The origins of Bitcoin: Markets and Pizza Day!

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This series looks back on the history of Bitcoin. Read part one, two, and three.

Bitcoin was initially designed to be a peer-to-peer digital currency that would help facilitate easier financial transactions around the world. Bitcoin was first introduced in 2008 and, within a year, it was starting to gain traction among a small but growing following. Looking back at what happened in 2010, it’s not difficult to find a few key activities that would go on to shape how the cryptocurrency would start to be received as people tried to understand exactly what the technology was all about.

In February of that year, the first Bitcoin exchange, Bitcoin Market, was introduced. A month later, on March 17, it saw its first trade. It had been primarily accepting PayPal for deposits, but the two entities had a major falling out (some say PayPal scammed the exchange out of its money) and the exchange began to fizzle. It would then be replaced by Mt. Gox, which has its own sordid story. 

A few months later, on May 22, the first reported purchase of goods was made using Bitcoin. Laszlo Hanyecz, a crypto miner, purchased two pizzas at a price that, if purchased today for the same BTC amount, would give most people a heart attack. He spent 10,000 BTC for the pies, but that was only worth about $25 at the time. Today, 10,000 coins are worth over $91 million. It’s also thanks to Hanyecz that there is now an official holiday called Bitcoin Pizza Day, an annual celebration of his purchase that sees pizza parlors across the globe busy making pies to celebrate his transaction.

In September, the first block to be solved using spit allocation of a block reward was mined—it was block 79764 and was mined on September 14. That same month, a Bitcoin contributor, Jeff Garzik, gave 10,000 BTC to have the CUDA miner client made open-source. It cost more than the $25 paid by Hanyecz four months earlier. By now, the price had risen, and 10,000 coins were worth about $625. 

The first mobile-to-mobile private Bitcoin transaction would take place in December, when 0.42BTC was sent between two wallets. The test went well, but the sender wasn’t willing to risk a lot. 0.42BTC was worth just $0.10. 

Also that month, after seeing how Bitcoin had swayed from the original whitepaper on Bitcoin, the man who started it all went silent. On December 13, Satoshi Nakomoto exited from BitcoinTalk for the last time. 

2010 saw BTC’s price rise substantially. At the beginning of the year, 10 BTC was worth about $0.20; by December 31, that same amount had increased to $2.90. This was well before Bitcoin really took hold and well in advance of the $100-$20,000 explosion seen two years ago.