Bitcoin Founders' Journey - The Money of Tomorrow, Today?

Welcome to our "Founders' Journey" series by CoffeeSpace, where we explore the remarkable stories and cofounder journeys behind the world’s most successful startups.

In this edition, we explore the journey of Bitcoin, the decentralized digital currency that has become synonymous with financial innovation and the future of money. Since its creation in 2009, Bitcoin has revolutionized the way people think about financial sovereignty, establishing itself as a defining financial and global tech force. This article explores Bitcoin’s founding journey, examining its pivotal role in fostering a new era of peer-to-peer digital transactions in an ever-evolving economic and technological environment.

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Although there have been earlier attempts to create a decentralised cryptocurrency for the masses, Bitcoin is the first to succeed at such a grand scale. It is a peer-to-peer transaction without intermediaries like banks or governments, operating on a public database known as a blockchain which records all transactions securely. Its blockchain serves as a public ledger that ensures transparency, with every transaction being cryptographically verified, while its protocol enables trustless transactions reliant on consensus mechanisms like Proof of Work to maintain its network integrity and resistance against control by centralisation and wealth alone. Bitcoin is also not controlled by a single entity, making it censorship-resistant and therefore eliminating counterparty risks and control. In short, Bitcoin exists digitally, is easily transferable and divisible into smaller units, verifiable, and scarce with its limit capped at 21 million coins, perfecting the beginning of introducing cryptocurrency to users worldwide, making it accessible to anyone at all.

In the annals of technological innovation, the emergence of cryptocurrency remains as mysterious as it is captivating. At the heart of this narrative of the first blockchain cryptocurrency, Bitcoin, stands Satoshi Nakamoto, a pseudonymous figure who fundamentally challenged the global financial ecosystem with a single white paper published in 2008. This is a story of the technological rebellion and financial innovation of Bitcoin, and with it the rise of the power of decentralized thinking.

Introductory Cryptocurrency Concepts & Terms

Here are some commonly used concepts in Bitcoin for a simpler understanding into the world of cryptocurrency. 

1. Bitcoin: The digital cryptocurrency operating on a blockchain which is not controlled by any central authority.
2. Blockchain: A public, distributed ledger that records all Bitcoin transactions. It’s made up of blocks of data that are linked together in a chain. Each block contains a set of transactions and is verified by miners.
3. Mining: The process by which new Bitcoin is created and transactions are verified. Miners use powerful computers to solve complex mathematical puzzles to add a new block to the blockchain, earning Bitcoin as a reward.
4. Block: A package of Bitcoin transactions that are added to the blockchain. Each block contains a set of transactions, a timestamp, and a reference to the previous block.
5. Block reward: The reward given to miners for verifying transactions and adding a new block to the blockchain. This reward halves approximately every four years in an event called “halving.”
6. Halving: An event that occurs roughly every four years (or every 210,000 blocks) where the block reward is cut in half. This reduces the rate at which new Bitcoin is created and helps control inflation and create scarcity of the supply.
7. Node: A computer that participates in the Bitcoin network by validating and relaying transactions to maintain the decentralized nature of the blockchain.
8. Fiat: Government-issued currency, like USD, EUR, or JPY, that is not backed by a commodity (for example, gold). Bitcoin is often compared to fiat currency because it operates outside of traditional banking systems.
9. Public key: A cryptographic address that allows others to send Bitcoin to your wallet. Think of it as your email address for receiving Bitcoin.
10. Private key: A secret code used to access and spend Bitcoin from your wallet. It’s like a password and should be kept secure. If someone gains access to your private key, they can spend your Bitcoin.

The Humble Beginnings of Bitcoin

Before Bitcoin's inception, digital currency was not a novel concept. Cryptographers and computer scientists had long explored the potential of creating a digital monetary system that could operate outside traditional banking infrastructures. Pioneers like Wei Dai's B-money in the late 1990s and Nick Szabo's Bit Gold laid critical groundwork, demonstrating the theoretical possibility of a decentralized digital currency.

These early attempts shared a common vision, which is to create a financial system that could operate without central authorities such as banks or governments, protect user and transaction privacy, and eliminate the inherent inefficiencies of traditional banking. However, they all struggled with a fundamental challenge known as the "double-spending problem", which is ensuring that digital currency couldn't be duplicated or spent multiple times.

On 31 October 2008, an unknown person or a group of persons by the name of Satoshi Nakamoto published a groundbreaking white paper titled “Bitcoin: A Peer-to-Peer Electronic Cash System” to a cryptography mailing list. This document laid out the blueprint for a decentralized digital currency system that could function without relying on trust in centralized authorities, such as banks or governments which may have power to control the systems.

Bitcoin was built on a novel technology at its release called blockchain, which is a distributed ledger secured through cryptographic methods. Nakamoto proposed a way to solve the double-spending problem by using a consensus mechanism called Proof-of-Work (PoW), which was a problem previously encountered by other cryptography enthusiasts when hypothesizing the model of transactions.

Bitcoin was soon released as an open-source code in January 2009, with Nakamoto mining the starting block of the chain which is also known as the genesis block on the 3rd of January, kickstarting the Bitcoin blockchain network. This blockchain, however, did not immediately cause a ripple or garner significant public attention. Bitcoin’s launch was relatively quiet and primarily limited to a niche group of cryptography enthusiasts, developers, and members of the cypherpunk community as these were people already interested in privacy, decentralized systems, and cryptographic innovations. Well-respected cryptographers such as Wei Dai, Nick Szabo, and Hal Finney were among the earliest adopters of Bitcoin, with Finney receiving the first Bitcoin transaction from Nakamoto of 10 BTC.

The first few years of Bitcoin had slow traction as there was a lack of immediate public attention due to its technical complexity for an average person to understand and see its value. Another reason was due to the fact that Bitcoin had a price of zero when it was introduced, often seen more as an experimental project than a usable currency at that time, with its price slowly jumping to $0.30 by the end of 2010.

Bitcoin Pizza Day, Nakamoto’s Handover & Bitcoin’s Initial Growth

On May 22 2020, the first known commercial transaction was publicised, when programmer Laszlo Hanyecz bought two Papa John’s pizzas for 10,000BTC, which at the time were worth approximately $41, but now valued over millions of dollars today. This would later be celebrated as “Bitcoin Pizza Day” by cryptography enthusiasts around the world. 

Blockchain analysts had estimated that Nakamoto had approximately one million BTC mined in his wallet before completely disappearing on December 12, 2010. The total untouched value is estimated to be around $40-50 billion (as of 2024) with the figure continuing to grow as time goes on. After Nakamoto published their last communication and handed the network alert key and control of the code repository over to Gavin Andresen, who later became the lead developer at Bitcoin Foundation which was founded in 2012 to promote Bitcoin. The last known communication from Nakamoto was an email to a fellow developer and since then, their true identity remains unknown with no definitive proof of who this person is despite numerous investigations and speculation of claims. To this day, Satoshi Nakamoto remains an enigma.

2011 was an eventful year for Bitcoin, starting with February when Bitcoin finally reached parity with the US dollar (1 BTC = $1) for the first time and it started growing past $1, reaching a peak of $29.60 on June 8 2011. 

Bitcoin’s First Halving, Subsequent Growth & Decline

The first Bitcoin halving took place on November 28, 2012 at block height of 210,000, which reduced the block reward for miners from 50 BTC to 25 BTC. This event is a part of Bitcoin’s programmed deflationary model, designed to limit the total supply of Bitcoin to 21 million and reduce inflationary pressures over time. The halving event gained attention in the cryptocurrency community as it marked a significant milestone in Bitcoin's monetary policy, underscoring its scarcity and setting the stage for its long-term value proposition. Following the halving, Bitcoin's price experienced significant growth, partly due to increased awareness and reduced supply inflation, further solidifying Bitcoin’s reputation as a deflationary asset.

After the early “proof of concept” transactions to ensure Bitcoin’s reliability, a surge of transactions came from black markets such as the dark web Silk Road which started to exclusively accept Bitcoin as payment, transacting millions of BTC in their trades. However, in October 2013, the FBI quickly shut down Silk Road, arresting its founder who is now serving a lifetime imprisonment, Ross Ulbricht, and seizing 26,000 BTC.

However, Bitcoin continued with its staggering gains in 2013 with the total cryptocurrency market cap being approximately $15 billion. Bitcoin crossed $100 by April and doubled its value to $200 by October the very year. The rest was history as Bitcoin crossed $1000 in November and the cryptocurrency closed the year out at $732. 

Over the years, Mt. Gox had risen to become the largest Bitcoin exchange, having faced multiple security breaches and operational issues, including hacks in 2011 and 2013. These incidents eroded confidence, though the exchange remained dominant. With the People’s Bank of China prohibiting Chinese financial institutions from using Bitcoin and restricting purchases of real-world goods with virtual currencies in China, Bitcoin started to plunge due to regulatory uncertainties.

2014 was the year that broke Mt. Gox after suffering from hacks during the years. The company filed for bankruptcy and ceased operations on February 28, 2014 after losing 850,000 BTC, shaking confidence in the crypto market with the company announcing that approximately 850,000 Bitcoin (worth around $450 million at the time) had been lost or stolen, representing nearly 7% of all Bitcoin in circulation. This included 750,000 BTC belonging to customers and 100,000 BTC belonging to the exchange itself. Mt. Gox's CEO, Mark Karpelès, faced legal scrutiny and was later charged with embezzlement and fraud. He was eventually found guilty of falsifying records but acquitted of embezzlement. However, the collapse caused a sharp decline in Bitcoin's price, which dropped from around $850 in early February to below $400 by April 2014.

‍The 2017 Hard Fork Bitcoin Split

In July leading up to August of 2017, Bitcoin experienced one of the most pivotal moments since its release, which was a hard fork that resulted in the creation of a new cryptocurrency, Bitcoin Cash (BCH). A hard fork is essentially a permanent split in a blockchain that creates two separate networks, typically due to disagreements over rules or major protocol changes. This split was the culmination of years of debate within the Bitcoin community over how to scale the network in order to accommodate  its rapidly expanding user base. The main conflict was Bitcoin’s 1 MB block size limit, which capped the number of transactions that could be processed at a time at about 7 transactions, leading to higher fees yet slower transaction speeds during high demand and traffic periods.

The scaling debate revolved around two competing solutions. One faction, which included many miners and developers, advocated for increasing the block size (e.g., to 8 MB or more). They believed this would allow more transactions per block, improving speed and reducing fees for users. The opposition, consisting of developers and Bitcoin purists, argued against this approach. They proposed Segregated Witness (SegWit), an upgrade that would optimize block usage by moving certain transaction data outside the main block, effectively increasing transaction capacity without changing the block size. This group prioritized preserving decentralization and network security, fearing that larger blocks could lead to greater centralization by making it harder for smaller participants to run a full node.

When no consensus was reached, a hard fork occurred. The blockchain split into two: the original Bitcoin (BTC) retained its 1 MB block size and adopted SegWit, while Bitcoin Cash (BCH) increased the block size to 8 MB (and later even larger) to prioritize fast, low-cost transactions. Users who held Bitcoin before the fork received an equivalent amount of Bitcoin Cash on the new chain.

The fork caused significant ripples in the cryptocurrency space. Bitcoin Cash quickly gained traction and became one of the top cryptocurrencies by market capitalization. Its proponents argued it was closer to Satoshi Nakamoto’s vision of Bitcoin as a peer-to-peer electronic cash system. However, despite early enthusiasm—especially from miners attracted by BCH’s larger blocks—Bitcoin retained its dominance as "digital gold," benefiting from its broader recognition, adoption, and strong developer ecosystem.

The 2017 fork also highlighted the difficulties of achieving consensus in a decentralized system. While Bitcoin Cash sought to resolve the immediate scaling issue, Bitcoin continued to pursue long-term solutions, such as the Lightning Network, an off-chain scaling solution. The split also inspired numerous other forks in the years that followed, though none achieved the same level of prominence. However, Bitcoin remained a valuable asset and had skyrocketed to close at $19,188 on December 16 that same year.

‍Recent news & The Future of Bitcoin

Since then, major companies and institutions have started to integrate Bitcoin as a payment option, and some even started to acquire the cryptocurrency itself. In February 2021, Tesla announced it had purchased $1.5 billion worth of Bitcoin and accepted it as payment while Paypal added support for Bitcoin in the US. Other companies like MicroStrategy, Square Inc., and MassMutual have all invested tens and hundreds of millions in Bitcoin as treasury reserve assets. 

As of late 2024, Bitcoin’s price hit another all-time high of $76,999 on Coinbase following Donald Trump's re-election as President of the United States. On December 5, 2024, Bitcoin reached and broke through $100,000 on nearly every exchange following news about the appointment of a crypto-friendly Securities and Exchange Commission Commissioner. It continuously breaks records following news releases, leading many to wonder what Bitcoin will do next.

A Triple A reporting shows an estimated 6.8% of the global population, equating to over 560 million individuals, owned cryptocurrencies. As the cryptocurrency continues to break records and reach new milestones, its future remains a subject of intense speculation and excitement to the public. Bitcoin’s recent $100,000 mark represents a significant psychological barrier, and with the ongoing growth of institutional investment, the rise of Bitcoin ETFs, and increasing mainstream adoption, many experts believe that the digital asset could reach even greater heights. However, as Bitcoin matures, it may also face regulatory challenges and growing competition from other cryptocurrencies and blockchain technologies. The introduction of scalable solutions like the Lightning Network and the eventual transition of Bitcoin's block reward nearing its final halving will further influence its future. Its role as a store of value, potential use as a hedge against inflation, and integration into global financial systems could reshape the broader economy. As more people look to Bitcoin as a digital gold equivalent, its volatility, scalability, and evolving regulations will be key factors that determine how it shapes the future of money.

Some forecasts on price predictions suggest that Bitcoin could reach between $200,000 and $500,000 by 2025, driven by factors such as increased institutional adoption and the potential establishment of a U.S. strategic Bitcoin reserve. In regards to the topic of institutional adoption, analysts from Bernstein project Bitcoin to hit $200,000 by 2025, attributing this to growing institutional and corporate demand. They note that corporate treasuries and ETFs have acquired significantly more Bitcoin since the U.S. election, indicating strong demand.

Despite optimistic forecasts, some experts caution about potential market corrections. For instance, David Foley of the Bitcoin Opportunity Fund warns that increased market volatility could lead to a price decline to $70,000, though he also sees a possibility of reaching $200,000 by 2026 if a Strategic Bitcoin Reserve is established. The incoming administration's crypto-friendly policies are expected to influence Bitcoin's future. While some anticipate a financial boom due to favorable regulations, others warn of potential market crashes and economic destabilization if deregulation leads to increased volatility.

In conclusion, Bitcoin’s journey continues to reflect its dual nature — a groundbreaking financial innovation with immense potential, yet constantly shadowed by uncertainty and volatility because of its nature. As experts debate whether the next chapter will bring record-breaking highs or sharp corrections, one thing remains clear: Bitcoin has cemented itself as a permanent fixture in the global financial conversation. Whether driven by institutional adoption, regulatory shifts, or evolving market sentiment, Bitcoin’s future will likely be shaped by both belief and speculation, making it a fascinating yet unpredictable asset to watch in the years ahead.

Conclusion: The Takeaways for Founders

Build for belief

If your conviction is strong enough, the right believers will find you. Bitcoin wasn’t built to chase trends or quick hype. Satoshi Nakamoto believed deeply in decentralization, financial sovereignty, and a distrust of centralized systems (especially after the 2008 financial crisis) and hence Bitcoin was created with the first batch of supporters being strong believers of Nakamoto’s shared vision. It is important to constantly remind yourself that the strongest products aren’t just built for markets, they’re built for missions. Build for belief, and the believers will find you.

Start with a niche

Bitcoin started as a tool built for very niche internet communities — cryptography nerds, dark net markets, and libertarian outcasts. It didn’t need nor did it expect mass adoption immediately but instead it started with building to serve a passionate, underserved niche that truly understands and needs the product. But over time, it evolved into digital gold and attracted institutional players. Serve a passionate niche first. Mass adoption comes later.

If you’re inspired by this story and want to start exploring your own ideas and find someone to get off the ground with, join us at CoffeeSpace, as featured on TechCrunch's Startup News podcast on Spotify.

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