A computer programmer bearing the pseudonym Satoshi Nakamoto sent an email to a cryptography mailing list on November 1, 2008 to reveal that he had created a "new, completely peer-to-peer electronic cash system, with no trusted third party." He copied the abstract of the paper describing the concept and linked to it online. Essentially, Bitcoin provided its own native currency payment network and used a sophisticated mechanism for users to validate all transactions without having to trust any single member of the network. The currency was distributed at a fixed rate to compensate the members who invested their computing power to validate the transactions and thereby provide a compensation for their work. The surprising thing about this innovation was that it actually succeeded against several previous attempts to set up a digital cash.
Although a clever and neat concept, there was not much to suggest that anyone outside the circles of cryptography geeks would be interested in such a quirky experiment This was the case for months, as barely a few dozen users worldwide entered the network and engaged in mining and sending each other coins that started to gain collectible status, although in digital form.
But an internet exchange in October 2009 sold 5,050 bitcoins for $5.02, at a price of $1 for 1,006 bitcoins, to mark the first purchase of a bitcoin with money. The price was determined by calculating the value of the requisite electricity to generate a bitcoin. This defining moment in Bitcoin's history was arguably the most important in economic terms. Bitcoin was no longer just another digital game played inside a programmer's fringe community; it had now become a decent market with a price, suggesting that someone had created a positive interest for it somewhere. On May 22, 2010, someone else(Laszlo Hanyecz) paid 10,000 bitcoins to buy two $25 worth of pizza pies, marking the first time bitcoin has been used as a medium of exchange. It took the token seven months to transition from being a strong market to being an exchange medium.The Bitcoin network has since increased in the number of users and transactions, and the computing capacity dedicated to it, while its currency's value has risen exponentially, reaching $7,000 per bitcoin as of November 2017. After eight years, it is clear that this innovation is no longer just an online game, but a technology that has passed the consumer test and is being used by many for real-world purposes, with its exchange rate being frequently featured on TV, in newspapers, and on websites along with the national currency exchange rates.
AS WE SPEAK, 1 BITCOIN (BTC) is now worth more than $10000.
Bitcoin can better be interpreted as a distributed software that uses a currency safe from unpredictable inflation without relying on trusted third parties to pass value. In other words, Bitcoin automates a modern central bank's functions and makes them transparent and practically unchangeable by programming them into decentralized code among thousands of network users, none of whom can change the code without the consent of the rest.
