The Bitcoin Story · Module 5 · 2018 to 2022 · 35 min
From a long slump in 2018 to companies, a whole country and some very big failures, Bitcoin became part of the wider money conversation, and so did its risks.
What you will learn
Describe how companies and a country started to use Bitcoin.
Explain what the Lightning Network is trying to do.
Say why the failures of 2022 were about companies, not about the Bitcoin software itself.
The lessons
Lesson 1: Crypto winter and the Lightning Network
After the 2017 peak came a long slump nicknamed the crypto winter. The price bottomed near $3,200 in December 2018 while many projects shut down.
While prices were low, developers kept building. The Lightning Network, which went live on Bitcoin’s main network in 2018, is a second layer on top of Bitcoin. Two people open a channel, make many quick payments between them, and only the final result is written to the main chain. This aims to make small payments faster and cheaper.
Lightning is still a work in progress, with trade-offs of its own, so treat its claims with the same care as any other.
Remember: Quiet years can be when the foundations are built.
Lesson 2: Companies and countries
The third halving took place on 11 May 2020, cutting the reward to 6.25 bitcoin. A few months later, in August 2020, the software company MicroStrategy began holding bitcoin as a company asset, and other public companies followed.
On 7 September 2021 El Salvador became the first country to make Bitcoin legal tender, and at first its law required businesses to accept it. The decision was debated heavily, both inside the country and abroad. In early 2025, under a loan agreement with the International Monetary Fund, El Salvador changed the law so that private businesses can choose whether to accept bitcoin, and taxes can no longer be paid with it.
These steps show that Bitcoin moved from a hobby into the wider money conversation. They do not show that any of these choices was right for everyone.
Remember: Bitcoin became part of the wider money conversation, and not everyone agreed it should be.
Lesson 3: Peak and crash
In November 2021 the Taproot upgrade activated, improving privacy and flexibility, and the price reached a record near $69,000.
Then 2022 brought a string of failures. In May the Terra and Luna coins collapsed, wiping out huge sums. Lending firms such as Celsius failed. In November the exchange FTX failed, and the price fell to about $15,500.
These were failures of companies and of risky promises, not of the Bitcoin software, which kept running without a break. The lesson matches Mt. Gox: be careful who you trust with your coins, and be wary of any promise of steady high returns.
Remember: In 2022 the software worked as designed. What failed was trust in companies.
Key dates
When
What happened
Why it matters
December 2018
The price falls to about $3,200
The end of the long slump after 2017
2018
The Lightning Network goes live on Bitcoin’s main network
A layer built on top for quick, low-cost payments
11 May 2020
The third halving: the reward falls from 12.5 to 6.25 bitcoin
Another slowdown in new coins
August 2020
The software company MicroStrategy begins holding bitcoin as a company asset
One of the first public companies to do so
7 September 2021
El Salvador makes Bitcoin legal tender
The first country to do so
Early 2025
El Salvador makes bitcoin acceptance voluntary for private businesses, under an IMF loan agreement
Shows that a legal rule can be changed as well as made
November 2021
Taproot upgrade activates; the price peaks near $69,000
Better privacy and flexibility, and a new record
May 2022
The Terra and Luna coins collapse
Wiped out huge sums and shook confidence
November 2022
The FTX exchange fails; the price falls to about $15,500
A lesson in the risk of trusting one company with your coins
Key terms: Lightning Network, legal tender, stablecoin, bankruptcy, layer. Open the glossary
Module quiz
4 questions. Tap an answer to see if you are right and why.
1. What does the Lightning Network try to do?
It is a second layer on top of Bitcoin for quick, low-cost payments.
2. What was new about El Salvador’s decision in 2021?
On 7 September 2021 it became the first country to do so.
3. What did the FTX collapse mostly show?
The software kept running; trust in a company failed.
4. What was the third halving’s date and new reward?
The third halving was on 11 May 2020 and cut the reward to 6.25 bitcoin.
Do it yourself
Look up what the Central Bank of Trinidad and Tobago has published about crypto assets. Write down one warning or rule you find, and the date of the notice.
Not financial advice. This lesson is history and education only. Prices are rounded and shown only to explain how big the swings were.