What Are Bitcoin’s Origins?

Banks Editorial Team · March 15, 2018

The bitcoin history is simple on the surface but complicated once you dive into it. That makes bitcoin’s history exactly like bitcoin itself. Here’s a look at the origins of bitcoin.

In one sense, the history of bitcoin is simple: It was created by a middle-aged Japanese man named Satoshi Nakamoto in early 2009.

That’s a very basic summary of bitcoin’s origins, however. To understand where bitcoin really came from, you have to work through a few big questions.

How Did the Blockchain Originate?

The first is the broader history of blockchain technology, which we also discussed in a recent article.

The conceptual origins of blockchain can be traced to a 1991 academic paper titled “How to Time-Stamp a Digital Document.” The authors of the paper proposed a type of data storage system that was similar in key ways to modern blockchains.

But the 1991 paper was just a concept. It wasn’t until the birth of the bitcoin blockchain on January 3, 2009, that this theory saw its first implementation.

It also is not very clear to what extent the 1991 paper, or similar academic research that followed, may or may not have influenced the creation of bitcoin—which brings us to the second question:

Who Created Bitcoin?

Satoshi Nakamoto was the pseudonym used by the author of a whitepaper that was published in the fall of 2008 describing the bitcoin blockchain.

The paper didn’t identify which concepts might have influenced the author’s thinking, so it’s hard to trace the direct intellectual origins of bitcoin.

More importantly, to this date, the true identity of Satoshi Nakamoto remains a mystery. At the time of bitcoin’s origin, Nakamoto claimed to be thirty-seven years old and living in Japan, but there was no way to confirm that assertion.

Based on Nakamoto’s flawless command of English, his use of British spellings and the fact that his online activity dropped off during British nighttime hours, there is speculation that he is British. But that’s just an informed guess.

It’s also possible that Nakamoto is not a single person. Bitcoin may have been created by a group of people who all chose to hide their identities behind the Nakamoto pseudonym.

How Did Bitcoin Become Popular?

It took several years for bitcoin to emerge from an obscure digital currency that was known only to a small circle of technology enthusiasts into a widely traded asset.

What you might call bitcoin’s first big break came in 2010, when bitcoin was used to purchase two pizzas. (The pizzas cost 10,000 bitcoin, which would be worth around $100 million at today’s valuations.)

Bitcoin also received a publicity boost in 2012, when the Winklevoss twins bought $10 million worth of bitcoin.

By 2015, banks like Barclays were showing interest in bitcoin, and the cryptocurrency had started to become mainstream. Banks’ stance toward bitcoin has become more complicated in recent years, with many now banning bitcoin purchases via credit card. What’s next for bitcoin and banks? The future remains uncertain. However, amid talk of bitcoin ETFs and clear interest by the SEC in regulating bitcoin, it’s likely that the digital currency is here for the long haul—which may have been difficult for Nakamoto to imagine when he created the first bitcoin nearly a decade ago.

Banks.com provides the most up-to-date information on bitcoin and banks as well as helpful financial tools for the savvy investor. If you’re interested in getting a better look at your finances, get your credit report from banks.com.

You may also like

  • For those looking to use credit products to buy bitcoins, the situation currently is bleak. Concerns about the bitcoin price correction and the obligations the banks may be under as part of their customer protection…

  • Bitcoin, in the space of a few years, has gone from a fringe experiment on internet message boards to a widely traded asset with a complicated future. Depending on who you ask, bitcoins and the…

  • Buying bitcoin on an exchange is not the only approach to bitcoin investing. Investors can also mine bitcoin. Here's what bitcoin mining means and how it might factor into your bitcoin investing strategy. What Is…

  • Hacking is not uncommon in the cryptocurrency world. Earlier this year thieves made off with $534 million worth of NEM, while Fortune reports that since 2015 about $400 million worth of ICO funds have been…