11 years ago today, Bitcoin reached $1

On February 9, 2011, eleven years ago today, the price of bitcoin (BTC) reached a market value of exactly $1, just over two years after the first block on the Bitcoin blockchain was created in early 2009.

In the early years, there were only two ways to get bitcoin: mining it yourself, or hosting peer-to-peer trading through a forum like Bitcointalk, which Bitcoin creator Satoshi Nakamoto founded to host Bitcoin-related discussions.

In those days, peer-to-peer transactions were risky as they required trust between the transacting parties, but the stakes were not as high as they are today because each bitcoin was worth practically nothing. The first bitcoins traded for zero dollars and reached an early peak in 2010 at 39 cents.

Five free bitcoins

By 2010, interest in Bitcoin had grown and new methods of obtaining it emerged. Bitcoin Core Developer gavin andresen created a bitcoin “faucet,” a website that would give anyone with a Bitcoin address five free bitcoins. It was at this time that the first bitcoin exchanges emerged.

Bitcoin price chart at $1.

The first “real” bitcoin exchange, Bitcoin Market, was announced on the Bitcointalk forum in 2010 and launched the same year, offering a floating exchange rate for bitcoin. Before this, there was no bitcoin market to speak of and therefore no way to establish a floating market valuation of the bitcoin currency. Buyers could buy bitcoin sending another user US dollars through PayPal, while Bitcoin Market would keep the seller’s bitcoin on escrow until the seller received their money.

The most notable exchange to emerge in 2010 was the now infamous mount gox. The Japan-based exchange was hacked in 2014 with a devastating effect on many users, and the exchange went bankrupt soon after.

First real exchanges in 2011

In 2011, several new bitcoin exchanges appeared. VirWoX, an exchange for buying and selling Linden dollars, the currency of the popular virtual reality game Second Life, began facilitating trades between Linden dollars and bitcoin.

Tradehill, another exchange, allowed users to buy bitcoins “instantly” instead of submitting limit orders on their exchange. Tradehill allowed users to deposit funds through bank transfers and various payment processors.

After hitting $1, the bitcoin price rose rapidly over the next three months, peaking at $29.6 on June 7, a 2,960% gain. In what would prove to be a familiar pattern to this day, a sharp market downturn followed, with the price of Bitcoin bottoming out at $2.05 in mid-November 2011.

Those lucky, or stubborn, few who acquired bitcoin at $1 and HODLed it have, of course, made a huge profit since then. It is easy to multiply from $1 to any market price throughout the history of Bitcoin. The bitcoin market price reached its all-time high so far on November 10 at just over $69,000.