Bitcoin’s first steps in 2010

After a difficult first year , Bitcoin quickly gained a small popularity. In 2010, this was still a very experimental project and no one had heard of it outside of a small circle of computer enthusiasts and political activists. However, it was during this year that Bitcoin was really tested on many levels.

Mining is improving

The year 2010 is the year when mining begins to take on its full meaning. Unlike 2009 when Satoshi Nakamoto was almost the only one to mine on a regular basis, in 2010 many people are starting to participate in a sustained manner.

In February, the hash rate exceeded 10 million hashes per second (10 MH / s) on average for the first time. In April, 100 MH / s are exceeded, reaching 200 MH / s in July.

Bitcoin hash rate January July 2010

Among these new miners is Laszlo Hanyecz , a 28-year-old Hungarian-born American developer. The latter is indeed interested in how Bitcoin works and seeks to experiment with it. At the beginning of April, he obtains bitcoins by buying them at NewLibertyStandardand generates his own bitcoins. After a brief attempt to overwhelm the trading network by sending bitcoins to his home address , he sets out to try to optimize the mining process. Thanks to his computer skills, he developed graphics processor mining(GPU): until then restricted to the central processor (CPU) of computers, mining can indeed be done very efficiently using a graphics card. By having a technical advantage over its competitors, Laszlo quickly occupies an important place in the production of blocks and thus accumulates tens of thousands of bitcoins.

This catches the attention of Satoshi Nakamoto who contacts him in May and asks him to slow down his operations so that everyone can participate. Satoshi explains that it is in the best interests of the project that the mining difficulty does not increase too quickly:

“I don’t want to sound like a socialist, I don’t care if the wealth is concentrated, but right now we are getting more growth by giving that money to 100% of the people than by giving it to 20%. ”

Despite a short-term slowdown in the deployment of computing power on the network, the damage is done . From there, the mining difficulty will continue to grow exponentially, with equipment that will specialize more and more. From July, the network thus exceeds the billion hashes performed per second (GH / s).

Bitcoin hash rate July October 2010

At the end of 2010, this effect was particularly noticeable and people mining with a single processor could no longer find any blocks. It is natural that, on 27 November, appears the first cooperative mining ( mining pool ). The operator of this cooperative, known under the pseudonym of slush, writes on the forum:

“Once people started using computers with GPUs for mining, mining became very difficult for other people. I’ve been on Bitcoin for a few weeks and haven’t found a block yet. […] But the new functionality of the official bitcoin client called ‚getwork‘ now allows many computers to work together, so that they are not in competition. ”

For this operator, the task consists in asking minors for proof of work of a lesser degree and to remunerate them according to the work provided when one of them succeeds in reaching the difficulty requested by the network. The day after this announcement, Satoshi reacted favorably to the idea.

Subsequently, the cooperative formed, then called Bitcoin.cz Mining , will take the name of Slush Pool and will be one of the pioneers of collaborative mining, in particular by developing the Stratum protocol . It is still active today on the Bitcoin network.

Renewed enthusiasm

The year 2010 is interesting because it marks a year of renewal for Bitcoin, with founding events and the arrival of new contributors.

On February 5, NewLibertyStandard proposes to adopt the symbol of the Thai baht for bitcoin and to use the stock symbol BTC (instead of BC). A few weeks later, on February 24, Satoshi unveiled Bitcoin’s first real logo that was inspired by the proposal NewLibertyStandard. This logo will be widely used before being replaced by the logo bitboy, created on 1 st November of the same year.

Other users who will make Bitcoin history later arrive in the same period, such as Michael Marquardt ( theymos) or Chritian Decker .

On March 17, 2010, the Bitcoinmarket.com exchange service was launched: it allows you to buy and sell bitcoin through Paypal. Founded by the user dwdollar, it is an alternative to the service previously offered by NewLibertyStandard.

Then in May an event occurs that can be considered anecdotal, but which illustrates what Bitcoin was designed for: the first purchase of a physical good in bitcoins . On May 18, Laszlo Hanyecz, having accumulated bitcoins thanks to his GPU mining optimization, wrote the following announcement on the forum:

“I’ll pay 10,000 bitcoins for two or three pizzas… like maybe 2 large so I have some left over the next day. I have leftover pizza to snack on for later. You can make the pizza yourself and bring it to my house or order it for me from a delivery service, but my goal is to have food delivered to me in exchange for bitcoins that I don’t. do not have to order or prepare myself. […] If you are interested, let me know and we can work it out. ”