On 18 August 2008, the domain name bitcoin.org was registered.[11] Later that year on 31 October, a link to a paper authored by Satoshi Nakamoto titled Bitcoin: A Peer-to-Peer Electronic Cash System[12] was posted to a cryptography mailing list.[11] This paper detailed methods of using a peer-to-peer network to generate what was described as "a system for electronic transactions without relying on trust".[13][14][15] On 3 January 2009, the bitcoin network came into existence with Satoshi Nakamoto mining the genesis block of bitcoin (block number 0), which had a reward of 50 bitcoins.[13][16] Embedded in the coinbase of this block was the text:
The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.[17]
The text refers to a headline in The Times published on 3 January 2009.[18] This note has been interpreted as both a timestamp of the genesis date and a derisive comment on the instability caused by fractional-reserve banking.[19]:18
The first open source bitcoin client was released on 9 January 2009, hosted at SourceForge.[20][21]
One of the first supporters, adopters, contributor to bitcoin and receiver of the first bitcoin transaction was programmer Hal Finney. Finney downloaded the bitcoin software the day it was released, and received 10 bitcoins from Nakamoto in the world's first bitcoin transaction on 12 January 2009.[22][23] Other early supporters were Wei Dai, creator of bitcoin predecessor b-money, and Nick Szabo, creator of bitcoin predecessor bit gold.[13]
In the early days, Nakamoto is estimated to have mined 1 million bitcoins.[24] Before disappearing from any involvement in bitcoin, Nakamoto in a sense handed over the reins to developer Gavin Andresen, who then became the bitcoin lead developer at the Bitcoin Foundation, the 'anarchic' bitcoin community's closest thing to an official public face.[25]
The value of the first bitcoin transactions were negotiated by individuals on the bitcoin forum with one notable transaction of 10,000 BTC used to indirectly purchase two pizzas delivered by Papa John's.[13]
On 6 August 2010, a major vulnerability in the bitcoin protocol was spotted. Transactions weren't properly verified before they were included in the transaction log or blockchain, which let users bypass bitcoin's economic restrictions and create an indefinite number of bitcoins.[26][27] On 15 August, the vulnerability was exploited; over 184 billion bitcoins were generated in a transaction, and sent to two addresses on the network.
On 22 March 2011 WeUseCoins published the first viral video[34] which has had over 6.4 million views. In September 2011 Vitalik Buterin co-founded Bitcoin Magazine. On 23 December 2011, Douglas Feigelson of BitBills filed a patent application for "Creating And Using Digital Currency" with the United States Patent and Trademark Office, an action which was contested based on prior art in June 2013.[35][36]
Among the factors which may have contributed to this rise were the European sovereign-debt crisis—particularly the 2012–2013 Cypriot financial crisis—statements by FinCEN improving the currency's legal standing and rising media and Internet interest.[126][127][128][129]
Until 2013, almost all market with bitcoins were in United States dollars (US $).[130][131][132]
As the market valuation of the total stock of bitcoins approached US$1 billion, some commentators called bitcoin prices a bubble.[133][134][135] In early April 2013, the price per bitcoin dropped from $266 to around $50 and then rose to around $100. Over two weeks starting late June 2013 the price dropped steadily to $70. The price began to recover, peaking once again on 1 October at $140. On 2 October, The Silk Road was seized by the FBI. This seizure caused a flash crash to $110. The price quickly rebounded, returning to $200 several weeks later.[136] The latest run went from $200 on 3 November to $900 on 18 November.[137] Bitcoin passed US$1,000 on 28 November 2013 at Mt. Gox.
Prices fell to around $400 in April 2014, before rallying in the middle of the year. They then declined to not much more than $200 in early 2015.[138]