The First Cryptocurrency: Bitcoin In 2008, an internet user known only by the internet name, Satoshi Nakamoto, published an online paper entitled ‘bitcoin: A Peer-to-Peer Electronic Cash System’, in which they detailed methods of using a peer-to-peer network to generate electronic transactions. The identity of Satoshi Nakamoto is still disputed and it is speculated that the name may be a collective pseudonym for multipal individuals. Bitcoin.org was officially registered as a domain name on 18 August, 2008 and the bitcoin network officially came into existence in January 2009 with the release of the first open source bitcoin client and the issuance of the first bitcoins. This first block of mined bitcoin, gone on to be known as the ‘Genesis Block’, was mined on January 3 with the first transaction of bitcoin currency taking place between on 12 January 2009. On 5 October, 2009, New Liberty Standard published a bitcoin exchange rate that established the value of bitcoin at US$1 = 1,309.03 BTC. It was calculated using an equation which includes the cost of electricity for running a computer in order to mine bitcoin. On 6 February, 2010, the Bitcoin Market was established and a currency exchange was born. The first real-world transaction using bitcoin took place on 22 May 2010, when someone in Jacksonville, Florida, paid 10,000 bitcoins for a pizza on the Bitcoin Forum. At the time, the exchange rate put the price of the pizza at around $25. Bitcoin has since grown and the number of transactions per day can range from 175,000 to 325,000. Since the pizza purchase, the estimated total number of bitcoin transactions is approaching
180,000,000, as of December 2016. It is believed that 14 million bitcoins have been mined so far, representing two-thirds of the 21 million bitcoin limit. But because transactions done using Bitcoin are entirely private and anonymous, the cryptocurrency has become notorious for its use in criminal activities, ranging from drug peddling to pornography and money laundering. Those illegal Bitcoin transactions have, in turn, attracted the attention of the FBI, https://www.wired.com/images_blogs/threatlevel/2012/05/Bit coin-FBI.pdf the U.S. Securities and Exchange Commission https://m.investor.gov/additional-resources/newsalerts/alerts-bulletins/investor-alert-ponzi-schemes-usingvirtual and the European Police Office, the law enforcement agency of the EU. In one prominent case in 2014, Bitcoin trader Charlie Shrem was sentenced to two years in jail for indirectly helping people swap cash for bitcoins on the Silk Road marketplace. Silk Road was an online marketplace that dealt in illegal drugs and accepted only bitcoin as payment. It was shut down by U.S. authorities in 2013. Two years later, Silk Road founder Ross Ulbricht was sentenced to life in prison.