2020 has been a disruptive year for the cryptocurrency industry. Many events have caused thrills not only for people operating in the market but also for spectators and the curious.
Let’s go in order and review this year, amidst ups and downs.
The crash of March 2020: cryptocurrencies at lows
2020 will be remembered as the year of the Coronavirus. Covid was actually already being talked about in late 2019, but it seemed like a disease destined to stay in China. When the epidemic exploded with all its violence first in Europe and then in the United States, nation-states opted for hard lockdowns and economies experienced the consequences with a tremendous collapse of financial markets on March 9th which was closely followed by the collapse of the cryptocurrency market between March 12th and 13th.
Bitcoin, which only a few weeks earlier was above $10,000, suddenly fell to $4,000. For some it was the ultimate proof: the bitcoin bubble had burst again. In reality, the whole market touched minimum levels. Bitcoin, however, managed to recover, as did the entire sector. Bitcoin deserves credit not only for putting March behind it, but for touching the all-time high of $28,000.
The Bitcoin halving
Having put the big scare of March behind it, for Bitcoin, 2020 was the year of the third halving in its history. Halving is technically the reduction of rewards for miners by half. In fact, the mechanism devised by Satoshi Nakamoto involves Bitcoin miners being rewarded with BTCs, but this reward is halved every 4 years approximately. This makes mining less profitable and extracting Bitcoin more expensive, so production also decreases.
The third halving of Bitcoin occurred on May 11th at 7:23 PM UTC, at block 630,000 (halving occurs every 210,000 mined blocks), which was mined by AntPool. Since that day, “only” 900 blocks are mined daily on the Bitcoin chain.
There has long been talk about the possible consequences of the halving, theories were made about how it would affect the price, memories went back to 2012 and 2016, the years of the previous halvings, followed by the speculative bubbles of 2013 and 2017. This year, six months after the halving, Bitcoin started a bullish run that took it to $28,000. But this, perhaps, is not a bubble.
The hack against Twitter
On July 15th, a summer night (in Europe), Twitter users saw the exact same message appear on the profiles of celebrities: they all said they were organizing a 5,000 Bitcoin giveaway. The message appeared on the official profiles of major exchanges such as Binance, Bitfinex, Gemini, KuCoin, and on the profiles of Justin Sun, Changpeng Zhao and Charlie Lee.
Even outside of the cryptocurrency world, that same evening Elon Musk, Bill Gates, Barack Obama, and other celebrities wrote that they were grateful and that anyone who sent Bitcoin to an address would be returned twice as much.
What has become known as the “Twitter hack” has put a strain on Jack Dorsey’s social network, which has found itself infamously vulnerable. The attack affected 130 accounts, including official and verified ones (with the blue tick). However, the theft of the hackers was contained, “only” about 100,000 dollars. In short, it wasn’t the scam of the century, but it was certainly well-conceived.
Unfortunately or fortunately, Bitcoin is not anonymous, and after two weeks the authors have been identified and captured. They are three very young men, two from Florida, and one from the UK. Their mistake was moving the stolen funds to Coinbase, which reported them.
The affair reminded the crypto industry that Bitcoin is not as anonymous as certain narratives make it out to be. It also reminded Twitter that it needs to better protect its users.
The Bitcoin Cash fork
It had been in the air for some time: the Bitcoin Cash community couldn’t work through some growing divisions. The different opinions among the people led to the division of the blockchain and the birth of a new cryptocurrency, Bitcoin Cash ABC.
The reason for the dispute was Amaury Sechet‘s proposal to change the protocol in order to allocate tokens for the development. The “miner tax” did not please everyone.
Therefore, on November 15th, two years after the fork that gave birth to Bitcoin Satoshi Vision, the Bitcoin Cash chain underwent a new split that gave birth to Bitcoin ABC, but the main chain remained that of BCH (technically, Bitcoin Cash Node). Despite the initial difficulties, Bitcoin Cash ABC survived, although it still does not appear listed on CoinMarketCap.
Ethereum 2.0
On November 4th, Vitalik Buterin announced the deposit contract of Ethereum 2.0: thus begins Ethereum’s transition to phase 2, from Pow (Proof of Work) to Pos (Proof of Stake). The roadmap called for at least 16,384 deposits of 32 ETH, by December 1st. Vitalik Buterin himself contributed by staking 3,200 Ether. However, a few days before its debut, it seemed that the threshold of 524,288 ETH was far away. But then, surprisingly, in the last week of November, the threshold was reached that allowed the launch of phase zero of Ethereum 2.0.
The Beacon Chain for now coexists with Ethereum’s main chain, with the difference that the former supports staking. While waiting for the transition to be made, Ethereum is experiencing a moment of glory, with the price back above $700. This hasn’t happened since May 2018.
ATH for Bitcoin
Three years after December 17th, 2017, on December 16th, 2020 to be precise, Bitcoin returned to $20,000 again. It seemed like a scene we had seen before, but this time was different. If in 2017 Bitcoin touched $20,000 (only on some exchanges) and then started a precipitous descent, this time the run continued. Day after day Bitcoin has set new records, alternating them with retracements, until reaching the current all-time high that (at the time of writing this article), is equal to $28,250 touched on December 27th.
After crossing the $28,000 mark, Bitcoin is looking for confirmation: this time the bubble must not burst. In 2021, Bitcoin is called to the toughest test: to prove that it is indeed digital gold.
