Why 2011 was the year that everything changed for Bitcoin


It wasn’t just the aftershock of the WikiLeaks affair that made 2011 a pivotal year for Bitcoin. In the first place, it saw the arrival of imitations: developers used Bitcoin as a blueprint to create new forms of digital cash – sometimes dubbed “altcoins” – adding new features. Namecoin and Litecoin, two prominent examples, were both launched in 2011, morphing the space into a competition among several cryptocurrencies. Others that followed were little more than jokes – exhibit A: Elon Musk’s favourite, Dogecoin – used as speculation fodder on online markets; others again were outright scams.

This was also the year that Vitalik Buterin, a 17-year-old Russian-Canadian programmer, started working on the launch of a specialist publication, Bitcoin Magazine. Two years later Buterin would be instrumental in the creation of Ethereum, which triggered a change of paradigm across the whole scene. Currently the second most valuable cryptocurrency, Ethereum’s gambit was to extend the Bitcoin logic to domains other than money, aiming for a decentralised ecosystem where entire digital companies could theoretically be created and run without staff or top management. If Bitcoin had aspired to be stateless money, Ethereum’s plan was to become a Big Tech-less internet.

And 2011 was the year when Texas-born libertarian Ross Ulbricht launched Silk Road – an online marketplace for illegal drugs, which existed on the dark web and used Bitcoin as a form of payment, earning it the shady label of criminal currency, one that it is still struggling to shake off a decade later, even if in 2020 illicit activities accounted for just $10.0 billion or 0.34 per cent of global Bitcoin transactions. If Silk Road might have popularised Bitcoin among a new crowd (the drug-buying one), it was Silk Road’s highly publicised demise in October 2013 that arguably helped Bitcoin usage to spike worldwide.

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