From bitcoin hitting $1 trillion in market value to Elon Musk’s dogecoin tweets: 12 key crypto moments from 2021

It has been a record year for the cryptocurrency market, which briefly exceeded $ 3 billion in value in November. Bitcoin, the largest cryptocurrency by market value, and ether, the second largest, reached all-time highs, while altcoins, like meme-inspired dogecoin, increased in popularity.

Other digital resources, I like it non-fungible or NFT tokens, sold for millions of dollars along with fine arts in major auction houses like Sotheby's Y Christie. In addition to art, the NFTs that represent assets in the game and digital land it also skyrocketed in value.

Blockchain-based applications, including decentralized finance, or DeFi, sparked the interest of retail and institutional investors, driving the growth of Web3, which is the decentralized iteration of the internet based on blockchain technology that powers NFTs and underpins cryptocurrencies.

All of this helped propel the cryptocurrency into the mainstream in 2021.

Although there were countless defining moments this year, here are 12 highlights.

In June, El Salvador passed a new law adopt bitcoin as legal tender, becoming the first country to do so.

The law allows Bitcoin to be used as payment for goods and taxes in El Salvador. Businesses can price their products in bitcoins and exchanges will not be subject to capital gains tax, CNBC reported.

In August, a Major upgrade to Ethereum went live. The update, called London, included the Ethereum upgrade proposal (EIP) 1559, which changed the way transaction fees or "gas fees" are estimated. Too ether supply reduction began.

Also, Ethereum developers ready for the next network change still proof of stake model through a series of updates throughout the year.

Ethereum currently operates on a work test model, where miners must compete to solve complex puzzles in order to validate transactions. This model receives a lot of criticism for its environmental impact, as it requires an extreme amount of computing power.

In 2022, Ethereum plans to switch to a proof of stake model, where users can only validate transactions according to the number of coins they have, rather than the energy-intensive mining rigs that are used now. This move is part of the merger for Ethereum 2.0 or Eth2.

Eth2 will be hugely shockingas it will change the Ethereum infrastructure and ultimately make mining obsolete.

In August, DeFi The Poly Network platform was hacked. Initially, more than $ 600 million it was stolen.

Experts said the hacker was able to exploit a problem within the network code. Although the hacker finally returned the stolen funds, it was one of the biggest crypto thefts in history.

This type of fraud was not uncommon throughout the year. More than $ 7.7 billion was stolen in cryptocurrency scams around the world in 2021, according to a report by blockchain analytics firm Chainalysis. That's an 81% increase compared to 2020.

Carpet pulls, a type of scam in which developers abandon a project and walk away with investor funds, became the "go-to scam" of the DeFi ecosystem, Chainalysis wrote in its report. In 2021, carpet pulls accounted for more than $ 2.8 billion stolen, or 37% of all revenue from cryptocurrency scams, compared to 1% in 2020.

In September, the People's Bank of China confirmed its continued crackdown on cryptocurrencies.

According to a question and answer session on your website, the PBOC said that all activities related to cryptocurrencies are illegal in China, including services such as digital asset trading, order reconciliation, token issuance, and derivatives. Furthermore, overseas crypto exchanges providing services in mainland China are also illegal, the People's Bank of China said.

Renewed repression of China in bitcoin mining throughout the year pushed the market elsewhere, and in October, data from Cambridge University showed that the US became the number one destination for bitcoin miners.

The data stated that 35.4% of the bitcoin hashrate, which is the collective computing power of all miners, was in the US in July, overtaking China for the first time. Cambridge also found that China's average monthly share of the global hashrate in July zeroed out, which was a major change from September 2020, when China captured around 67% of the market.

In October, ProShares Futures-based bitcoin ETF made its market debut on the New York Stock Exchange under the ticker symbol "BITO."

The bitcoin futures ETF track contracts that speculate on future price of the digital asset, rather than the current or "spot" price of the cryptocurrency itself. As a result, the ETF and bitcoin prices don't necessarily match.

Nonetheless, the ProShares bitcoin futures ETF saw one of the "largest early days on record for ETFs." CNBC reported.

Principal root, a long awaited upgrade to bitcoin, came into force in November. It was the first major bitcoin update since 2017.

Taproot introduced what's called Schnorr signatures, which help make bitcoin transactions more private, efficient, and less expensive. Most importantly, the update allows bitcoin to run better smart contracts, or collections of code that carry out a set of instructions on the blockchain.

Securities and Exchange Commission (SEC) Chairman Gary Gensler was outspoken in his lobby for a regulatory framework for the cryptocurrency space. Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen repeatedly warned against cryptocurrencies, particularly stable coins, calling the entire volatile asset class Y speculative.

In November, President Joe Biden signed the bipartisan infrastructure bill. in law, which includes tax reporting provisions that apply to digital assets such as cryptocurrencies and NFT.

Cryptocurrency "brokers," which are primarily exchanges, will need to issue a 1099-like form that reveals who their clients are. Businesses and exchanges will also need to report whenever they receive more than $ 10,000 in cryptocurrency.

Is sparked an eruption of concern from the cryptocurrency community, and many lobbyists emerged, pushing for more clarity in the definition of "corridor".

As Ethereum demand, the most used blockchain network, rebounded this year, other projects emerged in an attempt to compete.

Two include avalanche Y Solarium, both launched in 2020 as platforms for smart contracts and the creation of decentralized applications. Each of its tokens, AVAX and SOL, respectively, jumped into the top 10 cryptocurrencies and gained market share among the rest.

As a result of competitors like these, the total locked value (TVL) in DeFi increased seven times year after year, exceeding $ 200 billionDappRadar reported. But nevertheless, almost 60% of the TVL still remains on Ethereum.