Basically, Cryptocurrency is digital money. and the coin name is Bitcoin. You can use it in the normal way but digitally. You can buy every good to give cryptocurrency. That’s why you should know the Brief History of Cryptocurrency.
What is Cryptocurrency? Introduction of Cryptocurrency
Cryptocurrencies have become all the rage over the last few, especially after the meteoric rise in the price of Bitcoin back in December 2017. It used to be that cryptocurrency investing was the realm of experts and savvy investors. But because of Bitcoin’s massive success and popularity after December 2017, things have changed. It has now expanded to include even the smallest and least experienced investors. Before going into the details of holding and cryptocurrencies in general, it would be very beneficial for you to get a glimpse of how cryptocurrencies became what they are now.
Brief History of Cryptocurrency
You should know the history of cryptocurrency. It all began in the 1990s when American cryptographer, David Chaum, created what was considered as the first kind of online money in the Netherlands: DigiCash. He created DigiCash as an extension of an encryption algorithm that was considered popular during those times, which was RSA. The technology he created, together with its eCash product, was able to generate a huge amount of attention from the media. It became so popular that Microsoft Corporation tried to buy DigiCash for $180 million with the intention of placing DigiCash on every computer in the world that ran on the Windows operating system. One of the crucial mistakes Chaum and his company made was to reject Microsoft’s $180 million offer and earn the ire of De Nederlandsche Bank (Netherland’s Central Bank), which was the Netherland’s primary monetary authority. All of those crucial mistakes eventually led to the demise of DigiCash in1998, when the company went bankrupt.
The second generation of Internet money was borne from the learning experiences of DigiCash. Companies from this generation came up with alternative payment solutions and money systems that were also Internet-based but with small but important changes. Of these companies, the clear winner was PayPal. The reason why PayPal trumped its competition was its ability to give users what they really wanted in the first place, which was money on the web browser platforms they were already familiar with. PayPal – unlike its peers back in the day – was able to give its users the ability to transfer money to and from merchants and buyers, respectively, using a seamless peer-to-peer money transfer system. PayPal’s massive success is very obvious by the fact that next only to credit cards, it’s the most popular means by which to transact online.
But wait – there’s more! PayPal’s success led to other companies emulating it. One of the systems that tried to walk on the same path as PayPal was e-Gold. Unlike PayPal, its primary currency was gold, i.e., it received physical gold as deposits from its users and in return, it issued e-Gold or gold credits. E-Gold was able to manage a relatively healthy amount of cross-border transactions using gold. But because of the prevalence of fraudulent investment scams like Ponzi schemes, e-Gold was closed.
The next significant event in the history of cryptocurrencies is the 2008 subprime mortgage crisis that nearly crippled the financial system of the United States and affected many of the world’s major financial institutions. This event served as some kind of wake-up call to many of the world’s major economies and has led to the emergence of what is now popularly known as the blockchain, which is the foundation of cryptocurrencies today as we know them.
In 2009, an anonymous person (or group) that went by the identity of Satoshi Nakamoto published a white paper that expounded, among other things, the source code, technology, and concept of what is now called the blockchain. And together with the blockchain, he launched the granddaddy of all cryptocurrencies as we know it; Bitcoin. The blockchain, while not an earthshattering, disruptive, or incremental technology, was considered a foundational one. Why foundational? It’s because it was meant to – and it still does – serve as a bedrock upon other data network storage technologies that can be built. The blockchain naturally challenges all the conventional online data management protocols of that time, which included the centralization of data.
Today, there are more than 16 million units of Bitcoin that are circulating in the digital financial system and these have a total market capitalization of around $50 billion. More importantly, Bitcoin’s already garnering increasing acceptance and support from both the I.T. and business communities alike. As part of its gradual integration into the financial mainstream, some economic powerhouse countries like Australia, Canada, and Japan have already begun regulating Bitcoins through tax and legal measures.
Since 2009, the growth in the popularity of the blockchain and Bitcoins has surged. This surge in popularity gave birth to other cryptocurrencies, which are referred to as altcoins or alternative coins to Bitcoin. Today, there are more than 850 cryptocurrencies in the digital financial system being transacted internationally, which include Ethereum (Ether), Ripple, Litecoin, Monero, and Stratis. And if you combine the total market capitalization of all altcoins with that of Bitcoin, the result would exceed $100 billion.
Because of the massive expansion of cryptocurrencies, it appears that cryptocurrencies have created an entirely new and global industry. Because of the massive advances in blockchain technology, as evidenced by the growth in the number of cryptocurrencies on the market today, newly developed apps that will be created upon blockchain technology will naturally use cryptocurrencies. And as more and more cryptocurrency platforms and exchanges start to emerge, more and more people will be able to use blockchain-based apps, which in turn will make the latter industry grow even more.
When talking about the history of cryptocurrency, a discussion of the second biggest and most established cryptocurrency – Ethereum – can’t be ignored. Ether – as it’s more commonly referred to – is an open-source blockchain platform that features among others, a collection of programming languages upon which other blockchain apps can be built (Decentralized Apps), the Ethereum Virtual Machine, and smart contracts
Ether’s a relatively young altcoin compared to most other major ones, having been created only in late 2013, by a dude named Vitalik Buterin and publicly launched in July 2015. But considering its relatively young age, Ether has been able to garner unmatched support from the business, consumer, and developer communities because of the massive promise it has shown. Its market capitalization has already exceeded $30 billion and because of its open-source nature, Ether has made it possible for a lot of startup companies to create their own cryptocurrencies on its platform. And Ether’s popularity is expected to increase even more because of its trademark Enterprise Ethereum Alliance (a group of international and cutting-edge businesses that both use and assist the Ethereum platform), its technological advantage over all other blockchain platforms, its relatively huge developer community, and its relatively easy development.
The Future of Cryptocurrencies
One of the main motivations that fuel the development of cryptocurrencies is the breaking down of existing financial and technological barriers and borders, particularly in the realm of trade and finance. More than 1,000 altcoins are vying with each other in terms of early blockchain developmental stages. As a result, we can reasonably expect to see only a couple of successful cryptocurrencies stay and change the way we will pay, lend money, borrow money, trade, and do banking in the future. And in the near future, we can reasonably expect several major cryptocurrencies to be accepted in the financial mainstream, which can signal a whole new era of digital finance.
Copyright 2018 – All rights reserved to Martin Quest