Papa John’s to 50 Cent: How Bitcoin dominated the decade

Back in July 2010, investorswere so busy throwing money at companies like Netflix, Amazon and Apple thatthey failed to pay any meaningful attention to a new digital currency calledBitcoin, which was paying just $0.08 per coin at the time.

Little did they know that, bythe end of 2019, the price of the world’s first cryptocurrency would haveincreased by 62,500 per cent, making Bitcoin the most-profitable investment ofthe decade.

It hasn’t always been smoothsailing. As well as sizeable increases, its price has also suffered significantdrops, not to mention various security issues, allegations of fraud and somedownright bizarre episodes.

With remarkable highs andsudden lows, Bitcoin’s journey marks one of the most captivating successstories of the 2010s.

2009-2010: The early years

First launched in early 2019,Bitcoin was shrouded in mystery from the very beginning. The cryptocurrency wasfounded by Satoshi Nakamoto, a pseudonymous individual (or collective) who haskept their identity secret since releasing Bitcoin’s original blueprint on acryptography mailing list on 31 October 2008.

Word of Bitcoin took a whileto spread, and its early years were far less turbulent (and valuable) thanthose that followed. While early adopters would trade privately, it wasn’tuntil March 2010 that BitcoinMarket, the first formal bitcoin exchange, wentlive, allowing users to trade cryptocurrency or buy and sell it for cash. Then,in May of the same year, the first real-world bitcoin transaction was made,when two Papa John’s pizzas were bought for 10,000 bitcoin. Worth roughly $40then – with the pizzas themselves only costing $25 – those bitcoin have sincehit a peak value of $90.5m.

However, on 15 August 2010,Bitcoin’s first major hack (later dubbed the Value Overflow Incident) nearlyrendered the entire currency useless. An anonymous hacker manipulated theblockchain to create nearly 184.5bn bitcoin to split between three separateaccounts with a few keystrokes. But the hacker’s desire to loot as much aspossible meant the inflation bug was conspicuous enough to be spotted and fixedwithin a few hours.

2011-2015: Bitcoin goesmainstream, but competitors emerge

February 2011 marked the firsttime Bitcoin reached parity with the US Dollar, a milestone which fuelled asurge in interest from investors looking to get a piece of the action. 

With the increased attentionand value, more businesses began accepting Bitcoin as an official payment method.The University of Nicosia became the first in the world to accept bitcoin forthe payment of tuition, while Richard Branson’s Virgin Galactic began acceptingthe cryptocurrency to pay for future space travel. A female flight attendantfrom Hawaii was the first to secure her place on board the spacecraft via thismethod.

Perhaps the most infamous ofthese is OneCoin, a Ponzi cryptocoin and blockchain scheme launched by Dr RujaIgnatova. The Bulgarian, who later became known as “the missing Cryptoqueen” ina popular BBC Sounds podcast, has been on the run from the FBI since 2017 afterbeing charged for wire fraud, securities fraud, and money laundering.

The success of Bitcoin pavedthe way for new competitors to launch their own legitimate cryptocurrencies,including Ripple (2013) and Ethereum (2015). Meanwhile, more unorthodoxcryptocurrencies launched, such as Dogecoin, which evolved from the popularDoge meme, and Coinye, which used Kanye West as its mascot before being hitwith a lawsuit from the rapper.

Bitcoin ATMs also startedappearing, first in Vancouver and San Diego, before proliferating around theglobe. Boxing legend Mike Tyson joined the bandwagon, attempting to become aheavyweight in the crypto space with an eponymous ATM adorned with imagery ofhis iconic facial tattoo. Tyson’s first ATM landed in Las Vegas but, strangely,its location was chosen as The LINQ Hotel & Casino’s Promenade – a complexwhich does not accept bitcoin directly.

2016-2019: Rocketing value andsudden crashes

After years of steady growth,Bitcoin truly came into its own in 2017, and in groundbreaking fashion. Thevalue of the currency consistently broke records that year, before reaching$19,783.06 by mid-December, which remains the Bitcoin’s highest-ever value.

Early adopters benefitted fromthis surge in value, including US rapper 50 Cent who accidentally made $8m froma Bitcoin account he forgot existed. Back in 2014, the rapper let fans buy hisalbum Animal Ambition using bitcoin. Users could buy the album for afraction of the price of a single bitcoin, worth only $662 at the time. He thenlet his account lie unused for years, before discovering in 2018 that the$400,000 he originally made on the bitcoin album sales had snowballed to almost$8.5m in value. 50 Cent confirmed his new windfall on social media, commenting:“Ima keep it real, I forgot I did that s**t lol.”

Meanwhile, a whole host ofcelebrities continued to ride the crypto wave. Pitbull announced Smackathon, acryptocurrency designed to revolutionise payments in the music industry.Gwyneth Paltrow teamed up with bitcoin wallet Abra, and Lionel Messi became abrand ambassador for Israeli company Sirin Labs, who later produced the world’sfirst crypto smartphone. Taking things a step further, Redfoo, of LMFAO fame,ditched his music career and focused on a new venture – programming on theEthereum blockchain.

However, Bitcoin’s boom periodwas spectacularly short-lived. Its value dropped by a third within 24 hours ofreaching its record value, eventually crashing to under $3,300 by the end of2018. Recent signs have been more positive. Bitcoin reached its highest pricein more than a year in May 2019, eventually rising to ?10,908.18 by June andfluctuating around this mark ever since.

2020: What’s next for Bitcoin?

While nobody can accuratelypredict the future of cryptocurrency, a key change that is fast approaching islikely to affect its value once more. At some point this May, the Bitcoinnetwork will automatically reduce its block reward. Miners currently receive12.5 bitcoins for each new block of transactions (a market value of $87,000),but this reward will be halved to 6.25 bitcoins. After the last halving in July2016, Bitcoin’s popularity plummeted. However, many commentators argue that theshrinking reward is making buying bitcoin more urgent, which will only see itspopularity increase this time round.

Bitcoin is set to faceincreased competition, too. It might not come from the likes of WhopperCoin(Burger King’s crypto loyalty scheme) or Garlicoin (reserved for garlic breadenthusiasts), but Facebook is due to launch its own Libra cryptocurrency in 2020,while other blockchains are providing greater incentives. Ethereum, forexample, is much faster than Bitcoin, offering completed transactions withinseconds as opposed to Bitcoin’s minutes. Fans also claim that there are moreuses for Ethereum, which may well act as a platform for distributedcomputing—which Bitcoin does not offer. 

Still, with the cryptocurrency only in its 10th year of widespread use, you can be sure that the future of Bitcoin is going to be just as innovative and exciting as its first decade.