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The history of Bitcoin (Short version)

Glossary

In 2009 the Bitcoin blockchain was born. Since then, many developments have occurred within the mining community. In this blog article you will read about the most important developments that formed bitcoin (BTC) mining as we know it today. First, let’s start with the birth of the Bitcoin blockchain.

The mining of the Genesis block

Satoshi Nakamoto, the person or persons behind Bitcoin, wrote a whitepaper in which the idea was introduced for a peer-to-peer transaction network. The idea to use a blockchain to record transactions – an immutable ledger, which proves transaction history in a decentralized manner, was a revolutionary one.

On the 3rd of January, 2009, this idea was materialized: Satoshi mined the first block, also called the Genesis block. He did this with a simple CPU, something that would be impossible to do today. From this day on, Bitcoin would continue to surprise and revolutionize the world.

GPU > CPU

A little over a year later Bitcointalk user Artforz discovered a new way to mine bitcoin. In search of more efficient and rewarding mining methods, he found out that Graphics Processing Units (GPUs) were way better at mining blocks. This discovery not only changed the game for miners, but it also affected computer gamers, albeit in a negative way.

As the discovery was made, many miners around the world began hoarding GPUs. The result was skyrocketing GPU prices and a huge shortage in the supply of said GPUs. Some of the prices doubled or even tripled during this so-called GPU crisis. With the introduction of ASIC miners, this crisis came to an end.

Mining pools

As the mining community grew bigger and bigger, several miners recognized that bundling their computational power could increase efficiency and thus rewards. At the end of 2010 the concept of ‘mining pools’ was born. One of the first mining pools was Slushpool. This pool is still among the top of mining pools today.

The next step: ASIC miners

As the years went by and more and more businesses recognized the potential of bitcoin mining, the development of mining equipment gained speed. At the beginning of 2013, the chip designer Avalon brought to market its first Application Specific Integrated Circuits (ASICs).

These chips were specifically designed for mining bitcoin, or other cryptocurrencies, and were more efficient than GPU and CPU miners. To this day ASIC miners remain the go-to choice for many starting and advanced miners. On top of that, each year these ASIC mining rigs become more efficient as development goes on. This is not only good news for your wallet and the Bitcoin network, but also benefits the environment as you can read in our blog post about bitcoin mining and renewable energy sources.

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