Halving, Cycles, and Reincarnation: A History of Bitcoin Development

One day in the cryptocurrency world is like one year in the real world. Bitcoin has completed its fourth halving in history, and in a sense, one cycle is a hundred years.

Bitcoin has evolved over four years, and each stage has refreshed people's cognition. From the initial payment currency to value storage and digital gold, or the subversion and impact on sovereign currencies and mainstream financial systems, it has always gone to the moon amid repeated doubts and achieved a mythical increase.

Just like the advent of science in medieval Europe, theology was shrouded in ignorance. But it could not stop the truth. Adam Back, Nick Szabo, Satoshi Nakamoto, Hal Finney, Vitalik... batches of evangelists followed one after another, the pioneers benefited, and the believers lived forever.

Bitcoin is a virtual currency and a digital currency, but it is also the Noah's Ark when the financial tsunami hits. For this giant ship, we might as well look at how it was built bit by bit from the beginning.

1. What is Bitcoin halving? Why does it happen?

1. Halving

Bitcoin halving, also known as "Halving", refers to a pre-coded event set in the Bitcoin protocol that occurs every 210,000 blocks (approximately once every four years). Block halving refers to the process of reducing the amount of digital currency generated per unit time, mainly achieved by reducing block rewards.

The supply of Bitcoin is limited to 21 million units, and once the total is reached, the generation of new BTC will stop. Bitcoin halving ensures that the number of Bitcoins that can be mined per block will decrease over time. By 2140, all Bitcoins will have been mined, and the total amount is expected to be just under 21 million.

The process is designed to control the issuance of new Bitcoins and maintain their scarcity, thus ensuring that the Bitcoin supply is limited. Essentially, the halving is the reduction of the reward given to miners in half.

On April 20, Bitcoin halved at block height 840,000. After the halving, the block reward will drop from 6.25 bitcoins to 3.125 bitcoins.

Public data shows that miners currently bring about 900 bitcoins to the market every day. After the halving, this number will drop to around 450 BTC.

The impact of halving is large, mainly because it usually causes market volatility and increases speculation in the cryptocurrency field; reshapes the mining industry, and miners' profit points decrease; stimulates technological innovation and community development within the blockchain ecosystem. However, halving events may also hedge against inflation and enhance the attractiveness of Bitcoin as a long-term investment asset.

2. Why halving?

Satoshi Nakamoto published the Bitcoin white paper on October 31, 2008, and the Bitcoin Genesis Block was created on January 3, 2009. The halving is to control the supply of Bitcoin in circulation. By reducing the block reward, the speed at which new Bitcoins enter the market will slow down, which helps prevent inflation and ensures that the value of Bitcoin remains stable.

By the halving on April 20, 2024, Bitcoin’s inflation rate is expected to drop from approximately 1.75% to just 0.85%.

The reason why Bitcoin was born was mainly due to the consideration that some countries would issue currency without limit. Satoshi Nakamoto hoped to have a currency that would not be controlled by anyone and value transfer could be completed between any two nodes, so he designed this peer-to-peer trading system.

The law of market supply and demand in economic theory shows that if the circulation of a certain commodity is not restricted, hyperinflation will easily occur and the price of the commodity will be greatly reduced. Conversely, when supply decreases and demand remains the same or increases, the value of the asset may rise.

This halving mechanism is also studied by institutions. The figure above shows the Bitcoin stock/flow ratio model, which studies the annual mining volume and total inventory to try to predict the future value of Bitcoin. Backtesting has proved that it can simulate past price curves very accurately.

According to the conclusion of the model, the scarcity of Bitcoin is the main driving force of its price. After clarifying the potential relationship between price and scarcity, holders will realize the value of Bitcoin as a value storage tool.

In terms of block time, the Bitcoin mining algorithm is programmed to find a new block every ten minutes. As more miners join the network and add more hashing power, the time required to find a block will decrease. In order to restore the 10-minute target, the mining difficulty is recalculated every two weeks or so. As the Bitcoin network has grown dramatically over the past decade, the average time to locate a block has remained around 10 minutes (about 9.5 minutes).

In the Bitcoin network, a block is produced every 10 minutes, and a certain amount of Bitcoin will be mined continuously. Setting the Bitcoin reward to halve every 210,000 blocks can effectively reduce the inflation rate of Bitcoin and prevent the occurrence of hyperinflation.

“From this perspective, Bitcoin is more like a precious metal, where the value is not maintained by adjusting the supply, but rather by setting a pre-set supply cap, which allows the value to change accordingly,” Satoshi Nakamoto wrote in 2009. “As the number of users grows, the value of each coin will also increase. This can form a positive feedback loop; as the number of users increases, the value will gradually increase, thereby attracting more users to profit from the upward trend of the coin price.”

2. Bitcoin halving and bull market cycle

Market participants often view Bitcoin halving as a precursor to a bull market. This is because the price of BTC has hit new highs without exception after the previous three halvings. Many investors also have the same expectations for the halving on April 20, 2024.

Basically, every time miners add a total of 210,000 blocks to the BTC blockchain, BTC will halve. And every time BTC halving in the past, BTC prices will rise sharply and last for a long time.

Halving schedule:

First Halving (2012): The first Bitcoin halving occurred on November 28, 2012, when the mining reward was reduced from 50 bitcoins per block to 25 bitcoins.

Second Halving (2016): The second halving on July 9, 2016 further reduced the block reward to 12.5 bitcoins.

Third Halving (2020): In the third halving, which took place on May 11, 2020, the reward was reduced to 6.25 bitcoins per block.

Fourth Halving (2024): In the fourth halving, which will take place on April 20, 2024, the reward is reduced to 3.125 bitcoins per block. Future halvings will continue until the maximum supply of 21 million bitcoins is reached, which is expected to occur around 2140.

As of today, Bitcoin has undergone four halvings, which is called a halving cycle in the industry. In the past, BT prices rose sharply almost every time BTC halved.

As can be seen from the above figure, since the birth of Bitcoin, its cycle has been very stable.

The first halving cycle: 2012.11.28-2016.07.10. This halving cycle led to two bull markets in April and November 2013. In the first bull market, the price of Bitcoin rose from $12 to $288, a price increase of 2,300%; in the second bull market, the price of Bitcoin rose from $66 to $1,242, a price increase of 1,782%.

The second halving cycle: July 10, 2016 - May 12, 2020. This halving cycle led to a bull market in December 2017, during which the price of Bitcoin rose from $648 to $19,800, a price increase of 4,158%.

The third halving cycle: 2020.05.11-2024.04.20. This halving cycle caused two bull markets in April and November 2021. In the first bull market, the price of Bitcoin rose from $8,572 to $69,000, a price increase of 741%. In the second bull market, the price of Bitcoin rose from $15,476 to $737,770, a price increase of 376%. Given the current price of Bitcoin, the crypto market is still in a bull market.

Historically, Bitcoin's price has often experienced significant fluctuations around halving events. In the months leading up to the halving, market expectations and speculation about the potential price increases that may result from future supply reductions often drive prices higher. After the halving event, Bitcoin typically experiences a significant bull run.

As can be seen from the above figure, before each BTC halving, the market will have a bear market trough period of about 1.3 years. After that, the market will take about 1.3 years to reach the peak. In view of this, the entire ups and downs of the market take about 2.6 years. In addition, based on the BTC halving events that have occurred in the past, the BTC price bottomed out about 477 days before the BTC halving occurred. In addition, it takes an average of 480 days from the halving date to the peak of the next bull market cycle.

For example, after the 2012 halving, the BTC price increased from $12.25 to $127 in 150 days. Similarly, after the 2016 halving, the BTC price increased from $650.63 to $758.81 in 150 days. Finally, after the 2020 halving, the BTC price increased significantly from $8821.42 to $10,943.00 in 150 days.

At the same time, looking back at previous halving events, Bitcoin will also encounter a retracement period. In 2016, the market experienced a sharp sell-off from around $760 to $540 before and after the halving, with a retracement of about 30%. The 2019 event saw a larger retracement of about 38%.

This year is no exception. As of writing, the price of Bitcoin has retreated by about 14%.

However, according to the Bitcoin stock-to-flow ratio model mentioned above, after the BTC halving in 2024, the BTC price may rise to more than $100,000. Crypto research institutions PlanB and Glassnode both predict that the BTC price will rise and exceed $100,000 in 2024. Pantera Capital more specifically predicts that after the entire bull market cycle is over, the BTC price will reach about $149,000 in 2025.

Historically, the Bitcoin cycle usually starts 12 to 18 months after the peak of the last bull market, and a new all-time high appears a few months after the halving. However, unlike in the past, this halving event is accompanied by the development of the US Bitcoin spot ETF, so the impact of the halving in this cycle may be weakened.

Investors should also note that the rise in Bitcoin prices after the halving is also associated with major macroeconomic events. For example, in 2012, the European debt crisis highlighted Bitcoin’s potential as an alternative store of value during economic turmoil, causing its price to rise from $12 to $1,100 in November 2013.

During the 2016 ICO boom, more than $5.6 billion was pumped into altcoins, which indirectly benefited Bitcoin, boosting its price from $650 to $20,000 in December 2017.

Of particular note, during the COVID-19 pandemic in 2020, massive stimulus measures heightened inflation concerns, likely pushing investors toward Bitcoin as a safe haven, causing its price to rise from $8,600 to $69,000 by November 2021.

The above information shows that although halving helps to strengthen the scarcity narrative of Bitcoin, macroeconomic factors can also have a significant impact on Bitcoin prices. The risk of the crypto market is high, and investors should be more cautious.

3. BTC Epic

In order to more fully grasp the crypto cycle triggered by each round of Bitcoin halving, it is necessary to review the epic development of Bitcoin.

Like countless great things, Bitcoin did not come out of thin air; it also stands on the shoulders of its predecessors.

It requires both technical reserves and ideological reserves.

Technical reserves before the birth of Bitcoin

The birth of Bitcoin requires technological breakthroughs in cryptography and digital currency.

1976 Asymmetric encryption is born: On November 1, 1976, cryptographers Whitfeld Diffie and Martin E. Hellman published the paper "New Directions in Cryptography", a breakthrough paper that moved cryptography from symmetric encryption (the same key is used for encryption and decryption) to asymmetric encryption. This innovation paved the way for secure digital signatures, implementing public and private key pairs in encrypted transactions, and became an integral part of Bitcoin's functionality.

1977 RSA Algorithm: One of the earliest viable public key cryptosystems, RSA comes from the initials of its founders: Ron Rivest, Adi Shamir, and Leonard Adleman.

1989 DigiCash: David Chaum founded DigiCash, one of the first attempts at a completely anonymous, secure digital payment system. DigiCash was based on blind signature technology, built on public and private key pairs. Despite its innovative approach, its centralized model led to its failure. However, DigiCash was an important forerunner to the development of cryptocurrencies such as Bitcoin.

With the development of the Internet, the late 1990s and early 2000s ushered in a period of digital currency innovation.

1996 e-gold (digital currency): e-gold was a platform created by Douglas Jackson and Barry Downey that allowed users to transfer ownership of gold electronically. Its centralized structure became the focus of legal challenges, particularly in relation to money laundering. This, combined with security issues, led to its eventual dissolution.

1997 Hashcash (Proof of Work): Adam Back invented HashCash in 1997 and proposed the Proof of Work system. Hashcash is a proof of work mechanism used to prevent spam and denial of service attacks. The proof of work principle was later introduced by Satoshi Nakamoto into the Bitcoin consensus mechanism.

1998 B-money (distributed ledger): Dai Wei, a Chinese-American scientist, proposed the B-Money electronic currency protocol. B-Money was envisioned as a decentralized, anonymous electronic cash system, one of the methods of which is that all participants keep copies of all transactions to ensure collective and transparent verification. This protocol is the prototype of a distributed ledger, and Satoshi Nakamoto cited B-money when he created Bitcoin.

1998 Bit Gold: Nick Szabo invented Bit Gold, inspired by the real-world gold mining process, and introduced a proof-of-work mechanism. Bit Gold requires participants to show proof of work to create a new unit of currency called a "bit". Once the work is verified, the new "bit" will be added to a chain, linking it to the previous bit to form a public, tamper-proof record. And proposed the Byzantine algorithm to prevent double spending. This system is the first prototype close to the Bitcoin architecture. Although Nick Szabo elaborated on the principles of Bit Gold, a fully operational model has never been fully developed or launched.

RPOW (Reusable Proof of Work) in 2004: Developed by Hal Finney inspired by Hashcash, Hal Finney believed that RPOW could serve as the basis for some kind of payment system, which would facilitate the use of POW tokens as a form of P2P electronic cash by allowing tokens to be transferred and exchanged between people. This is why Hal Finney was interested in Bitcoin from the beginning when Satoshi Nakamoto shared the Bitcoin white paper on the cypherpunk mailing list. Hal Finney was the first person to run a Bitcoin node, the first miner, and the recipient of the first Bitcoin transaction.

Satoshi Nakamoto’s Thoughts and the Beginning of Bitcoin

Monetary issues have always been thought-provoking. If money is the crown of social science, then the business cycle is the jewel in the crown of social science.

In the classical period, countless sociologists such as Cantillon, John Law, and Hume had thought about the origin of inflation and the pursuit of sound money.

In modern times, in the process of seeking to explain the capitalist economic crisis and business cycle, a group of economists, the Austrian School, was born. The Austrian School believes that inflation is mainly a monetary phenomenon, which is caused by the increase in the issuance of credit currency, which in turn distorts market price signals and causes companies in the market to make generally wrong decisions, until a market liquidation, i.e. an economic crisis, occurs.

After entering the 20th century, with the credit era, especially the central bank's gradual expansion, the inflation caused by legal tender eventually returned like a tiger returning to the mountain. Humanity has witnessed countless cases of hyperinflation, such as the German mark and the Kuomintang's gold yuan coupons.

There was also a notorious case in the United States, which began with the Great Depression of 1929. Because the central bank's fiat currency was afraid of competition from sound money, on April 5, 1933, during the Great Depression, US President Roosevelt issued Executive Order No. 6102, prohibiting the American people from owning gold. Executive Order No. 6102 was not repealed until 1975.

Satoshi Nakamoto must be quite familiar with this dark history of the United States. Perhaps this is why Satoshi Nakamoto entered April 5, 1975 as his date of birth when registering the P2P Foundation pseudonym.

In 1974, Austrian economist Hayek won the Nobel Prize in Economics, and in 1976, Hayek published "The Denationalization of Money". In addition, in the 1980s and 1990s, Friedman, an American monetary economist, criticized inflation, and libertarians and the American Liberal Party promoted the revival of the Austrian School in the United States.

Looking back, if Satoshi Nakamoto grew up in the 1980s and 1990s, he would have been deeply influenced by the Austrian School of Economics and accepted its monetary proposition of "seperation of money and state."

After the experiments of Adam Back, Dai Wei, Nick Szabo, Hal Finney and others in the previous section, Satoshi Nakamoto began to stand on their shoulders, combining the strengths of each party and making original contributions.

In early 2007, Satoshi Nakamoto began writing the code for Bitcoin. “I believe I have worked out all of these little details while writing the code over the past year and a half,” Nakamoto wrote in a post on the cryptography mailing list on November 17, 2008.

Then came the financial crisis that shocked the world in 2008. The financial crisis made people all over the world think about business cycles and inflation again.

And in this crisis, Satoshi Nakamoto and humanity are prepared.

Bitcoin development history

August 18, 2008, Bitcoin.org domain registration : The domain "bitcoin.org" was registered by an unidentified person using a privacy protection service to hide his identity. The identity of the person remains unknown, but many believe him to be Satoshi Nakamoto, the pseudonymous creator of Bitcoin. The website is a central hub for information about Bitcoin, including beginner's guides, technical documentation, and news and updates about the Bitcoin ecosystem. The domain is currently maintained by the open source community.

On October 31, 2008, Satoshi Nakamoto published the Bitcoin white paper "Peer-to-Peer Electronic Cash System" on the cryptography mailing list : The most important contribution of the Bitcoin white paper is that it solves the double-spending problem through a decentralized mechanism called blockchain. Blockchain is a distributed public ledger that records all transactions in a secure and transparent manner. The Bitcoin network will rely on the PoW network to verify transactions and maintain the integrity of the blockchain.

On January 3, 2009, Satoshi Nakamoto mined the Bitcoin genesis block on a server in Helsinki : the genesis block contained a message in the coinbase parameter that read: "The Times January 3, 2009 Chancellor of the Exchequer on the verge of a second bailout for banks." This was the headline of the Times that day, reporting on the British government's plan to rescue bankrupt banks.

January 12, 2009, the first BTC transfer : 9 days after the launch of the Bitcoin network, Satoshi Nakamoto sent 10 bitcoins to Hal Finney's Bitcoin address.

In February 2009, the first Bitcoin wallet, Bitcoin-Qt , was released: its user-friendly interface allowed early Bitcoin adopters to create and manage digital wallets to send and receive Bitcoins. Starting with version 0.9.0, Bitcoin-Qt was later known as the Bitcoin Core wallet.

March 17, 2010, first recorded Bitcoin price ever : Bitcoin's first recorded price of $0.003 is recorded on the now-defunct bitcoinmarket.com.

On May 2, 2020, the first Bitcoin transaction was made : Laszlo Hanyecz bought two Papa John’s pizzas for 10,000 Bitcoins, which were worth only a few dollars.

December 12, 2010, Satoshi's last post : Satoshi published his last post on bitcointalk.org, adding some DoS restrictions and removing the previously introduced alarm system safety mode.

July 18, 2010, programmer Jed McCaleb founded Mt.Gox : Mt. Gox was originally a project initiated by programmer Jed McCaleb, who purchased the domain name mtgox.com in 2007 with the intention of creating a platform for trading virtual cards for the game Magic: The Gathering. By 2010, McCaleb had repurposed the domain name as a Bitcoin exchange, and less than a year after the platform was founded, he sold the platform to French-born developer Mark Karpelès, and in 2013, at its peak, Mt. Gox handled approximately 70% of the world's Bitcoin trading volume.

On November 1, 2010, the Bitcoin logo was born : an unknown artist created it using the name "Bitboy", and to this day, the identity of "Bitboy" remains unknown.

In February 2011, the Silk Road was launched

June 2011, the first Bitcoin bubble : Although Bitcoin was created in 2008, its price didn’t really start to soar until 2011. Bitcoin was trading at less than $1 per coin in early 2011, but by June 2011, the price of each Bitcoin had risen to over $31. However, due to the massive hack of the Mt. Gox exchange, which resulted in the theft of 25,000 Bitcoins, the price of Bitcoin fell to $2 by November 2011.

In June 2011, the first Bitcoin hack occurred : Allinvain posted on the BitcoinTalk forum that someone had hacked into his computer and stole 25,000 Bitcoins directly from his hard drive. In June 2011, each Bitcoin was around $20, which meant that the Bitcoin held by Allinvain was worth about $500,000.

June 20, 2011, Mt. Gox was hacked for the first time : In June 2011, Mt. Gox experienced its first major crisis when hackers targeted the exchange and exploited a vulnerability that caused the price of Bitcoin on the platform to plummet from $17 to just cents in a matter of minutes. A leaked Mt. Gox document showed that hackers had been stealing Bitcoin from the exchange for years, resulting in the disappearance of more than 850,000 Bitcoins.

On April 18, 2011, the first altcoin, Namecoin, was born : Namecoin is a cryptocurrency and decentralized domain name system (DNS). As a fork of the Bitcoin protocol, it has some similarities with Bitcoin (including the use of a proof-of-work mechanism). It aims to provide a decentralized, censorship-resistant system for registering and managing domain names, as well as storing and transmitting arbitrary data.

On November 18, 2012, Bitcoin was halved for the first time : The first Bitcoin halving event occurred at block height 210,000, and the block reward was reduced from 50 bitcoins to 25 bitcoins.

On May 2, 2013, the first Bitcoin ATM was installed in Vancouver, Canada

On March 18, 2013, the market value of Bitcoin exceeded $1 billion for the first time.

On July 3, 2013, the first ICO took place: the Mastercoin Initial Coin Offering (ICO), where participants in the ICO sent Bitcoin to a specified address and in return received newly created Mastercoin tokens, MSC. This method demonstrated the potential of token sales as a means of financing blockchain development, setting a precedent for countless ICOs that followed. Mastercoin was later renamed Omni.

On December 18, 2013, HODL was born: a user posted a thread on the bitcointalk.org forum titled “I’m HODLING.” This misspelling later became a popular term.

On February 25, 2014, Mt. Gox filed for bankruptcy protection : due to a hacker attack, it lost 850,000 bitcoins, worth about $450 million at the time.

Throughout 2015, the issue of Bitcoin expansion and block size was discussed : there were two expansion conferences, Scaling Bitcoin Montreal in September and Scaling Bitcoin Hongkong in December.

On January 14, 2016, the Lightning Network white paper was released : Joseph Poon and Thaddeus Dryja released the Lightning Network white paper. The Lightning Network uses state channel off-chain payments to speed up transaction times, thereby providing an expansion solution for Bitcoin.

On July 9, 2016, Bitcoin's second halving occurred at block height 420,000, and the block reward dropped from 25 bitcoins to 12.5 BTC.

BCH fork on August 1, 2017 : Bitcoin's block size limit is 1MB (4MB due to the SegWit upgrade), while BCH's block size limit is 32MB.

On August 23, 2017, Segregated Witness SegWit was activated at Bitcoin mainnet height 481,824 : SegWit aims to solve several long-standing problems of Bitcoin, such as transaction malleability and scalability. In terms of scalability: By separating witness data from transactions, the block size limit is effectively increased to 4MB, allowing more transactions to be included in each block. SegWit also improves the security of Bitcoin transactions by resolving certain vulnerabilities such as transaction malleability. The activation of SegWit marks the end of the Bitcoin block size dispute.

In November 2017, the Lightning Network was launched on the Bitcoin mainnet and completed its first transaction . Please refer to Golden Finance’s previous article “Interpretation of the Lightning Network Principle”.

In November 2017, CME officially launched Bitcoin futures trading, and Bitcoin reached a high of $19,000.

In January 2018, the legendary Lazlo Hanyecz successfully purchased a pizza again via the Lightning Network.

January 2019, Lightning Torch Event

On March 12, 2020, affected by the COVID-19 pandemic and U.S. stocks, Bitcoin plummeted, falling to below $3,800.

On May 25, 2020, Bitcoin was halved for the third time : The third Bitcoin halving event occurred at block height 630,000, and the block reward was reduced from 12.5 bitcoins to 6.25 bitcoins.

In January 2021, Stacks was launched : Stacks was originally named Blockstack and was co-founded by Muneeb Ali and Ryan Shea. The layer has its own programming language Clarity and a consensus mechanism called Proof of Transfer (PoX), which together allow the execution of smart contracts on the Bitcoin blockchain.

On February 8, 2021, Tesla announced that it would accept Bitcoin payments

On February 19, 2021, the market value of Bitcoin exceeded 1 trillion US dollars

Bitcoin price reaches $65,000 in April 2021

In June 2021, China banned Bitcoin mining , Bitcoin fell below $30,000, and Bitcoin computing power migrated to the United States

Bitcoin becomes legal tender in El Salvador on September 7, 2021

On November 14, 2021, the Taproot upgrade was successfully activated : This is the biggest progress of Bitcoin since the activation of SegWit in 2017. The Taproot upgrade introduced Shnorr signatures and smart contract function improvements. See Golden Finance's previous article "What is Taproot".

In November 2021, the price of Bitcoin reached the previous ATH of $69,000

In December 2022, ICP mainnet will integrate Bitcoin

2023 is a big year for the development of Bitcoin ecosystem : Ordinals, Inscriptions, BRC20, Atomical, ARC20, Bitstamp, SRC20, Rune, Taproot Assets, RGB and other new concepts are emerging in an endless stream. The development in 2023 is the sum of the development in the previous few years. Please refer to Golden Finance's previous article "Bitcoin Ecosystem 2023 Inventory".

In January 2024, the US SEC approved 11 Bitcoin spot ETFs for listing.

In March 2024, stimulated by the Bitcoin spot ETF , the price of Bitcoin rose to US$73,000 , breaking the previous high for the first time before the halving.

Since 2024, the rise of Bitcoin layer 2. According to Golden Finance statistics, there are currently more than 50 Bitcoin L2s.

4. Every generation has its own talented people

With the development and evolution of Bitcoin and the cycle of cryptocurrencies, the leaders of the crypto industry are also changing rapidly. It can be said that every generation has its own talented people, and each of them leads the trend for one or two years.

Here are some of the ever-changing leaders in the history of crypto development.

Satoshi Nakamoto: The creator of the Bitcoin protocol and its related software Bitcoin-Qt, whose real name is unknown and who claims to be Japanese-American, released the first Bitcoin software and officially launched the Bitcoin financial system in 2009. In 2010, he gradually faded out and handed over the project to other members of the Bitcoin community.

Vitalik Buterin : Known as V God, the founder of Ethereum. When he first came into contact with cryptocurrency, he was also a supporter of Bitcoin. He founded Bitcoin Magazine in 2011. The most comprehensive Bitcoin Python library is pybitcointools written by him. Vitalik is a supporter of Bitcoin's large blocks. He originally wanted to make Bitcoin something scalable. For example, he and his team made Colored Coins, which supports users to issue coins on the BTC ecosystem. Anyone can build assets based on the Bitcoin protocol and trade. Ethereum inherits the idea of ​​large blocks. Unlike Bitcoin's digital gold, it is a "computer".

Craig Steven Wright : Originally named Craig Steven Wright, he is the founder of BSV, a fork of BCH. He is an Australian who claims to be Satoshi Nakamoto. He became famous in 2016 when he claimed to be Satoshi Nakamoto, and even got confirmation from Gavin Anderson, a member of the Bitcoin core team. But later, because Craig Steven Wright could not provide enough evidence, he gave up in the end, but he got the title of "Australian Satoshi Nakamoto".

During the Bitcoin fork turmoil, Craig Wright was also very active, and even threatened to use money to destroy Bitmain. Finally, BCH was forked and BSV was born.

Chang Jian : His real name is Liu Zhipeng. He is the founder of China's largest blockchain forum and media "Babbitt", and is also a science fiction writer. He plays a pivotal role in the Chinese blockchain world, and has long been committed to the promotion and theoretical research of blockchain technology. He is the originator of the blockchain "impossible triangle" theory, and published the first Bitcoin monograph in China, "Bitcoin: A Real and Illusory Financial World".

FriedCat : His real name is Jiang Xinyu, another name that cannot be ignored in the history of Bitcoin development. He is the first person in the Chinese Bitcoin circle to successfully launch an ICO project, and one of the earliest technical geniuses in China to manufacture Asic mining machines. As early as 2013, he was worth over 100 million yuan and controlled 20% of the computing power of the entire network. However, from the end of 2014 to the beginning of 2015, he suddenly lost contact and never appeared again.

Wu Jihan : Mining tyrant, founder of Bitmain, who once controlled more than 50% of the computing power of Bitcoin mining. In 2017, in the battle between large and small blocks of Bitcoin, he supported large blocks, and then forked Bitcoin, and BCH was born. He even wanted to usurp power over BTC, but he tried his best but failed in the end.

Li Xiaolai : Formerly a teacher at New Oriental, he is known as China's richest Bitcoiner. He first bought Bitcoin in 2010 and decisively increased his holdings during the bear market in 2014. So far, he has accumulated 100,000 Bitcoins. In 2017, Li Xiaolai cashed out all his Bitcoins, earning about 13.5 billion yuan, and publicly stated that Bitcoin is a scam.

Casey Rodarmor : The developer of the Ordinals protocol, which made NFTs possible on Bitcoin. This is another attempt to issue NFTs on Bitcoin after the appearance of colored coins in 2012 and the derivative Counterparty in 2014. He then proposed the Rune protocol, which will be launched on the day of Bitcoin's fourth halving.

Larry Fink, CEO of BlackRock : As early as 2017, Fink said that he was a "faithful believer" in cryptocurrencies. In 2023, BlackRock submitted an application for a Bitcoin ETF, and Fink said that cryptocurrencies are expected to surpass global currencies. This move by the global financial giant is undoubtedly a shot in the arm for the mainstreaming of Bitcoin. Later, BlackRock did become one of the first people in the United States to try out a Bitcoin spot ETF.

Nayib Bukele, President of El Salvador : He is the first president in the world to publicly support Bitcoin and made Bitcoin the legal tender of his country. Since then, the country has been buying one Bitcoin every day. This is undoubtedly an innovative attempt to the current financial system.

MicroStrategy CEO Michael Saylor : Michael Saylor is the company that holds the most Bitcoin, and Michael Saylor is also one of the most influential figures in the field of cryptocurrency. It is said that he holds more than 120,000 Bitcoins.

Changpeng Zhao : Founder of Binance. He used the money from selling his house to buy Bitcoin at a price of $600 in 2014. In 2017, he founded Binance, the exchange with the largest trading volume. After closing down the exchange in China, he decisively chose the direction of global development. Facts have proved that decisively going overseas has indeed made Binance successful. However, it has also been involved in a lawsuit with the US government.

The reason why the industry has always praised Zhao Changpeng is that he is not just running an exchange. Binance has invested in and incubated many projects and has been working hard to expand the industry's pie.

In the history of Bitcoin development, countless people have come and gone, and some have persisted, from actively preaching in the early days to participating in the construction of the industry. The history of crypto development will remember those active practitioners, and their belief in Bitcoin has also given them a sufficiently rich return on wealth.

5. From payment currency to digital gold, anarchism is finally incorporated

Bitcoin has been around for almost 16 years since 2008. Bitcoin was born after the 2008 financial crisis, when Satoshi Nakamoto faced inflation caused by excessive money supply and wanted to create a financial system independent of the country. Bitcoin was initially created as an electronic cash, and Satoshi Nakamoto originally hoped that it could be used by people like currency.

However, in the first two years, Bitcoin was worth almost nothing. One Bitcoin cost less than half a cent, and no merchants were willing to accept Bitcoin as payment. It wasn't until May 2010 that Bitcoin was being used to buy food. An early miner, Laszlo Hanyec, exchanged 10,000 Bitcoins for two pizzas.

Since then, Bitcoin has been widely used as a payment method on the dark web. In 2011, the dark web Silk Road was established, and Bitcoin became the hard currency on it. In addition to its anonymity, it is also largely because its difficult-to-trace characteristics highly meet the needs of the dark web.

Early data also showed that in the first three years of Bitcoin’s birth, 30% of transactions were directed to the dark web; by 2014, the average daily Bitcoin transaction volume in the six major dark webs reached $650,000. Money laundering, drug trafficking, and trafficking of women and children, Bitcoin is associated with these words. According to statistics, as of January 2018, about 25% of Bitcoin users and nearly half of Bitcoin transactions were related to illegal activities.

Some dark webs have disappeared, and the most commonly used virtual currency used in money laundering has also changed from Bitcoin to Tether because its price is constant. With the surge in Bitcoin's price and due to its large price fluctuations, Bitcoin's function as a currency exchange is gradually weakening, and it is becoming a tool for value storage. After the battle between large and small blocks in 2017, Bitcoin has strengthened its positioning of digital gold, and in practice, Bitcoin is also constantly implementing this positioning.

With the collapse of the monetary systems of some sovereign countries, Bitcoin has become an option for people in some countries to surpass fiat currencies.

In September 2021, Bitcoin became the legal currency in circulation in El Salvador. El Salvador also became the country of Bitcoin.

The new Argentina president is promoting the benefits of Bitcoin and cryptocurrencies in multiple public occasions. The Argentine people, who have suffered from Argentina's inflation for a long time, are also actively buying Bitcoin. Argentina is one of the countries with the highest cryptocurrency adoption rates in the world. Inflation data shows that Argentina's inflation rate rose from 254.20% in January 2024 to 276.20% in February.

As can be seen from the examples of the above countries, Bitcoin is indeed playing the role of anti-inflation that Satoshi originally envisioned. But some sovereign countries are indeed actively embracing Bitcoin, and the original intention of independent of the mainstream financial system can no longer be realized. Nowadays, some governments are actively supervising and embracing Bitcoin, and Bitcoin has become a part of the mainstream financial system. The most direct manifestation is that some countries have passed the Bitcoin spot ETF, especially the United States, which has a profound impact.

Looking at the development of Bitcoin over the years, we can see that Bitcoin has gradually changed from a payment method to a gold-like investment product, and countries' attitudes towards it have also gone from crackdowns to having to study supervision or actively embrace it.

Previously, Bitcoin was a toy for geeks. After nearly sixteen years of development, the narrative of Bitcoin has also changed from payment currency to digital gold, from a confrontation with the national financial system, and has finally been incorporated by the mainstream financial system.

Bitcoin itself is also changing, with disputes over large and large blocks, forks, and now new things such as inscriptions and runes on it are emerging one after another.

All forces have staged various disputes on Bitcoin for their own interests, but these have not really shaken Bitcoin, and Bitcoin is still great.