The world of cryptocurrency can feel a lot like the Wild West. Its origins are as shaky as its rise has been shady.
The buzz started with Bitcoin: A computerized algorithm generates a digital token of exchange that’s registered on a public database (i.e a blockchain). Supporters thought because it was decentralized—not under governmental control—it had the legs to totally transform global finance.
Of course there were drawbacks. Because it had little real-world use to anchor its value, prices swung drastically. The solution: a digital “coin” that would be registered on the blockchain but backed by actual U.S. dollars. Enter RealCoin. Below, we detail all the developments that have taken place over the years (and, boy, are there a lot of twists and turns).
For a deeper dive into cryptocurrency, read our feature: Tether Is a Trail of Shady Deals and Shattered Promises. Too Bad Cryptocurrency Now Depends on It.
Domain name bitcoin.org is first registered. Two months later, a paper detailing a decentralized “peer-to-peer cash electronic cash system” is published by Satoshi Nakamoto, likely a pseudonym.
The first Bitcoin transaction takes place when “Nakamoto” sends 10 bitcoins to a computer programmer. Early adoptees begin “mining” bitcoins—using their own computers to securely record transactions (aka blockchain technology), with bitcoins as payment.
Bitcoin is hacked for the first time, making promoters and detractors alike face the considerable vulnerability of cryptocurrency. The first actual Bitcoin sale occurs when a user swaps 10,000 coins for two pizzas. Today’s value: More than $100 million.
Tether, a “stablecoin” theoretically tied to the value of the U.S. dollar, is issued. Hackers attack major Bitcoin exchange Mt. Gox, swiping $450 million in bitcoins from owners—forever. Mt. Gox soon goes bankrupt.
Ethereum and Coinbase join the cryptocurrency ranks, while European Bitcoin exchange Bitstamp is closed for several days by a security hack.
The SEC warns that the new cryptocurrency investment tool of Initial Coin Offerings might be a Ponzi scheme in disguise.
Japan allows Bitcoin as a legal payment method. Norwegian online bank Sbanken allows Bitcoin in customer accounts.
Goldman Sachs announces it’s opening a Bitcoin trading desk while also stating it isn’t “sold” on cryptocurrency. Samsung manufactures computer chips specialized for mining cryptocurrencies, while environmentalists estimate that mining-dedicated server farms are sucking more energy than Argentina or Ireland.
Elon Musk begins tweeting his support of Dogecoin, which was founded in 2013 as a jokey extension of an internet meme featuring the Shiba Inu dog breed.
Bitcoin-heavy exchange Coinbase becomes a publicly listed company on the Nasdaq. The total market value of all cryptocurrency surpasses $2.5 trillion, then plummets $1 trillion in a week, sparking new fears of a “crypto bubble.”