Bitcoin Survived EVERYTHING They Threw At It (Episode 3)

Hello and welcome to part three of our series on Bitcoin and the fight for the future of money.

By the end of part two, Bitcoin had become very different from the weird internet experiment that Satoshi Nakamoto had launched in 2009.

It had moved out of Satoshi's hands and into those of a tiny but dedicated community.

And that community had begun building primitive versions of the infrastructure we know today.

Early wallets were about as barebones as you could imagine, but that didn't matter.

They let users hold to this strange new internet money and transact directly with others.

At the same time, the first exchanges were also being built, and they were just as primitive.

BitcoinMarket.com, crypto's first ever exchange, looked nothing like the exchanges we know today.

If anything, it looked more like an Excel spreadsheet.

In any case, more people were hearing about this new monetary system that required no bank, government or intermediary.

And the idea that you could send money directly from one person to another over the internet was a game changer.

But as exciting as that was, it soon created a problem.

That's because Bitcoin became the de facto currency of Silk Road, a dark web marketplace selling everything from drugs and fake IDs to restricted digital content.

Silk Road concealed users' identities through Tor, while Bitcoin let them transact without a central authority.

For better or for worse, Silk Road exposed Bitcoin to a much wider audience.

But by 2013, its growth had moved far beyond the dark web.

Demand was surging internationally, particularly in China.

And then, on the 27th of November, BTC crossed $1,000 for the first time ever, something its early adopters may well have hoped for, but probably not like this.

Now, eventually, the FBI shut down Silk Road, but Bitcoin itself couldn't be shut down, against all the odds it had survived, although its reputation would remain tarnished for years.

More importantly, though, Silk Road had proven that an online economy could be built around Bitcoin.

Pretty soon, legitimate businesses were being built around Bitcoin and exchanges were handling huge trading volumes.

By 2013, Mt. Gox alone had almost 1.1 million active accounts, making it the go-to Bitcoin exchange.

And Mt. Gox wasn't the only place where things were getting serious.

By December 2013, Coinbase had more than 600,000 Bitcoin wallets and had just raised $25 million from investors led by Andreessen Horowitz.

Payment processor BitPay said it had processed more than $100 million of Bitcoin payments throughout 2013.