Educational
Beginner
May 1, 2025

History of Bitcoin: How the World’s First Cryptocurrency Evolved

Bitcoin’s story spans just over fifteen years, yet it has already reshaped how Australians think about money and digital ownership. Understanding that journey helps newcomers decide when and how to get involved safely.

What Is Bitcoin?

Bitcoin is a peer-to-peer electronic cash system created by the pseudonymous developer Satoshi Nakamoto. On 31 October 2008, Nakamoto published a nine-page whitepaper explaining how value could move online without relying on banks or intermediaries. Each transaction is verified by a global network of miners, not by a central authority, ensuring censorship resistance and financial sovereignty. The smallest unit of Bitcoin is a satoshi (0.00000001 BTC), allowing for microtransactions and fine-grained value transfer.

Birth of a New Money (2009–2012)

  • Genesis block (3 January 2009): The first Bitcoin block was mined and awarded 50 BTC, launching the network.
  • First peer-to-peer transaction (12 January 2009): Hal Finney received 10 BTC from Nakamoto, proving the software worked across computers.
  • Bitcoin Pizza Day (22 May 2010): Laszlo Hanyecz paid 10,000 BTC for two pizzas, marking Bitcoin’s first real-world purchase.
  • Price discovery begins (2011): BTC began trading near AU$1 as miners, tech enthusiasts and libertarians joined a fast-growing movement.

Growing Pains and Technical Upgrades (2013–2016)

Bitcoin surged past US$1,000 in 2013 before retreating due to exchange failures and security lapses. In response, the community rolled out key improvements:

  • BIP 32 wallets: Hierarchical deterministic wallets allowed one seed phrase to manage unlimited addresses.
  • Multisignature scripts: Required multiple keys to approve a transaction, reducing single-point risks.
  • Segregated Witness testing: Optimised block space and laid the groundwork for scaling solutions.

These technical changes improved both usability and resilience without compromising decentralisation.

Mainstream Attention and Fork Debates (2017–2019)

By 2017, congestion and high fees sparked a block-size debate. One faction forked off, creating a separate chain, while the original Bitcoin adopted SegWit and retained the BTC ticker. Despite the turmoil, Bitcoin approached US$20,000 in December 2017, cementing its role in the global financial conversation.

In 2019, the Australian Taxation Office classified cryptocurrencies as property for capital gains tax purposes. This clarification encouraged wider adoption in Australia with clearer regulatory footing.

The Institutional Era and Third Halving (2020–2023)

  • Third halving (11 May 2020): Block rewards dropped from 12.5 BTC to 6.25 BTC, limiting new supply.
  • Pandemic-driven rally: As global banks pumped stimulus into economies, Bitcoin climbed from US$5,000 in early 2020 to over US$60,000 by April 2021.
  • Nation-state interest: El Salvador adopted BTC as legal tender in 2021, signalling potential for sovereign use.

During this phase, institutions entered the market, futures trading matured, and some companies added BTC to their balance sheets.

Fourth Halving and New Highs (2024–2025)

On 20 April 2024, the reward fell to 3.125 BTC. True to form, the halving sparked a fresh rally. Bitcoin exceeded AU$150,000 in December and crossed AU$170,000 by early 2025. Conversations around ETFs, sovereign wealth funds and long-term scarcity added to the bullish momentum.

How Bitcoin Works Day to Day

Mining and security
Miners solve cryptographic puzzles to add new blocks to the chain. The first to succeed earns the block reward and fees, securing the ledger and making tampering nearly impossible.

On-chain vs Lightning
The base layer processes around seven transactions per second. It’s ideal for long-term storage and large-value transfers. For small, fast payments, users turn to the Lightning Network, which allows instant, low-fee transactions by settling many off-chain and later anchoring them back to the blockchain.

Finality and responsibility
Bitcoin transactions are irreversible. Always double-check addresses and back up your wallet's seed phrase securely. If you lose your keys, there is no recovery service.

Pros, Cons and When to Use Which

  • On-chain: Offers full security and traceability. Best for long-term storage or large transfers.

  • Lightning: Enables near-instant payments with tiny fees. Great for smaller purchases but requires some technical comfort.

The right method depends on how often you transact, how much you’re moving, and how confident you are in handling your own keys.

Why Self-Custody Matters

Bitcoin was built to remove gatekeepers. But if you store your coins on a platform that controls your private keys, you’re reintroducing the very risks Bitcoin was designed to avoid. Self-custody gives you full control, but also full responsibility. That’s why choosing secure tools and building good habits is so important.

The Elbaite Advantage for Australians

Elbaite has championed self-custody since 2017. When you buy Bitcoin on Elbaite, it is sent directly to your own wallet, whether hot, cold, mobile or hardware. Your funds are never held by the exchange. Prefer to start simpler? You can use Elbaite’s on-platform wallet while you learn, then withdraw to full self-custody whenever you're ready.

Registered with AUSTRAC and committed to Australian regulatory standards, Elbaite combines the best of both worlds: peer-to-peer settlement and custodial convenience, all under one secure roof.

Conclusion: Start Your Bitcoin Chapter with Elbaite

From a nine-page whitepaper to a multi-trillion-dollar asset class, Bitcoin has evolved rapidly. Every halving, technical milestone and regulatory win has moved it closer to the mainstream. For Australians, the tools to engage safely and independently are here.

Start with Elbaite today and experience secure, self-custody trading built for the future of money.

Buy Crypto, Diversify Your Portfolio

Founded in Melbourne, Australia in 2017, Elbaite set out to make cryptocurrency investing safer and more transparent for Australians. Buy crypto and diverisify your portfolio with digital assets like Bitcoin.

"I have been a user of the Elbaite service for a long time and I keep coming back to use this service on a regular basis. An extra couple of stars should be added for the service personnel. Problems are resolved quickly and the patience exhibited by these people is legendary."

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