This series looks back on the history of Bitcoin. Read parts one, two, three, four, five,six, seven, and eight.
Bitcoin may be 11 years old, but it wasn’t really until the major price explosion of 2017 that global interest truly began. Media outlets hyped the price increases as BTC went from $100 to almost $20,000, and there was suddenly a spike in global interest of using cryptocurrency as an investment vehicle, a solution for which it was never intended. At the very least, the attention brought digital currency more mainstream, which has helped it to grow and be better understood, and regulated, for what it truly is.
2017 saw one of the biggest jumps in acceptance of crypto as a form of payment. Japan led the way at the time, seeing the number of ecommerce retailers willing to receive crypto payments increase over 4.5 times from the level seen a year earlier. BitPay reported that the number of transactions it saw climbed 200% in a year, adding that crypto was being found more as a means of conducting business-to-business supply chain payments.
Norway and Japan both began to recognize the legitimacy of Bitcoin in 2017, with both countries acknowledging its capabilities as a form of payment. Russia joined, as well; however, that decision has now been tossed out the window as the country later took a hardline approach against digital currencies.
By June 2017, BTC’s price had increased to $3,000 and people began to wonder where everything would go from there. Suddenly, everyone became a crypto expert, commentator and analyst. Several pundits began to report that the levels would reach as much as $100,000. While the year-end price was astronomical compared to January prices, the exorbitant prices were never realized.
The following month (July), saw transaction fees periodically spiking into the three-digits, crypto users wanted an alternative that would make exchanging digital assets more affordable. BTC was already suffering from its inability to recognize how large block sizes could work on the blockchain and developers weren’t willing to listen to reason. Because of this, Bitcoin Cash (BCH) was born as a BTC forked off to create a new protocol, but even this wasn’t an ideal solution and ultimately resulted in the second death of Bitcoin.
Bitcoin Cash developers removed the superimposed hard cap that the Bitcoin Core team had implemented, raising the block size from 2MB to 8MB and consequently increasing the block cap to 32MB in the coming months. However, since the increase there were still debates on the speed in which to scale Bitcoin and achieve the true vision laid out by Satoshi a decade before. Opinions of some BCH influencers at the time, namely Roger Ver and Jihan Wu, had an anarchist view of Bitcoin, one that was decentralized from government and completely anti-regulation to suggest that people should be able to use the cryptocurrency to buy whatever they wanted.
With the crypto market as a whole now seemingly out of control, regulators began to clamp down. Across the world, financial regulators began putting checks in place that would help the ecosystem shed its “Wild West” image, led by South Korea, Japan and others. These measures helped weed out many of the questionable operations that were running rampant, and help bring a level of civility to the space. No longer would it be possible to maintain an “anything goes” attitude or business model—companies would have to develop their plans in accordance with financial rules and regulations, just like Satoshi had always intended since he first released the Bitcoin whitepaper.
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