

The incident cast serious doubts on the security of Bitcoin itself and the management practices of cryptocurrency exchanges. In fact, in June 2011, Mt. Gox suffered unauthorized system access that led to a flood of fake sell orders, causing the nominal price of Bitcoin to temporarily plummet to just one cent. However, the crash was corrected within minutes and the price quickly recovered.

On February 28, 2014, Mt. Gox filed for civil rehabilitation with the Tokyo District Court. However, prospects for recovery quickly faded, and on April 16 of the same year, the court dismissed the petition and issued an order for asset preservation. On April 24, formal bankruptcy proceedings were initiated.

Subsequently, in August 2015, former CEO Mark Karpelès was arrested by Japanese authorities on charges of embezzlement and unauthorized creation and use of private electronic records. In court, he was found not guilty of embezzlement but guilty of manipulating his account balance through falsified data. He received a sentence of two and a half years in prison, suspended for four years.

The Mt. Gox incident led to a temporary plunge in Bitcoin’s price and severely damaged public trust in the cryptocurrency market. However, it also served as a critical wake-up call for the entire industry. In Japan, the incident prompted the development of a legal framework for cryptocurrency exchanges, including a registration system, mandatory separation of customer assets, and anti-money laundering measures, all of which were codified in the revised Payment Services Act enacted in 2017.

Moreover, security measures across the industry were significantly strengthened. The use of cold wallets, implementation of multi-signature technologies, and establishment of internal auditing systems became widespread. User awareness also evolved, with the notion of self-custody—managing one’s own assets responsibly—gaining traction. The Mt. Gox case stands as a major turning point in the development of the cryptocurrency industry, deeply influencing the evolution of both the market and its regulatory environment.

Bitcoin’s mining rewards are designed to be automatically halved approximately every four years through an event known as a “halving.” This mechanism slows the pace of new issuance and increases scarcity as the total supply approaches its maximum cap of 21 million coins.

Historically, the rewards have decreased as follows: from 50 BTC to 25 BTC in 2012, then to 12.5 BTC in 2016, 6.25 BTC in 2020, and further down to 3.125 BTC in 2024.

This reduction in supply is widely believed to heighten Bitcoin’s perceived scarcity in the market, thereby increasing upward pressure on its price.

Full-scale Entry by Institutional Investors and Major Corporations

In fact, after each previous halving, Bitcoin’s price has risen significantly, reaching new all-time highs during each cycle. Notably, following the May 2020 halving, the price surged more than sixfold within a year, hitting an all-time high of approximately $69,000 in November 2021.

Behind this sharp rally was not only the increased scarcity on the supply side, but also the growing participation of institutional investors and large corporations. In August 2020, U.S.-based MicroStrategy announced its first corporate investment in Bitcoin and continued to expand its holdings over time.

In early 2021, Tesla revealed that it had purchased $1.5 billion worth of Bitcoin and, for a brief period, even accepted Bitcoin as payment for vehicles. Meanwhile, PayPal, a major player in electronic payments, launched services in October 2020 allowing U.S. users to buy, hold, and sell cryptocurrencies, including Bitcoin, and expanded into online payments using crypto in 2021.

These developments significantly enhanced Bitcoin’s credibility and utility, accelerating its mainstream adoption.

While some experts caution that a halving does not guarantee a price increase, it is an undeniable fact that the reduction in new supply emphasizes Bitcoin’s scarcity and influences market sentiment—both of which play key roles in shaping price dynamics.

El Salvador Becomes the First Country to Adopt Bitcoin as Legal Tender

On September 7, 2021, El Salvador became the first country in the world to adopt Bitcoin as legal tender. This historic decision was positioned as an innovative solution to the country’s longstanding economic challenges.

Background and Objectives

Economic Challenges: Approximately 70% of El Salvador’s population does not have access to traditional banking services. By adopting Bitcoin as legal tender, the government aimed to promote financial inclusion and expand access to digital payments.

Government Initiatives: As part of the Bitcoin rollout, the government introduced a dedicated digital wallet called “Chivo,” offering citizens $30 worth of Bitcoin as an incentive for downloading and using the app.

Impact of Implementation

Initial Reactions: The adoption of Bitcoin as legal tender garnered significant attention both domestically and internationally. However, in its early stages, the rollout faced technical difficulties and a lack of public understanding, resulting in limited real-world usage. Surveys showed low adoption rates, with most businesses continuing to conduct the majority of their transactions in U.S. dollars rather than Bitcoin.

International Pressure: El Salvador’s Bitcoin policy drew concern from international institutions such as the International Monetary Fund (IMF), which warned of macroeconomic risks and threats to financial stability. In 2025, legislative amendments are expected to be introduced, effectively revoking Bitcoin’s status as legal tender.

Thus, while El Salvador’s move was a bold and pioneering initiative, it also revealed numerous operational and reputational challenges on both domestic and international fronts.

Pros and Cons of Using Bitcoin as Legal Tender

The decision to use Bitcoin as legal tender presents both advantages and disadvantages. The case of El Salvador highlights these aspects in practice.

Advantages

• Financial Inclusion: Bitcoin offers access to financial services for unbanked populations. In El Salvador, where around 70% of citizens lack bank accounts, this was seen as a way to bridge the financial gap.
• Lower Remittance Costs: With remittances comprising a significant portion of El Salvador’s GDP, using Bitcoin was expected to reduce transaction fees and improve the efficiency of cross-border transfers.
• Economic Diversification: The adoption of Bitcoin was also intended to attract foreign investment, create new employment opportunities, and stimulate the growth of the digital economy.

Disadvantages

• Price Volatility: Bitcoin’s extreme price fluctuations pose a major challenge to its use as a stable currency. Sudden drops in value could significantly impact national fiscal stability.
• International Concerns and Pressure: Institutions such as the IMF expressed strong reservations, warning that legalizing Bitcoin could undermine the stability of the financial system.
• Low Real-World Usage: Despite its legal status, Bitcoin failed to gain widespread traction. Many businesses refused to accept it, and the U.S. dollar remained the dominant medium of exchange.

In summary, while the adoption of Bitcoin as legal tender holds certain theoretical advantages, its practical implementation faces serious challenges in terms of effectiveness and sustainability. El Salvador’s experience may serve as a valuable case study for other nations considering similar initiatives.

Public Reception and Usage

Despite government efforts, Bitcoin adoption among the Salvadoran population has not met expectations. The following outlines the key realities of usage:

• Low Usage Rate: Surveys indicate that approximately 92% of citizens have not used Bitcoin, even after it was declared legal tender.
• Chivo Wallet Usage: Although the government offered $30 worth of Bitcoin to users who downloaded the Chivo wallet, most households did not continue using the app for transactions. Reports suggest that over 60% of early users did not engage in ongoing use.
• Commercial Acceptance: While the law mandated that all businesses accept Bitcoin, in practice, only about 20% complied, and just 5% of transactions were conducted in Bitcoin.

Ultimately, Bitcoin has not achieved widespread acceptance among the general public in El Salvador. Despite government incentives, cash remains the preferred method of payment for many, and Bitcoin’s usage has remained largely symbolic. This situation underscores the practical difficulties of implementing a national cryptocurrency policy.

In 2022, interest rate hikes in the United States—implemented as a measure against inflation—had a significant impact on risk assets, including Bitcoin. Prices plunged sharply, and at one point, Bitcoin fell below the $20,000 mark once again.

Furthermore, in November of the same year, one of the world’s largest cryptocurrency exchanges, FTX, collapsed, sending shockwaves throughout the industry. The so-called “FTX shock” undermined trust in centralized exchanges and renewed awareness of the importance of self-custody wallets and decentralized finance (DeFi).

Background of the FTX Collapse

FTX’s downfall stemmed from the misappropriation of customer funds. Specifically, large sums were secretly transferred to its sister company, Alameda Research, which triggered a massive financial scandal. On November 11, 2022, FTX filed for Chapter 11 bankruptcy protection in the United States, and its CEO, Sam Bankman-Fried (SBF), resigned.

The collapse severely damaged trust in the crypto market, causing a sharp drop in the prices of major digital assets, including Bitcoin. Bitcoin, in particular, reportedly fell by around 75% from its peak before the collapse. This incident became the catalyst for what is now referred to as the “Crypto Winter”—a prolonged period of market stagnation.

Impact of the FTX Shock

The FTX collapse led to heightened volatility across the crypto market. Even stablecoins—previously regarded as relatively secure—were affected, contributing to a broader sense of unease among investors. In response, regulatory authorities around the world accelerated efforts to strengthen oversight of the cryptocurrency industry. In the United States, in particular, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) ramped up supervision, emphasizing the need for increased transparency and stricter governance among exchanges.

In January 2024, the U.S. Securities and Exchange Commission (SEC) approved multiple spot Bitcoin ETFs, allowing investors to purchase Bitcoin through traditional brokerage accounts.

This approval marked a major milestone, enhancing the credibility of the Bitcoin market and paving the way for broader participation by institutional investors. It not only opened legal investment avenues for individual investors but also enabled pension funds, insurance companies, and other large institutions to invest in Bitcoin within a regulated framework.

Spot Bitcoin ETFs had already been launched in countries such as Canada and parts of Europe, where regulatory frameworks were more advanced. With the arrival of these ETFs in the U.S., Bitcoin—once avoided due to its volatility and custody challenges—is now expected to become part of a wider range of investment portfolios.

Once considered an “experimental digital currency,” Bitcoin is now often referred to as “digital gold,” serving as both an inflation hedge and a store of value. The key reasons behind this designation are summarized below.

Four Reasons Why Bitcoin Is Called Digital Gold

Scarcity

Bitcoin’s total supply is limited to 21 million BTC, a characteristic similar to the finite supply of physical gold. This scarcity positions Bitcoin as a store of value, much like gold has historically been.

Decentralization

Bitcoin is not controlled by any central bank or government, allowing it to function as a hedge against economic uncertainty and political risk. This decentralized nature mirrors the role gold has played over many years.

Store of Value

Bitcoin is frequently used as a hedge against inflation and the devaluation of fiat currencies. Especially during periods of economic instability, its role as a store of value becomes more pronounced. Many investors hold Bitcoin as part of their portfolios with the expectation that it will preserve their wealth over time.

Convenience as a Digital Asset

As a fully digital asset, Bitcoin can be traded easily online. This high level of liquidity and the ability to conduct transactions quickly make it more convenient than physical gold.

As these similarities with gold have become increasingly recognized, Bitcoin has also gained greater acceptance in financial markets—for example, through the approval of Bitcoin ETFs (exchange-traded funds).

Although short-term price volatility remains significant, Bitcoin has steadily grown and gained adoption over the past 15 years. Alongside regulatory progress, its scarcity, decentralization, utility as a store of value, convenience as a digital asset, and broad market recognition are contributing to its transformation from a speculative trend into an integral part of the global financial ecosystem.

Since its inception in 2009, Bitcoin has undergone a turbulent journey—from being exchanged for pizza to gaining recognition as an asset, becoming legal tender at the national level, and ultimately receiving approval for ETFs. Its evolution is not merely a story of price appreciation, but one that has influenced a wide range of domains, including finance, technology, and politics.

As regulatory frameworks and technological advancements continue to progress, Bitcoin is poised to enter a new phase. Understanding the history of Bitcoin offers more than just insight into cryptocurrencies—it also provides a key to interpreting the shifting economic structures and values of modern society.

Image: Shutterstock

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