How Bitcoin went from being a financial ‘outlaw’ to becoming a ‘respectable’ currency

Gone are the days when the word Bitcoin conjured up images of buying illicit drugs in “dark web” markets: the perception has changed. One bitcoin costs $ 50,000 at the time of writing. Tesla has bought 1.5 billion dollars in cryptocurrency as an investment strategy.

Houses with a price tag in Bitcoin have been put up for sale and, with the implementation by more and more retailers of payment systems that allow transactions in Bitcoin, DIY equipment, fast food and coffees can be bought with digital currency in some parts of the world.

Now it is difficult to find someone who has not heard of Bitcoin, although it is more difficult to find a volunteer who can explain how the blockchain technology, on which the cryptocurrency is based, works.

Much has changed since its inception in 2009, when a coin was worth less than 1 euro; As I write this, a Bitcoin is trading at over 40,000 euros, and it has reached $ 50,000.

euronews reviews the major milestones in the evolution of the currency, talks to some of the people who have adopted it, and examines some of the less desirable impacts of its popularity.

The creator of the cryptocurrency, alias Satoshi Nakamoto, published the Bitcoin software in January 2009. Following the publication, the ‘miners’ launched the network that generated Bitcoin and confirmed transactions for the first time.

To this day, no one knows if an individual or group is behind the pseudonym. In a famous 2008 document, Nakamoto called Bitcoin “a peer-to-peer version of electronic money” and laid out its basic characteristics, such as transactions and privacy.

Bitcoin was designed on the principle that it could be used anonymously and securely, with transactions verified and recorded in a publicly distributed ‘ledger’ called the blockchain. These transactions and their verification are left to the ‘miners’.

The Silk Road site, an online black market on the “dark internet” or darknet, which became famous as a platform for the sale of drugs and other illegal goods, was launched in 2011 with Bitcoin as a payment option. Although the FBI closed Silk Road in 2013, seizing its Bitcoin holdings, other darknet markets took over using Bitcoin as currency.

While the use of Bitcoin on the Silk Road was what made the headlines, that same year legitimate payments with Bitcoin were also established. BitPay, a service provider that offers payment processing for merchants, launched in May and had more than 1,100 merchants enrolled in one year.

Bitcoin’s irruption into the big leagues is accompanied by its cohort of legends about millionaires overnight, who are the best promotion of the currency. And the more interest it generates, the more millionaires these millionaires are.

Erik Finman is known in cryptocurrency circles for being the youngest self-proclaimed Bitcoin millionaire at 18. In 2011, at just 12 years old, he invested $ 1,000 that his grandmother gave him in the cryptocurrency. At that time, a token, a bitcoin, cost about $ 12.

This Idaho native’s entry into the Bitcoin universe came about by chance meeting at a protest. His older brother took him to a rally against the arrest of activists dancing at the Jefferson Memorial, he explained.

“It was a very weak protest, small,” he added. “One guy had an orange ‘B’ that looked like a dollar sign on his shirt. I asked him, half-jokingly, what it was. And then there was a group of riot police and they told us all to get out. So, on Middle of the police run, it was like, ‘Oh, it’s Bitcoin man, it’s going to take down Wall Street, bro.’ And went out running”.

After that, Finman said that he and his older brother sought it out and became interested in altcoins. “I guess I was going through that rose-colored libertarian phase at the time, which changed my view of the world. You know, when you’re 12, it’s crazy.”

“What most kids felt for video games or sports, my hobby was Bitcoin,” he told Euronews.

Now 21, Finman has grown his crypto holdings and created a multi-billion dollar crypto company. He has also funded projects such as making a real-life Dr. Octopus costume, “which was really cool,” as well as other charitable initiatives.

Have you noticed a change in perception of Bitcoin? “Now he’s becoming a lot more ‘establishment’. I think a lot of that has to do with the cult around him. Not that he was too big to fail, but he had a fan base that was too fanatical.”

2013 – First Bitcoin ATMs

The Slovak capital Bratislava was one of the first cities to see a Bitcoin ATM installed after the first was installed in Vancouver, Canada in October 2013. There are now more than 3.5 million worldwide.

2017/2018 – Bitcoin price rises … and then plummets

For many, 2017 was the year they heard about Bitcoin. The token had reached an all-time high of $ 19,700 (16,236 euros) by the end of the year amid a media frenzy. Its rising price also meant greater institutional interest, governments and investors focused on it and the development of other digital currencies to compete with Bitcoin. The Bitcoin narrative was bolstered by reports of money printing by central banks – one of the key features of the cryptocurrency is that it is limited to exactly 21 million coins and not one more.

But then Bitcoin prices tumbled through a series of declines in 2018, dropping again to $ 3,700 (3,048 euros) by the end of the year – marking one of the steepest examples of the unpredictable price swings characteristic of the digital currency.

For the Bitcoin Family, 2018 was a year they had to get through. Originally from the Netherlands, in the summer of 2017 they sold almost all their possessions and invested them in Bitcoin, with the aim of becoming “digital nomads”, living a minimalist lifestyle, powered by digital currency.

“You can’t look to the future. We live very simply, we live day to day,” explains Didi Taihuttu, the father of the Bitcoin family.

“In 2018 we said to ourselves: ‘We are going to fuck this year, we are going to live in camping areas, to live in nature, to live in beautiful Asian countries, and we are going to see it as an adventure.’ How can we save as much Bitcoins as possible but still enjoy life? ‘ A camper in Portugal by the sea, sleeping for free, showering on the beach – all the things that girls had never done before. And the girls were saying, ‘Oh yeah, that’s an adventure. It’s not our parents who are depressed because Bitcoin is sinking. ‘”

And that’s what the family did. After passing 2018, they have been traveling for more than three and a half years and living the nomadic lifestyle that they hoped the cryptocurrency would allow them. “In 2018, life cost us one Bitcoin a month. Now, in 2020, one Bitcoin buys us a year,” said Taihuttu.

He and his wife took their three daughters in search of freedom and “to stop being part of the system.”

For the first six months of their Bitcoin-powered travels, they kept their traditional bank accounts, but in recent years they ditched them and have only used cryptocurrencies and crypto solutions. Before getting their first crypto debit card two years ago, they bought Bitcoin coupons online and exchanged them for groceries or McDonald’s coupons, booking everything from flights and hotels online with Bitcoin.

“Of course, it’s a bit of a gamble,” Taihuttu said. “But on the other hand, you are only gambling if you are not willing to lose and for us, at that point in life, we clearly realized that money no longer had any value for us. We were willing to lose everything, everything. the money, all the luxury, because that no longer mattered to us. “

What does the future hold for the Bitcoin family? “That is a very difficult question. In my case, I have traveling blood that wants to explore the whole world, but we have already gone from traveling very fast to traveling slowly. We stay in each country a minimum of four or five months to really explore the world. country and meet the people, the culture. “

In addition to continuing the charitable work they have been carrying out for several years, Taihuttu says that the family is studying the possibility of creating some “digital nomadic living places” in Portugal and Thailand so that their daughters and wife can have “bases social”.

2020 – A crash, an all-time high, and PayPal adoption

Last year was an eventful year in the Bitcoin universe. The online currency experienced a “flash crash” in March amid a global economic slowdown caused by the coronavirus pandemic, but began a vertical rally that accelerated in early October.

At the beginning of 2020, Bitcoin was still considered a marginal investment, but by the end of the year it had almost quadrupled in value and had reached an all-time high above $ 28,000 (23,072 euros), becoming a fixed topic in the conversations of the big and small investors.

Microsoft was an early adopter of the technology and began accepting the currency as a form of payment for digital items in December 2014. But it was the announcement by the internet giant PayPal that it would allow its customers to buy and sell Bitcoin in October. last year, which signaled that the cryptocurrency had been accepted into mainstream culture.

2021 – Tesla buys Bitcoin but environmentalists denounce its high energy consumption

Bitcoin has reached the record figure of $ 50,000 (41,257 euros) thanks, in large part, to the fact that Tesla announced that it had bought 1.5 billion dollars of this virtual currency.

But is this digital gold rush for a decentralized currency managed by its users too good to be true? Well, environmentalists are drawing attention to the less publicized side of Bitcoin: its energy consumption.

The computing power that cryptocurrency demands to mine and validate transactions is immense. A recent analysis by the University of Cambridge put energy consumption into perspective by saying that Bitcoin uses more electricity annually than all of Argentina.

Critics have attacked Tesla, which calls itself “accelerator of the world’s transition to sustainable energy with electric cars, solar energy and integrated renewable energy solutions for homes and businesses”, for choosing to invest in the tokens, recalling that it will against your pro-environment message.

While many sing the praises of Bitcoin, in addition to reaping its benefits, its growing notoriety and the attention that comes with it has raised its ethics question. Whatever the fate of the digital currency, devotees “HODL” – the community lingo for holding the cryptocurrency instead of selling it – believe that regardless of the crash, Bitcoin will rise again.