When you want to understand the opportunities and potential of Blockchain technology, you can only start with the Bitcoin protocol. The link between these two worlds is one of the strongest. And it couldn’t be any other way. Bitcoin is the first cryptocurrency created and commercialized that uses Blockchain technology to function. It is to this digital currency that Blockchain and Distributed Ledger technologies owe their fortune. The fictional story of Bitcoin is, therefore, also the story and history of the Blockchain. In this article, we will try to retrace it, in a journey that is anything but without twists and turns.
Blockchain and Bitcoin: the history of the first cryptocurrency in six stages
Before recounting the evolution of Bitcoin, however, a necessary premise: what exactly are Bitcoins?
1. Bitcoin: from idea to reality
Bitcoin was born at the end of 2008, when Satoshi Nakamoto – a person or a group of people whose identity is still unknown – published a white paper explaining his idea of a peer-to-peer cryptographic virtual currency without intermediaries, governed by algorithms. The proposed idea is a real declaration of war on the banking world, which at that time had been overwhelmed by a deep crisis. In 2009 the Bitcoin network starts to work; the community begins to grow and the bitcoin is used for the first time to purchase a good in the physical world: a pizza. In 2012 Bitcoin reaches a capitalization of $1 billion.2. Early relations with press and regulators
However, the first problems arise. At first (2010-11) Bitcoin, because of its use of pseudonyms and the absence of a supervisory authority, is associated with the illegal market, from drugs to terrorism, and for this reason is relegated to a niche phenomenon of little interest to the business world.Regulators in different nations are starting to wonder at this point how Bitcoin should be considered, some recognizing it as a currency, some as a financial instrument, and still others prohibiting it or advising banks against its use.
3. From Bitcoin to Blockchain
Starting in 2014, there is a phase in which interest begins to shift towards the technology behind Bitcoin: the Blockchain. Platforms that exploit some of the founding principles of Bitcoin begin to emerge: Ethereum, a platform oriented towards the creation of smart contracts; Ripple, a platform created in 2012 to facilitate interbank payments in different currencies, which gathers adherence from the first banks.In 2015, R3, a consortium composed of the world’s leading banks, was also born to develop the Corda platform. Also in 2015, the Linux foundation starts working on the Hyperledger project for the collaborative development of a platform that can also be used by companies. Therefore, we arrive at a crossroads: there are those who believe only in cryptocurrencies and those who believe that the underlying technology can be applied to other areas as well.
4. Blockchain becomes a fad
In 2016, the Blockchain fad takes hold. The press starts talking about it and more and more often it is presented in clear separation from Bitcoin (at the end of 2015 The Economist dedicates the cover to it and lists it among the technologies that will revolutionize the digital in the coming years). As a consequence of this media hype, companies’ awareness of Blockchain begins to increase and numerous experiments start.5. Blockchain and cryptocurrencies between fluctuations and perplexities
At the end of 2017 we enter the so-called disillusionment phase of Gartner’s hype cycle. The first perplexities arise about the revolutionary potential of this technology that struggles to materialize the promises made. Cryptocurrencies continue to fluctuate in their value, becoming more and more an instrument of financial speculation. The validation process of the Bitcoin network (so called mining process) presents some limits as the network grows: slowness in carrying out a transaction, high energy consumption for validation and risk of centralization of computers dedicated to this activity).6. The “crypto-winter”
After the strong media attention received in 2017, driven by the growth of their price, 2018 is characterized by an unstoppable collapse in terms of capitalization. The Blockchain community coined a new term to define this moment: “crypto winter”. However, winter has not arrived for the technology behind cryptocurrencies. the Blockchain continues to attract great interest from companies. The technology is evolving, thanks also to the efforts of the developer communities that revolve around the public Blockchain. The future, meanwhile, remains to be written.