History of bitcoin

[2] 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.

[6] 12 years prior to creating Bitcoin the NSA published the white paper "How To Make A Mint: The Cryptography of Anonymous Electronic Cash" [7] The idea was independently rediscovered by Adam Back who developed hashcash, a proof-of-work scheme for spam control in 1997.

[13] Later that year, on 31 October, a link to a paper authored by Satoshi Nakamoto titled Bitcoin: A Peer-to-Peer Electronic Cash System[14] was posted to a cryptography mailing list.

[30] "Satoshi Nakamoto" is presumed to be a pseudonym for the person or people who designed the original bitcoin protocol in 2007 then released the whitepaper in 2008 and finally launched the network in 2009.

Fast Company's investigation brought up circumstantial evidence linking an encryption patent application filed by Neal King, Vladimir Oksman and Charles Bry on 15 August 2008, and the bitcoin.org domain name which was registered 72 hours later.

[36] Later in 2013 the Israeli researchers Dorit Ron and Adi Shamir pointed to Silk Road-linked Ross William Ulbricht as the possible person behind the cover.

The first notable retail transaction involving physical goods was paid on May 22, 2010, by exchanging 10,000 mined BTC for two pizzas delivered from a Papa John’s in Jacksonville, Florida.

[59] In Charles Stross's 2013 science fiction novel Neptune's Brood, the universal interstellar payment system is known as "bitcoin" and operates using cryptography.

Gox experienced processing delays due to insufficient capacity[69] resulting in the bitcoin exchange rate dropping from $266 to $76 before returning to $160 within six hours.

[71] In April 2013, Eric Posner, a law professor at the University of Chicago, stated that "a real Ponzi scheme takes fraud; bitcoin, by contrast, seems more like a collective delusion.

[79][80] On 6 August 2013, Federal Judge Amos Mazzant of the Eastern District of Texas of the Fifth Circuit ruled that bitcoins are "a currency or a form of money" (specifically securities as defined by Federal Securities Laws), and as such were subject to the court's jurisdiction,[81][82] and Germany's Finance Ministry subsumed bitcoins under the term "unit of account" – a financial instrument – though not as e-money or a functional currency, a classification nonetheless having legal and tax implications.

[84] In October 2013, the FBI seized roughly 26,000 BTC from website Silk Road during the arrest of alleged owner Ross William Ulbricht.

In September 2014, TeraExchange, LLC, received approval from the U.S. Commodity Futures Trading Commission "CFTC" to begin listing an over-the-counter swap product based on the price of a bitcoin.

[116] In January 2015, Coinbase raised US$75 million as part of a Series C funding round, smashing the previous record for a bitcoin company.

[citation needed] In March 2016, the Cabinet of Japan recognized virtual currencies like bitcoin as having a function similar to real money.

[127] In July 2016, researchers published a paper showing that by November 2013 bitcoin commerce was no longer driven by "sin" activities but instead by legitimate enterprises.

[132] 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.

[143] In May 2018, the United States Department of Justice investigated bitcoin traders for possible price manipulation,[144] focusing on practices like spoofing and wash trades.

[146] In October 2018, Nelson Saiers installed a 9-foot inflatable rat covered with bitcoin references and code in front of the Federal Reserve as a homage to Satoshi Nakamoto and protests in New York City.

[149] On 2 July 2020, the Swiss company 21Shares started to quote a set of bitcoin exchange-traded products (ETP) on the Xetra trading system of the Deutsche Boerse.

[150] On 1 September 2020, the Wiener Börse[clarification needed] listed its first 21 titles denominated in cryptocurrencies like bitcoin, including the services of real-time quotation and securities settlement.

[154] On 19 January 2021, Elon Musk placed the handle #Bitcoin in his Twitter profile, tweeting "In retrospect, it was inevitable", which caused the price to briefly rise about $5,000 in an hour to $37,299.

[158] After 49 days of accepting the digital currency, Tesla reversed course on 12 May 2021, saying they would no longer take bitcoin due to concerns that "mining" the cryptocurrency was contributing to the consumption of fossil fuels and climate change.

[164] On June 7, 2021, United States Justice Department recovered $2.3 million worth of bitcoin paid by Colonial Pipeline to a criminal cyber group in cyber-security ransom.

This split resulted in two separate transaction logs being formed without clear consensus, which allowed for the same funds to be spent differently on each chain.

On 18 March 2013, the Financial Crimes Enforcement Network (or FinCEN), a bureau of the United States Department of the Treasury, issued a report regarding centralized and decentralized "virtual currencies" and their legal status within "money services business" (MSB) and Bank Secrecy Act regulations.

[277][278][279] In a statement that once occupied their homepage they announced on 3 March 2014 that "As Flexcoin does not have the resources, assets, or otherwise to come back from this loss [the hack], we are closing our doors immediately.

[283] On 19 December 2017, Yapian, a company that owns the Youbit cryptocurrency exchange in South Korea, filed for bankruptcy following a hack, the second in eight months.

In 2012, the Cryptocurrency Legal Advocacy Group (CLAG) stressed the importance for taxpayers to determine whether taxes are due on a bitcoin-related transaction based on whether one has experienced a "realization event": when a taxpayer has provided a service in exchange for bitcoins, a realization event has probably occurred and any gain or loss would likely be calculated using fair market values for the service provided.

"[285] In August 2013, the German Finance Ministry characterized bitcoin as a unit of account,[83][286] usable in multilateral clearing circles and subject to capital gains tax if held less than one year.