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A Compendium of Crypto Important Milestones

A Compendium of Crypto Important Milestones

Being the splendid epitome of innovation, cryptocurrencies have become the fastest-growing and best-performing asset class of the decade. Let’s look back at the history of the booming crypto market and take a moment to appreciate how far we’ve come.

15 years in crypto

The 2000s: The Inception of Bitcoin

Even though some may think that the pseudonymous Satoshi Nakamoto laid the groundwork for the development of crypto, he was indeed inspired by the concept of public key cryptography, first introduced to the public by two Stanford scholars in 1976, and electronic money, which was first explored by the American cryptographer David Chaum in the 1980s. The 1990s saw several attempts at building an anonymous, competent digital cash system; all of them have undoubtedly helped shape the future of cryptocurrencies.

However, prior to Bitcoin there was another disruptor of the global financial system: the so-called “dot-com bubble”. The Internet we’re now so familiar with was once a life-changing innovation that, when piled up with excessive speculation in the housing market in the U.S. and other financial instabilities across the world, had triggered the Great Financial Crisis in 2008. Bitcoin came into existence the same year, trying to untangle the problem while pursuing freedom in any way imaginable.

2008 - 2009: Bitcoin Network

Nakamoto purchased the domain and published the Bitcoin whitepaper there in 2008. This paper describes the Proof-of-Work (PoW) consensus application for the Bitcoin Network, a “peer-to-peer electronic cash system” with a limited supply (21 million) of its tokens. The genesis block was mined in 2009, releasing 50 Bitcoin into circulation. A message encrypted in the genesis block referred to the 2008 financial crisis and how governments rescued banks. Nakamoto was also the first to conduct a Bitcoin transaction, on the 12th of January, 2009.

One thing that stood in the way of Bitcoin enthusiasts this year was Bitcoin mining difficulty, which materialised into the amount of computer power and energy consumed. Bitcoin mining requires specialised hardware machines with exceptionally strong GPUs; it is this inherent characteristic of PoW that keeps the network secure and fair but also makes Bitcoin the object of environmental criticism.

2010: Bitcoin Pizza Day

One key event for Bitcoin - and maybe for the whole crypto market as well - occurred on May 22, 2010 where a guy in Florida paid 10,000 BTC for his two Papa John’s pizzas. That was the first Bitcoin commercial transaction, despite the fact that the first two crypto exchanges, and Mt.Gox, were established, allowing for the first Bitcoin public trade at US$0.03/BTC earlier this year.

Mysteriously, Satoshi Nakamoto disappeared around December 2010. Throughout the years, several have claimed to be Nakamoto, but his or their true identity has never been revealed.

2011-2014: The First of Everything Else

You might very well think of this period as the crypto space’s stepping stone, where new concepts were developed and refined gradually.

2011: The First Altcoins

As Bitcoin started to capture public attention, others created their own tokens as the alternative of Bitcoin - now generally known as “altcoins”. Two first altcoins officially acknowledged were Namecoin (NMC) by Vincent Durham and Litecoin (LTC) by Charlie Lee, both forked from the Bitcoin source code and still active today. Litecoin is currently the 20th largest cryptocurrency by market capitalisation.

The oldest crypto wallets are software wallets named BitPay and Electrum. As of today, Electrum remains Bitcoin-only, whereas BitPay has expanded their services over the years to support other cryptocurrencies.

2011 also marked a new milestone in Bitcoin price growth as it reached parity with the US-Dollar (USD), Euro (EUR) and the British Pound Sterling (GBP), one after the other. That might be the reason behind WikiLeaks’ decision to accept donations in Bitcoin.

2012: BTC First Halving

In addition to Bitcoin’s finite supply, the design of Bitcoin consolidates the theory of scarcity with one pre-programmed feature: Bitcoin Halving, which is set to take place roughly every four years. The block emission was reduced from 50 BTC per block to 25 BTC per block, contributing to the ten-fold increase in BTC price from US$12 on the 28th November, 2012 to US$1,217 one year later. Bitcoin slowly gained traction, leading to the establishment of the Bitcoin Foundation. A record of 1,000 merchants began to accept BTC payment via BitPay.

Coinbase had successfully raised US$600,000 for formation. Founded by Mihai Alisie and Vitalik Buterin, Bitcoin Magazine published its first issue in the same year.

Regarding sovereign adoption, Estonia was the first economy to use blockchain technology for their digital IDs project.

2013: The First ICO

2013 was a remarkable year where Bitcoin surpassed the US$1,000 mark and Reddit accepted BTC for gold membership. Darknet market Silk Road experienced a shut-down with 26,000 BTC confiscated by the FBI. In October, the first Bitcoin ATMs were installed in Vancouver, Canada, converting Bitcoin into cash and vice-versa.

Most significant was the new type of crowdfunding known as Initial Coin Offering (ICO), prompted by the successful fundraising of Mastercoin (OMNI). The project received 4,740 (around US$500,000) Bitcoin, mostly from members of the forum, to develop their platform. Little did Mastercoin’s founders know that their idea had set the trend for multiple blockchain projects in the following years, and to some extent - paved the way for the emergence of Ethereum two years later.

2014: The First NFT and Stablecoins

The start of 2014 was quite gloomy as Mt.Gox, the original Bitcoin exchange that covered 70% of the world's transactions, was hacked and filed for bankruptcy. 850,000 Bitcoin (US$460 million at the time) stayed unaccounted due to this event, bringing the needed awakening for unwary crypto adopters. That caused a 50% drop in Bitcoin price; people started to shift their focus to other blockchain applications: NFT, stablecoin, privacy coin and hardware wallet:

- January 2014: DASH (originally XCoin), the first privacy coin, i.e. a coin designed to obscure the transaction flow, was created as a fork of Bitcoin;

- May 2014: “Quantum”, the first NFT ever, was minted by the digital artist Kevin McCoy on the Namecoin blockchain;

- July 2014: bitUSD, a token issued on the BitShares blockchain, defines the term stablecoin by pegging its value to the market value of local currencies such as the US-Dollar. Another invention announced the same month was the first hardware wallet for crypto by Trezor, with Ledger quickly following the path. Ethereum concluded the month with 31,591 Bitcoin raised after 42 days;

- September 2014: NuBits was the second stablecoin to be created. This month also saw the first over-the-counter Bitcoin swap approved by the U.S. Commodity Futures Trading Commission (CFTC);

- November 2014: Tether came up with the first 100% real-asset backed stablecoin, USDT.

Undeterred by the market confusion, many listed companies still announced the new Bitcoin payment option, including Stripe, Paypal, Dell, Microsoft, etc.

2015-2018: The Rise of Cryptocurrencies

Numerous teams bootstrapped the development of their cryptocurrency projects through ICOs, aiming to become the successor of Ethereum.

2015: The Origin of Ethereum

Ethereum’s first mainnet - Frontier - went live in 2015. That is approximately two years after Vitalik Buterin and his team proposed their whitepaper. Subsequently, they put forward the proposal for the ERC-20 token standard, which is absolutely critical for the birth of smart contracts and more diverse blockchain applications. Ethereum’s price swayed under US$1, but investors all agreed on the limitless potential of the project.

This was in general a positive year for cryptocurrencies since Coinbase became the first regulated crypto exchange in the U.S. and another U.S.-based exchange, Gemini, was launched. Bitcoin was featured on The Economist’s cover, referred to as “The Trust Machine”, and continued to be Stripe’s main focus as the payment startup started the BTC payment integration for merchants.

Furthermore, financial institutions’ interest in blockchain technology grew substantially: J.P.Morgan, Goldman Sachs and Bank of America made a pact to create the blockchain framework across the banking industry, while NASDAQ conducted the first blockchain trial.

2016: The DAO Hack

Homestead went live as Ethereum’s second mainnet. A new form of trustless organisation was established on the Ethereum blockchain thanks to the invention of smart contracts. The project name, Decentralised Autonomous Organisation (The DAO), is now used to describe all community-led entities built on blockchain. The hype surrounding this revolutionary project lies in its unique design of equal authority distribution and the fact that it was the first high-profile project on Ethereum network, having raised US$150 million in Ethereum at the time. However, before it truly took off, a hacker managed to exploit vulnerabilities in its code, stealing US$3.6 million (some said US$14 million) from The DAO’s fund.

The Ethereum community as a whole took a big hit because 14% of the circulating Ethereum was stored in The DAO’s smart contracts when the attack occurred. Several questions concerning the security and even the viability of the one-year-old network arose, urging miners, exchanges and node operators to implement the Ethereum hard fork at block 192,000.

Bitcoin underwent the Second Halving, which reduced the amount of BTC produced per block from 25 to 12.5. It was not the sole reason behind Bitcoin’s record-breaking price in 2017, but definitely was one major driver. Chicago Mercantile Exchange (CME), the world’s leading derivatives marketplace, launched the BTC Price Index - signalling intensified institutional awareness and presence in the market.

2017: The Year of ICOs

Many would call 2017 the highlight in the history of cryptocurrencies. A total of 435 ICOs had taken place, raising a whopping US$5.6 billion. The most famous ICO was Filecoin, which was also the first to be SEC-compliant with the legally binding SAFT (Simple Agreement for Future Tokens). Binance was founded by Changpeng Zhao in mid-2017 and received US$15 million in an ICO the same year, but China went against the current with its ICO ban in September.

DeFi sector (Decentralised Finance) started to emerge with the launch of the main crypto-collateralised stablecoin DAI. The total value locked (TVL) of DeFi hit US$1 million for the first time. The first NFT Game - CryptoKitties - went viral, pushing Ethereum’s transaction capacity to its limit.

Meanwhile, Japan officially recognised Bitcoin as a currency in 2017, providing the most progressive regulatory climate for the market. The first bank to sell Bitcoin directly to its customers is the Switzerland-based private bank Falcon. CME and CBOE (Chicago Board Options Exchange) announced their Bitcoin Futures, meaning big players in the traditional capital markets had joined the game.

2018: The First Bitcoin’s All-Time High

A few days into the new year, Bitcoin price set its new all-time high at US$19,700. Other cryptocurrencies greatly benefited from this achievement. The total market cap of all cryptocurrencies broke the record at US$820 billion, with VCs’ investments in the market hitting US$1 billion. Bitget was founded in late 2018, preparing for the employment of social trading in crypto.

Fidelity launched its crypto institutional platform, and the Swiss authorities added BTC to their tax payment options. Other regulatory bodies started to support the use of blockchain: the European Union committed US$300 million for blockchain project development and the South Korean government US$9 million.

2019-Present: Becoming An Integral Part of the Global Economy

Countless criticisms later, the crypto market proves it’s here to stay. Finally recognised as a new asset class worldwide, cryptocurrencies are becoming integral to the global financial system. Obviously a lot more has to be done, but the whole journey has been impactful and completely astounding!

2019: Scalin’ Time!

This is the year when the number of all Bitcoin transactions amounted to 400 million, and the number of daily Ethereum transactions exceeded 1 million. Facebook, one of the world’s largest companies in valuation, introduced their digital currency plan, whilst the giant J.P.Morgan launched the first bank-backed token in the U.S., JPM Coin.

One disturbing theme of the year was security. Seven crypto exchanges were hacked, including Binance and BitHumb. The value of compromised funds added up to nearly US$160 million, amplifying the trust issues raised by OneCoin’s ponzi scheme.

2020: Black Thursday but Unprecedented Expansion

The whole market was shaken up to the core with the crash on March 12, 2020, which is now often referred to as the “Black Thursday” event. Bitcoin, the flagship coin of cryptocurrencies, and Ethereum, the mother of all altcoins, both lost 50% of their value within a day, while the DeFi backbone DAI lost its peg. Nevertheless, DeFi flourished after Compound presented their yield farming scheme, together with Yearn Finance, SushiSwap and Pickle Finance. UniSwap, the true unicorn, brought the term airdrop into existence; DeFi TVL stood at US$10 billion - a nominal increase of 10,000 times compared to 2017’s figure.

Heightened activities in the DeFi sector, which is mainly built on the Ethereum blockchain, exacerbated the congestion and high gas fee problems of the network. Originally using the PoW consensus mechanism, Ethereum kick-started their transition into PoS (learn more about the consensus mechanism here) with Ethereum 2.0’s staking schedule (Phase 0).

More institutional players got into crypto, for example the legendary Paul Tudor Jones, Michael Saylor, Stan Druckermiller as well as big firms like CitiBank and Grayscale. SP Dow Jones announced the upcoming launch of their Crypto Indices as a result. Visa added USDC to their payment option, and LinkedIn revealed that blockchain was the most in-demand skill of the year.

2021: DeFi, NFT, Metaverse

The crypto scene was booming the whole 2021. Coinbase went public and was acknowledged as the 7th biggest new listing of all time in American history. Bitcoin value approached the US$70,000 level, bringing Bitcoin’s market cap to the peak at US$1 trillion. Ethereum’s most anticipated upgrade, EIP-1559, took place, solving the exorbitant gas fees only to a limited degree. Ethereum’s competitors gradually ate into its market share, with Avalanche and Solana making their way to the top 10 largest cryptocurrencies. DeFi enjoyed a YoY growth of 600%, hitting the US$200 billion mark at its best, but also demonstrated an US$7.7 billion vulnerability - the scammed/hacked/exploited value saw an increase of 81% from 2020.

Totally unexpected was the comeback of NFTs. The title “most famous NFT sale of all time” belongs to Beeple, whose NFT artwork was sold for US$69.3 million in Ethereum at Christie’s - the renowned fine-art auction house based in the U.S. That was only the beginning of the NFT obsession in 2021. Also falling into the category of NFT Artworks were CryptoPunks, CryptoKitties, Bored Ape Yacht Club. Adidas and Nike joined the gang with the production of their digital shoes. The last piece of the puzzle was Axie Infinity with its overnight success as the original NFT Game. As NFTs went mainstream, more people flocked to this market, motivating the expansion of NFTs into Metaverse, the graphically rich virtual space. NFT trading volume in 2021 was recorded at US$23 billion.

Governments had different plans when it came to adopting blockchain technology. El Salvador accepted the existing Bitcoin as legal tender, but China banned all crypto-related activities and conducted several Digital Yuan pilots. The Securities and Exchange Commission (SEC) continued to reject crypto ETFs; the only one got through was a futures-based Bitcoin ETF (BITO). North American ETFs, however, got the greenlight from Canadian regulators, where the first Bitcoin ETF (BTTC) made its debut on the Toronto Stock Exchange.

2022: Proving Resilience

The whole market had a great start this year, but everything’s gotten kinda derailed since May. Terra’s used-to-be-US$18-billion algorithmic stablecoin collapse; Tether creating mayhem with its depeg; Bitcoin value now barely above the peak of its last bull cycle. Fear and Panic have been sweeping across every corner of the market yet cannot stop BUIDLers from doing their job. Anyone who has weathered the volatility of the last decade is soundly capitalising on the drop, acknowledging the situation but trying to make the most out of it. There are another six months to contemplate, keep calm and see how the future unfolds. As the saying goes, “So, Bitcoin is dead? You must be new here”.