The Bit(coin) Bang Theory

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How did crypto begin and who invented Bitcoin? We address these questions and other mysteries of the Crypto Verse, plus look at some key events that have happened since, including Bitcoin Pizza Day and the recent Terra Luna crash.

SOME KEY CRYPTO EVENTS: A TIMELINE
1980s
1980s
The Beginnings of Crypto

The idea of cryptocurrency started in the 1980s — currencies that lived online and where transactions were input into a ledger made secure by cryptography. Some attempts to create cryptocurrencies were made, but these were never fully developed.

1991
1991
The First Research Paper on Blockchain Tech

Blockchain technology uses cryptographic methods. The first research paper to touch on this concept was published in 1991 by Stuart Haber and W Scott Stornetta.

JAN 2009
JAN 2009
The Birth of Bitcoin

Following the publication of a paper titled “Bitcoin – A Peer to Peer Electronic Cash System” online by the mysterious “Satoshi Nakamoto”, the Bitcoin blockchain network became available to the public shortly after. Bitcoin henceforth became the first established cryptocurrency, with only 21 million Bitcoin(BTC) in circulation — this supply is fixed forever!

MAY 2010
MAY 2010
First Official Bitcoin Transaction

Isn’t it so apt that the first time someone uses cryptocurrency to make an actual purchase, it’s PIZZA? Well, actually, make that TWO PIZZAS from Papa John’s to the tune of 10,000 Bitcoins (worth US$40 then). Since then, 22 May has been known as Bitcoin Pizza Day…we certainly hope it’s pepperoni, because those meat discs kinda look like coins.

2011 ONWARDS
2011 ONWARDS
Other Cryptocurrencies are Created

The idea of cryptocurrency started in the 1980s — currencies that lived online and where transactions were input into a ledger made secure by cryptography. Some attempts to create cryptocurrencies were made, but these were never fully developed.

NOV 2012
NOV 2012
The First “Halvening”

A halvening or halving is unique to Bitcoin. It is a unique formula that caps the total supply of Bitcoin to 21 million, hence helping it retain its value. What happens is that for every 210,000 blocks mined, the amount of Bitcoin earned by miners (the block subsidy) will be halved. It takes roughly 4 years to reach one halvening. The subsequent halvening events were in 2016 and 2020.

When someone mines Bitcoin, it means that their computer is solving extremely tough math equations that help to verify transactions that happen on the Bitcoin network. In turn, new Bitcoin is generated as a reward for the miners.

DIG DEEPER
OCT 2013
OCT 2013
World’s First Bitcoin ATM Opens

It appeared in a coffee shop in Vancouver, Canada and allowed users to exchange Bitcoin for cash and vice versa.

MAY 2014
MAY 2014
The First NFT is Created

The first known NFT, or non-fungible token, was Quantum, an animated digital artwork of geometric shapes created by Kevin McCoy. Till date, the most expensive NFT was “The Merge” and was sold for a collective USD91.8 million. 

JUL 2015
JULY 2015
Ethereum is Born

Another important blockchain and cryptocurrency, Ethereum (Ether), was launched. Other than housing cryptocurrency, the Ethereum atmosphere allows for developers and programmers to create and upload “smart contracts”, which are mini programs that automatically run when certain terms and rules are met. These micro handshakes make it the perfect platform for scaling solutions and apps to be built on the Ethereum blockchain.

NOV 2017
NOV 2017
The First Blockchain Game & The Metaverse

The first blockchain game was called CryptoKitties, where you could trade, own and breed cats. With blockchain games, players can retain their assets even outside of the game. There are currently about 400 active blockchain games. Today, another blockchain environment that is gaining popularity is the metaverse (a virtual reality space; think “Sims 2”) in which cryptocurrency can be used for purchases of “Clothing”, “Homes”, etc...

FEB 2021
FEB 2021
First Bitcoin ETF Launched

The first Bitcoin ETF was launched in Canada by Purpose Investments Inc and invests directly in actual Bitcoin.

NOV 2021
NOV 2021
Bitcoin Reaches All-Time High

A halvening or halving is unique to Bitcoin. It is a unique formula that caps the total supply of Bitcoin to 21 million, hence helping it retain its value. What happens is that for every 210,000 blocks mined, the amount of Bitcoin earned by miners (the block subsidy) will be halved. It takes roughly 4 years to reach one halvening. The subsequent halvening events were in 2016 and 2020.

MAY 2022
MAY 2022
The Terra (Luna) Crash

Who’s who:
• Luna, a cryptocurrency

• Terra, a blockchain that Luna lives on TerraUSD (UST), an algorithmic stablecoin pegged to the US Dollar that uses Luna to stabilise the pegging

• Anchor Protocol, a borrowing & lending platform that promises 19% annual interest yield when investors bought UST and lent it to Anchor Protocol

Before the crash:
Luna was trading at US$116, with a market cap of over US$40 billion.
Today, Luna is worth a fraction of a cent, and the UST is down to 13 cents. Market cap is now US$1.3 billion.

What happened:
On 7 May, hundreds of millions of UST was sold. This big sell-off depegged the UST and pushed it down to 91 cents from the original 1 dollar. Although the Luna Foundation Guard allegedly sold their BTC reserves in hopes to save the peg, it wasn’t enough.

Investors then started pulling out their UST from anchor protocol and panic-selling their UST to get out and it then became a death spiral for the UST & Luna interconnected relationship (& price).…and the rest is the present.

What’s ahead:
Efforts are being made to resurrect Terra and Luna to retain its strong developer resources and admittedly one of the strongest communities in the crypto community — a billionaire investor even tattooed the project on his arm before its crash!

And just like how a solar system is interconnected, the meltdown of Terra and Luna in May caused ripples in the market. In mid-June, crypto lending platform Celsius had to suspend withdrawals as its own native token took a nose dive; then at the end of the month, prominent crypto hedge fund Three Arrows Capital (3AC) was ordered into liquidation.

Moral of the story:
It’s important to stay vigilant and know what you’re investing in.
Stay updated on the latest news via Luno's crypto education hub, Luno Discover.

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This partnership between Moneysmart & Luno is for educational purposes only. Luno Singapore has been awarded in-principle approval from the Monetary Authority of Singapore (MAS) under the Payment Services Act 2019. Cryptocurrency is a high-risk investment. The value of cryptocurrency can fluctuate significantly and you may lose the capital you invest. Before investing, we urge you to educate yourself about cryptocurrencies and to familiarise yourself with the risks involved, which are detailed in Luno’s Risk Warning: https://luno.money/24o This partnership between MoneySmart Singapore & Luno Discover and the content created is for educational purposes only. This was not written by the licensed entity, MoneySmart Financial.

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