![]() “The big names we know as ‘ whales’ today got into bitcoin just before the 2013 bubble,” Boonen says. He notes that the coin has been through a series of bubbles, with each top higher than the previous one. The shortlived run in the price put bitcoin on the map, according to Max Boonen, the founder of B2C2, one of the largest trading companies in crypto today. ![]() The launch of trading platforms triggered the first bubble in bitcoin’s price, when the exchange rate ballooned to $32 before collapsing to around $2 in 2011. They allowed early adopters to mine their own coins as well as trade them. These early exchanges - for example, Mt.Gox - were based in Asia, catering to retail investors in the region who had developed an appetite for the asset from their gaming background. Others, such as billionaire investor Michael Novogratz, were attracted to bitcoin because of its scarcity, with the 21m unit cap.īy 2011, bitcoin had become sufficiently popular for trading platforms to gain traction. But, against this shaky macroeconomic backdrop, interest in bitcoin was starting to pick up.įirst came libertarians and computer geeks, followed by currency traders and the wider financial trading community, some of whom were intrigued by the fact that the technology made it impossible to change or erase past transactions. Interest rates had plummeted in the wake of the global financial crisis and central banks had launched massive bond-buying programmes to shore up their economies. To say this made a splash would be an exaggeration. In May 2010, a man in Florida paid 10,000 bitcoin (the equivalent of more than $600m at today’s prices) for two pizzas, the first purchase with the digital coins. Nakamoto then mined the first bitcoin in January 2009, marking the date the blockchain network and digital coin went live. It would be the basis for a digital currency called bitcoin, which can be “mined” by deploying computers to solve puzzles. Pierce was an early adopter of bitcoin, after an unknown author using the pseudonym Satoshi Nakamoto published a paper in October 2008 outlining proposals for a new technology called blockchain, which would rely on the agreement of users to operate, rather than work as a centralised entity. “After World of Warcraft gold, the intellectual leap required to recognise the value of bitcoin was very small,” Pierce adds. In the process, they laid the foundations for the cryptocurrency industry. Together with William Quigley, now chief executive of the Worldwide Asset eXchange, the largest non-fungible token (NFT) platform, they created a market place for in-game tokens that is now worth $200bn. “Just because something is not tangible, it doesn’t mean it’s worthless,” Pierce says, recounting how he employed hundreds of people in China and South Korea to play video games and earn the in-game tokens, which he then sold to lazier customers in the west. In the early 2000s, former child actor Brock Pierce, a US presidential candidate in 2020, realised that gamers were happy to buy tokens to reach the next level instead of completing tasks to earn them. ![]() It may seem unlikely today, when cryptocurrency markets are worth more than $2tn, that their ancestry lies in World of Warcraft and Second Life, the once-popular virtual-reality games. The origins of digital assets - such as bitcoin and ether, non-fungible tokens, smart contracts and the thousands of “shitcoins” out there - can be traced back to video games where avatars played and sometimes worked, acting out fantasy lives imagined by their human creators. The metaverse might look like a cutting-edge concept, with people creating digital versions of themselves to interact with other avatars in a virtual world, but this is a nearly 20-year-old idea, only slightly updated. Simply sign up to the Cryptocurrencies myFT Digest - delivered directly to your inbox.įacebook’s decision, last month, to rebrand itself as Meta is actually quite retro.
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