LONDON: October 31, 2008 marked the birth of bitcoin. Ten years on, the world’s first cryptocurrency is at the forefront of a complex financial system viewed warily by markets and investors.
From its first evocation amid a global financial crisis, in a white paper written by Satoshi Nakamoto, an unknown pseudonym, bitcoin conveyed a political vision.
The “abstract” set out in the paper for bitcoin, currently worth about $6,400 per unit from a starting point of virtually zero, was for “a purely peer-to-peer version of electronic cash (that) would allow online payments to be sent directly from one party to another without going through a financial institution.”
A decade on, this continues to be carried out via a decentralised registry system known as a blockchain.
Such ambition for a cryptocurrency was fuelled by the bankruptcy of US investment bank Lehman Brothers in September 2008, an event that discredited the traditional system of “a small elite of bankers… (that) establishes monetary rules imposed on everybody”, according to Pierre Noizat, founder of the first French bitcoin exchange in 2011.
Following its creation, bitcoin evolved for several years away from the public eye, grabbing the attention for the most part of geeks and criminals — the latter seeing it as a way to launder money.
After bitcoin surpassed $1,000 for the first time in 2013, it began to attract the attention of financial institutions.
The European Central Bank compared it to a Ponzi scheme, but Ben Bernanke, then head of the US Federal Reserve, hailed its potential.
In early 2014, the cryptocurrency faced its biggest crisis to date, with the hacking of the Mt. Gox platform, where about 80 percent of all bitcoins were traded.
The result was a collapse in their value, leading to predictions of the virtual currency’s death.