In September 2021, the unimaginable happened: Bitcoin became legal tender in the country of El Salvador – making history. Although it has only been slightly over a decade that the digital asset’s journey has begun, given what it has been through and stood up against, its mere existence today despite all the challenges is nothing short of incredible.
With the milestone upon us, we are looking back at the summarized history of Bitcoin and its rise from being called tulips to being accepted as legal tender at retail locations like Starbucks and McDonald’s in the Latin American country. We’ll also join in on speculating what else is possible in the cryptocurrency’s bright future.
Early Bitcoin Origins As A Worthless Coin With Unlimited Potential
Bitcoin was first invented in 2008 by the mysterious person or group, Satoshi Nakamoto, who first published the whitepaper in October of that year. In January 2009, Satoshi released the open-source code on Github, where anyone can download it or review the code still today.
Few knew what the coin would ultimately be worth someday, given at the time; it was relatively worthless. Still, Hal Finney, the recipient of the first-ever BTC transaction directly from Satoshi, speculated that the cryptocurrency could reach $10 million someday.
“As an amusing thought experiment, imagine that Bitcoin is successful and becomes the dominant payment system in use throughout the world. Then the total value of the currency should be equal to the total value of all the wealth in the world. Current estimates of total worldwide household wealth that I have found range from $100 trillion to $300 trillion. With 20 million coins, that gives each coin a value of about $10 million,” Finney said.
But back then, getting your hands on some wasn’t easy and was only possible through mining. Later, the first BTC transaction for real-world goods took place. Laszlo Hanyecz famously traded 10,000 BTC for two Papa John’s pizzas. Following the historical folly, Bitcoin became the currency of choice on the dark web marketplace, which helped give the crypto asset its start as a currency. And thus, the network effect began.
Bitcoin eventually reached $1,200 at the height of its first major bubble, followed by the first-ever bear market. The cryptocurrency was promptly pronounced dead by the likes of MicroStrategy CEO Michael Saylor, who today is one of Bitcoin’s biggest bulls. But the experiment lives on, as is evident by the tech leader’s POV change.
Bitcoin Gives Birth To Entire Crypto Industry, Changes Finance Forever
Bitcoin didn’t die; it multiplied, giving birth to an entire industry of digital assets like Ethereum, Litecoin, Cardano, Dogecoin, and more – coins recently listed by the award-winning trading platform PrimeXBT. There are stablecoins, altcoins, DeFi, and NFTs, all built on the blockchain technology Bitcoin brought to reality.
When tech enthusiasts began to catch on to what was going on with the underlying tech, the next major bull market started in 2016 and 2017. At that point, Bitcoin became a household name and topped Google search results as people feverishly tried to learn all they could about the coin. But just as they did, comparisons to tulips began to plague the market.
There was no denying Bitcoin was in a bubble as it reached $20,000 per coin. But there is simply no comparison to tulips. Hundreds of years ago, the first-ever recorded financial bubble was the result of the first futures contracts. However, these futures contracts weren’t on BTC or ETH, but rather different types of flowers that were expected to be plentiful in the following season.
The first-ever bubble also caused the first-ever bubble burst, which left the Dutch in ruin and disaster all due to tulips the country is still associated with today. Bitcoin, however, is no longer compared to tulips, as another bear market still couldn’t keep the cryptocurrency down, and it has once again started a bull market. How far the coin goes this time around is anyone’s guess, but predictions range from $100,000 to $500,000 coin, with long-term expectations from Fidelity matching Hal Finney’s early calls for $10 million per BTC.
At a price of such significance, as Finney suggested also, Bitcoin would have to have fulfilled its destiny and become the most dominant form of money and wealth stored. This also could mean Bitcoin does become the global reserve currency, replacing the dollar. And it all could be starting now with the introduction of Bitcoin as legal tender in El Salvador.
The Lasting Impact Of Bitcoin On The World
What could start as just one domino falling could have a lasting impact. An arms race by governments to buy BTC to ensure El Salvador doesn’t get the upper hand could ensue, causing FOMO across every sector or wealth class.
Although the rollout has been condemned by economists and firms like the International Monetary Fund, it is a significant step in the right direction toward financial freedom for the country, which stands to save millions in Western Union fees by turning to Bitcoin. It will also give the unbanked access to financial services for the first time.
The country’s President plans to use volcano steam power to run BTC miners and generate revenue for the government that also supports the Bitcoin network. Other major firms are realizing that Bitcoin mining could be the answer to excess natural gas and oil, which is either stored or burned to dispose of. The exact process could be used to power more profitable ventures, such as Bitcoin mining.
Not getting some type of exposure to Bitcoin at this point is riskier than owning the coin at this point. At a much smaller level than El Salvador, buying BTC is a way to start. PrimeXBT offers a Bitcoin trading platform for those who want to take crypto assets more seriously. Regardless of your choice, it is becoming more evident by the day: Bitcoin and other cryptocurrencies are here to stay and will continue to make history from here on out. You can either be part of it or stay in the past.
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