The price is what usually comes to mind first when people talk about Bitcoin. But what was the first ever recorded price of a single bitcoi...
The price is what usually comes to mind first when people talk about Bitcoin. But what was the first ever recorded price of a single bitcoin? And how much it has appreciated since?
Bitcoin Leapfrogs Evolution of Money
The evolution of money has historically gone through four key stages. From collectible to a store of value and then to a medium of exchange, and finally a unit of account (such as the US dollar today).
What makes Bitcoin unlike any type of money before it is how quickly it became an exchangeable good. Historically, it took eons for people to come to a consensus on a medium of exchange.
But then the internet changed everything. However, up until 2009, it still lacked a way to transfer value as it does with information.
1/ There are four stages that all market-based monetary goods pass through in their evolution to becoming a fully fledged money:
1. Collectible
2. Store of Value
3. Medium of exchange
4. Unit of account pic.twitter.com/2ljSIsNZln— Vijay Boyapati (@real_vijay) February 28, 2018
Bitcoin, being digital, borderless and censorship-resistant, allowed it to leapfrog these evolutionary stages in just a few years. In contrast, it has taken gold thousands of year to transition from a collectible to a medium of exchange and a unit of account (i.e. gold coins).
“It started as a collectible [in January 2009] because Satoshi and Hal Finey had it and they had mined the first couple of blocks,” explains Bitcoin investor, Trace Mayer, in an interview with To the Moon host, Max Keiser.
And then Satoshi sent Hal some bitcoin…and within a week someone set up an exchange where you could actually trade bitcoins for dollars. That began to establish an exchange rate ratio.
In other words, whereas gold took millennia, bitcoin has jumped “from nothing basically to a $65 billion dollar market cap” in just ten years, notes Mayer.
Bitcoin Records Its First Ever Spot Price
Within a year after its official launch, the price of bitcoin was first published by the New Liberty Standard on October 5th, 2009. On this date, one dollar equaled to 1,309.03 BTC.
BTC/USD also ‘crashed’ afterward. Its all-time record low was roughly 1,630 BTC per dollar on December 12, 2009. Though it’s safe to assume that not too many people bought this dip as only a handful even knew bitcoin existed at the time.
Today, the price of one bitcoin is around $5,500 USD and with millions of users around the globe. While the inflationary fiat dollar has ‘crashed’ against bitcoin, down to a minuscule fraction of about 0.00018 BTC today.
In other words, the price of bitcoin has appreciated a staggering 720,000,000 percent in just a decade since its first ever recorded price.
‘It’s Shaken the Planet to Its Core’
Yes, even a few bucks in 2009 would have got you thousands of BTC making you a billionaire today.
“If only…”
Of course, it was much harder to acquire bitcoin then. Your best bet was to directly get some from the small circle of people first using it, Satoshi Nakamoto included.
“…It was very early in the process of bitcoin when it jumped from collectible to exchangeable good,” explains Mayer. “So the idea of using this protocol as money was there right in the beginning.”
Then the technology started spreading, slowly at first, as small online exchanges began to spring up. Unsurprisingly, however, these digital units of scarcity have managed to integrate rather quickly in the era of smartphones and high-speed internet.
This has also allowed Bitcoin to mimic the history of gold as a store of value and money but in a much, much shorter timespan.
By being digital and easily transferrable over the internet, Bitcoin spread like wildfire. Today, it is processing hundreds of thousands of transactions a day and settling billions of dollars. What’s more, it is doing it in a decentralized way, peer-to-peer while minimizing the need to trust any central authority.
“It’s a huge deal now. It’s shaken the planet to the core,” adds Mayer.
Today, even the head of the IMF, Christine Lagarde, admits Bitcoin and cryptocurrency as a whole is a huge deal with disruptive potential. She recently said:
I think the role of the disruptors and anything that is using distributed ledger technology, whether you call it crypto, assets, currencies, or whatever … that is clearly shaking the system.
We don’t want innovation that would shake the system so much that we would lose the stability that is needed.
Will Bitcoin continue to see astronomical gains over the next decade? Share your thoughts below!
Images via Shutterstock, coin360.com
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from Bitcoinist.com http://bit.ly/2WcuFvK
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