VACB_Pub_10_2021-Issue 2-FLIPBOOK

The Commun i tyBanker 6 F E A T U R E T he payments industry is abuzz with excitement as one topic continues capturing headlines, with profound implications for community banks: Bitcoin. As the original digital currency, Bitcoin has steadily climbed from obscurity to reach a total market capitalization of over  $1 trillion. However, the lofty valuations often come with steep declines — it is not uncommon for Bitcoin’s value to rapidly plummet  in a matter of hours. With digital currencies reshaping the U.S. payments system that community banks and their customers depend on, what exactly is Bitcoin, and from where did it arise? Origins of Bitcoin The story of Bitcoin started in the murky corners of the internet on  November 1, 2008. On that date, a person or group called Satoshi Nakamoto uploaded the original white paper that laid out the vision for a “purely peer-to-peer version of electronic cash” that would permit people to send payments without using financial institutions as intermediaries. This new form of digital money depends on cryptography to secure transactions — thus, the word cryptocurrency was born. Bitcoin launched on Jan. 3, 2009, when Nakamoto created the first transaction block, now known as the  genesis block. The block contained a message reading “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks” that serves as a timestamp and criticism of the traditional financial system and the Great Recession. Shortly thereafter, the first transaction occurred on January 12 when Nakamoto  sent  ten bitcoin to Hal Finney as a test. Nakamoto continued to support the development of Bitcoin until posting a final entry on the Bitcoin Forum on Dec. 12, 2010, and  final communications  to the crypto Crypto Chronicles: Bitcoin 101 for Community Bankers By  Brian Laverdure