Wednesday was the 10th anniversary of Bitcoin. On October 31, 2008, the elusive Satoshi Nakamoto published a whitepaper titled “Bitcoin: A Peer-to-Peer Electronic Cash System,” which described the inner workings of Bitcoin.
Link to whitepaper: https://bitcoin.org/bitcoin.pdf
Fast forward 18 months and one of the 1st Bitcoin financed consumer purchases was made. In May of 2010 a programmer name Laszlo Hanyecz posted to the Bitcoin Talk online forum that he would like to exchange some of his “mined” Bitcoins for pizza (you can use custom built computers to solve mathematical equations and, upon successful completion, receive Bitcoin in return). Two days later he exchanged 10,000 Bitcoins for two Papa John’s pizzas. A transaction worth about $30 at the time.
“It wasn’t like Bitcoins had any value back then, so the idea of trading them for a pizza was incredibly cool… No one knew it was going to get so big.” – Laszlo Hanyecz via December 2013 New York Times article.
For perspective, at Bitcoin’s December 2017 peak of ~$19,000 per coin that same transaction would be worth about $190 million or $60 million at today’s prices. Even Dave Berkus would have regretted that.
Almost 353 million Bitcoin transactions have been made since inception and nearly $2 billion worth of Bitcoin trades daily today. The distributed ledger technology that Bitcoin was founded upon, also known as block chain, supports the foundation of more than 2,000 different cryptocurrencies with a combined market cap exceeding $200 billion. Ancillary businesses like Coinbase.com, one of the largest Bitcoin trading platforms, will do more than $1 billion worth of business this year alone. A company like NVDIA that produces and retails consumer graphics cards for $300 – $750 apiece, has found these same graphics cards being resold on Amazon.com for $1,200 – $1,500 apiece (at one point in time). The crypto mining craze that peaked in 2017 caused computer component makers like NVIDIA to report record profits and stock appreciation (not a direct result necessarily, just saying). Governments, financial institutions, and other industries/user groups are exploring various ways in which people can manage anything from financial transactions to identity management via block chain-based technologies. Whether Bitcoin is just a craze supporting short-term profit makers or the official digital store of value, some would argue that we’re in the infancy of a technology revolution that is ripe for disrupting many facets of everyday life and business.
… Still probably best to keep those “block chain goggles” handy when navigating the evolving venture investment world… at least for the foreseeable future.
Link to New York Times article: https://bits.blogs.nytimes.com/2013/12/22/disruptions-betting-on-bitcoin/
Link to Bloomberg article discussing Coinbase: https://www.bloomberg.com/news/articles/2018-10-30/coinbase-to-bring-in-1-3-billion-in-2018-sales-documents-show