The First Bitcoin Exchanges of 2010: Bitcoin Market and Mt. Gox

The first exchange where buyers and sellers set the price against each other was Bitcoin Market, built by Bitcointalk user dwdollar. Trading began on 17 March 2010. Four months later, on 18 July 2010, Jed McCaleb launched Mt. Gox. Before them, the only way to swap bitcoin for dollars was NewLibertyStandard's posted rate, a single operator settling by hand over PayPal.

This post covers the 2010 step from that one-desk model to a real order book, and why it mattered just before Pizza Day.

The 2010 exchanges at a glance

Date	Event
5 Oct 2009	NewLibertyStandard publishes the first known rate, $1 = 1,309.03 BTC (OTC, PayPal)
15 Jan 2010	dwdollar announces he is building an exchange on Bitcointalk
6 Feb 2010	Early demo with play money (10 "phoney" dollars and 10,000 "phoney" bitcoins per user)
16 Mar 2010	dwdollar posts a bid for 500 BTC at $0.0067 per coin
17 Mar 2010	Trading begins on Bitcoin Market (per the Bitcoin Wiki)
18 May 2010	Laszlo Hanyecz asks for pizza in exchange for 10,000 BTC
18 Jul 2010	Mt. Gox launches; announced on Bitcointalk that day
10 Oct 2010	Mt. Gox switches its main funding method from PayPal to Liberty Reserve after chargeback fraud

Before 2010: one desk, one rate

The first dollar price for bitcoin came from NewLibertyStandard in October 2009. It was a posted rate, calculated from electricity cost, with deals arranged by hand and paid by PayPal. Useful, but not a market: nobody else could bid or offer. The full story is in our first Bitcoin price post.

Bitcoin Market: the first order book (Jan–Mar 2010)

On 15 January 2010, in his first post on the forum, dwdollar wrote: "I'm in the process of building an exchange... It will be a real market where people will be able to buy and sell Bitcoins with each other."

On 6 February 2010 he put up an early version, explaining his goal: "to create a market where Bitcoins are treated as a commodity... In theory, this will establish a real-time exchange rate so we will all have a clue what the current value of a Bitcoin is, compared to a dollar." Only limit orders worked, and testers got play money. Forum users quickly found flaws, including a password-storage problem, and he took the site down for a couple of days to fix it.

By 3 March he had added a price graph and pointed users to bitcoinmarket.com. On 16 March he posted that he had placed a bid for 500 bitcoins at $0.0067 each, which he believed matched NewLibertyStandard's current rate. The Bitcoin Wiki dates the start of trading to 17 March 2010. That same afternoon dwdollar wrote that four people had funded accounts and "we had our first real trade around noon."

Two things set it apart. It matched buyers with sellers rather than quoting a fixed price, and dwdollar said he would "only be a broker." Its own About page later claimed it was the first to offer a free-floating exchange rate and an escrow trading system. Cash moved through PayPal, which would later cause trouble: the Bitcoin Wiki records that Bitcoin Market stopped PayPal trading on 4 June 2011 because of fraud.

Pizza Day: why a market mattered

On 18 May 2010 Laszlo Hanyecz offered 10,000 BTC for pizza. One forum reply noted those coins could be sold for about $41 on Bitcoin Market. The deal closed on 22 May. With a market now publishing prices, a bitcoin could be compared with a dollar, which is part of why Pizza Day became the reference point it is. More on the person behind it: Laszlo Hanyecz.

Mt. Gox: 18 July 2010

Jed McCaleb read about Bitcoin on Slashdot in July 2010 and decided the community needed an exchange. On 18 July he posted on Bitcointalk: "I just put up a new bitcoin exchange. Please let me know what you think." The site, mtgox.com, ran on a domain he already owned.

The name was a leftover. He bought the domain in January 2007 for a planned trading site for the online card game Magic: The Gathering Online, hence "Magic: The Gathering Online eXchange." He has said the Bitcoin exchange code was completely different and he simply had the domain lying around.

Early reaction was mixed. Some forum users asked why they would switch from Bitcoin Market. McCaleb's answer: Mt. Gox was "always online, automated, the site is faster and on dedicated hosting and I think the interface is nicer." Early users also noted that Mt. Gox's price mechanism favoured buyers compared with Bitcoin Market's midpoint approach.

McCaleb ran the site for about eight months. On 6 March 2011 he announced it was changing owners, and it passed to Mark Karpelès ("MagicalTux"). Mt. Gox later became the biggest exchange before it collapsed in February 2014 — a story for another day.

What we are not claiming

Sources disagree on early volumes and price levels, and early trade records are thin. We leave out volume and ranking claims we cannot verify. The dates above come from the Bitcointalk posts themselves and the Bitcoin Wiki.

Where this sits on the timeline

• 3 Jan 2009 — genesis block, on our Genesis T-shirt
• 5 Oct 2009 — first dollar rate
• 17 Mar 2010 — Bitcoin Market starts trading
• 22 May 2010 — Pizza Day
• 18 Jul 2010 — Mt. Gox opens

The wider story is in our 2008–2010 timeline, and key dates live on the anniversaries calendar.