5 Years ago today (or last night, depending on the timezone of Satoshi when he published it) Bitcoin was born. Someone or some group aligned with the Cypherpunks calling him/themselves Satoshi Nakamoto published this paper on the cryptography newsgroup mailing list.
This post will be a history lesson of those 1st 5 years for those of you who like money &/or freedom.
Before publishing it, like the rest of the Cypherpunks, Satoshi had extremely libertarian/anarchist views and decided that a decentralized money would help the cause of freedom and made it happen.
In Sept 1992 the Cypherpunks got organized online from random hackers from all walks of life, and really they even started on bulletin boards before the first browsers. Around that time Tim May (chief scientist at Intel at the time) wrote the short "Crypto Anarchist Manifesto" that really started to gel these people together, and ever since in one form or another they've been sharing cryptography knowledge and philosophy (mostly AnarchoCapitalist values) widely.
In 1994 the Cyphernomicon was published, defining cryptoanarchy and served as the core text of the movement that acted as their rulebook. It pushed voluntary values and the importance of strong encryption above all. Here's an important excerpt:
Much of the technology you use today was made by this group, including that https: in your browser right now, most forms of usable encryption, proxy servers, and of course bitcoin, to name a few.
In short, this leaderless group worked together as a force of good for the world, and tens of thousands of cypherpunks are out there anonymously doing things today working towards this shared vision. Way before it's time, these guys defined the online struggle we live in today and are still working, invisibly, behind the scenes to create alternatives to this NSA-dominated world for you and I to prosper in.
There is no way to get in contact with the cypherpunks anymore; the list is dead, they've apparently disbanded, and with their legend goes 1,000 spinoff histories... But I can assure you that they're out there in large numbers working on technology that you're using now and will be using more of soon.
Julian Assange of course created wikileaks and still runs it today while trapped inside the Ecuadorian embassy in London. Wikileaks was only his 2nd best contribution IMHO, with the Rubberhose file system being far more important to our future freedom from tyranny. Bitcoin donations are pretty much his only source of income now other than his book sales.
John Gilmore was one of the very first cypherpunks, also a founder of Sun Microsystems and helped create GNU linux. Ever type a .* into a command prompt? That was his. Today he heads up the EFF.
A few other cypherpunks obviously came over into the bitcoin forums, helping Satoshi put together the first bitcoin client. The idea of bitcoin has furthered their philosophical goals more than any other invention of theirs, excepting maybe bittorrent. (Invented by Bram Cohen, another early cypherpunk.)
Today these guys are mostly retired, take few interviews, and generally just try to stay out of the sights of a USSA that has hunted them down for decade or so now. Here's a Jeff Berwick interview of one of them, Sandy Sanfort, if you're interested in some history straight from the horses mouth.
Anyway, they quickly slapped together a working first version of the bitcoin-qt client, and on January 3rd, 2009, Satoshi himself mined the "genesis block," for which he was rewarded 50 bitcoins. Many others soon started mining (on their CPUs of course, GPUs weren't even dreamed about yet) and they piled up a few hundred thousand bitcoins between them over the next many months.
All that time, bitcoins were intended for use as money but no one had bought anything with one... They even published a "suggested exchange rate" of $1 to 1300 bitcoins for a while, but no one bit at that price. For that first year they were just sending btc back and forth to each other for testing and for fun! Literally, they weren't worth a Zimbabwe buck for the first year or so.
Until May 22nd, 2010, that all changed. The way you make something a currency is by trading it for something tangible, and therefore setting a precedent for its price. This was done when a bitcointalk forum member named laszlo bought a $25 pizza (delivered) from another forum member for the fine sum of 10,000 bitcoins. (About $2 Million today) That price was set that day and ever since bitcoin has grown at least 1,000% per year in price, without fail. I see no reason why this rate of growth would ever slow down until bitcoin is the world's reserve currency.
On Feb 9th, 2011, 1 BTC = 1 USD (Dollar parity) on MtGox, the first exchange to trade for bitcoins.
Today we're at $215 on MtGox, but no one really uses gox anymore because the USSA has basically crippled the ability to withdraw your funds there. Nowadays we mostly go by the Coinbase, Bitstamp or BTC China price, which are all right at about $200 today. Silicon Valley's Coindesk.com does a good job of keeping up with the price index for everyone.
I first investigated bitcoins at $3, and grabbed 10 of them for fun. (/facepalm.gif) Sadly I didn't get involved much yet, and 2011 would have been a great year to do so since pretty much half of the news that happened to bitcoin happened that year... So many new services, vendors, assisting technologies, news reports, etc. happened that year but I was twiddling my thumbs. In june there was a huge article in Gawker magazine that talked about the Silk Road for the first time and the price had it's first major bubble... I didn't see it until almost a year later, just before I wrote my infamous 5K post.
2012 saw a 50k coin theft, Satoshi Dice become so popular that over half the transactions on the network all went to just that one site, and the creation of the bitcoin foundation in September. That's about it for 2012, that and thousands upon thousands of small vendors signing up.
2013 so far has been incredible, to say the least. It started off with Silicon Valley taking note of bitcoin and investing millions in a dozen different businesses here that we now use every day. The press grew from that, until in May we had the $266 spike when Cyprus stole 10% of their depositors from all bank account holders in the country... Half of Europe hopped onboard bitcoin at that time and you could literally watch the money and power flow from MtGox over to Bitstamp.
There have been a bunch of regulations aimed at bitcoin since from the USSA, but they've mainly just hurt MtGox and anyone looking to sell bitcoinATM machines here. (Vancouver put the first BitcoinATM in service this week. So far there has been a constant line of people at it!)
China officially took over as the #1 bitcoin-loving country about a month or so ago, when BTC China's volume surpassed the other exchanges' volumes. (The number of bitcoin client downloads in china had surpassed all other countries downloads months earlier) London, Russia and Slovenia also have extremely popular bitcoin exchanges too, so the world is currently kicking the USSA's ass with this important technology. Even Kenya's cellphone-based M-PESA network, in the hands of Billions of unbanked Africans, can now get bitcoins easily and trade them locally while we peasants in the land of the free pretty much cannot.
