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Bitcoin’s Biggest Headlines in 2016

Last Updated March 4, 2021 4:53 PM
Justin OConnell
Last Updated March 4, 2021 4:53 PM

2016 was yet another banner year for bitcoin, and as the year winds down it’s appearing increasingly likely that Bitcoin will end the year as one of the best performing assets, outdoing even the United States dollar, which has enjoyed massive gains.

In the spirit of end of the year articles, we wanted to boil down the year to the headlines of the headlines: the top 5 biggest Bitcoin events of 2016.

They aren’t always flattering for Bitcoin, but they in-and-of themselves draw a picture about the state of Bitcoin, and how popular perception sees the cryptocurrency released into the wild by a pseudonymous computer programmer Satoshi Nakamoto.

Australian Craig Wright Declares: ‘I am Satoshi’

One of the strangest episodes in the history of Bitcoin took place in Australia this year, with Craig Steven Wright, a mathematician and suspected tax evader, who claimed to be the founder of Bitcoin, Satoshi Nakamoto.

Not only did Mr. Wright bring major publications like Wired and Gizmodo along for a ride, but he convinced Bitcoin Core developers like Gavin Andressen, who had regular contact with Satoshi Nakamoto, that he was Satoshi Nakamoto, adding a new layer to the controversy.

Promising proof, which many assumed would be cryptographic proof, Mr. Wright backed out. In early May, he posted on his blog:

I believed that I could do this. I believed that I could put the years of anonymity and hiding behind me. But, as the events of this week unfolded and I prepared to publish the proof of access to the earliest keys, I broke. I do not have the courage. I cannot. When the rumours began, my qualifications and character were attacked. When those allegations were proven false, new allegations have already begun. I know now that I am not strong enough for this. I know that this weakness will cause great damage to those that have supported me, and particularly to Jon Matonis and Gavin Andresen. I can only hope that their honour and credibility is not irreparably tainted by my actions. They were not deceived, but I know that the world will never believe that now. I can only say I’m sorry. And goodbye.

He has since entirely faded from the spotlight…for now.

Bitfinex hack

Bitcoin hacks have become seemingly a part of the Bitcoin ecosystem fabric. In 2016, leading Bitcoin exchange suffered a crippling hack. Over $60 million was stolen, representing the largest loss of bitcoins by a cryptocurrency exchange since Mt. Gox lost about $350 million worth of bitcoins in 2014.

In the hours after Bitfinex’s announcement, users took to Bitcoin social forums to declare their Bitfinex accounts had been totally drained.

The Bitcoin price declined 22% on news of hack.

IRS Sends Coinbase John Doe Summons

The IRS shocked the cryptocurrency space when it sent a John Doe Summons to Coinbase. The sweeping request asked for records dating back to early 2013 through 2015.

Coinbase, by all indications a law abiding Silicon Valley tech firm, rebuked the request, pledging to fight the sweeping request in court.

Coinbase users by mid-December were filing federal lawsuits to block the IRS’ request from being granted.

The case originated in the Northern California U.S. District Court. The summons is after numerous persons who might have “failed to comply with provisions of the internal revenue laws.”

While Coinbase now offers trading of different cryptocurrencies on its platform, such as Ethereum, the John Doe Summons (a summons pertaining to unnamed parties) pertains specifically to Bitcoin users.

The Coinbase appeal is ongoing.

San Francisco Muni Hacker Demands Bitcoins

In late November, Bitcoin was thrust into the mainstream light once more when a Bay Area transportation system was hacked and Bitcoin’s were demanded by attackers.

In an event that underscores the state of cybersecurity in 2016, San Francisco’s Municipal Railway, Muni, was hacked , free rides were given to customers, and a 100 bitcoin ransom demand, which equals around $73,000, was requested. The Bitcoin ransom was not paid.

Over a weekend in late November, riders received free rides as the message, “You Hacked, ALL Data Encrypted. Contract For Key ([email protected]) ID:681, Enter.”, appeared on Muni agents computer screens. Ticket machines appeared to be out or order. “Metro Free” signs were placed in front of screens.

Muni conducted an ongoing investigation, with few facts arising about what appears to be a ransomware attack. Muni was locked out of its own system.

Swiss town starts accepting Bitcoin for government services

Residents of the Swiss town of Zug will soon pay for public services using the digital currency bitcoin, the city council announced in May 2016.

“This is the first time worldwide that bitcoins have been accepted as a currency on a state level,” said Niklas Nikolajsen, the chief executive and co-founder of Bitcoin Suisse, a start-up that sells and buys the cryptocurrency.

Mayor Dolfi Muller hopes the initiative will bring more fintech to the region: “We want to express our openness to new technologies…,” he said, adding that Zug is open to exchanging ideas with tech companies.

Zug has the lowest tax rates in the country. “Paying your taxes by bitcoin is no longer just a future dream but a realistic possibility,” Muller said. Earlier this month, Zug’s city council revealed that it would continue to accept bitcoin payments beyond the pilot project.

Image from Shutterstock.