It has been 10 years since the first cryptocurrency ‘Bitcoin‘ was created by Satoshi Nakamoto. Since its foundation, a lot has happened in the world of cryptocurrencies. Now you can find many platforms that offer big cryptocurrencies like Bitcoin, Ethereum, Ripple, Litecoin and so on. But first let us tell you some basic information.
What Is Cryptocurrency?
Cryptocurrency is called digital currency, which includes encryption techniques to regulate the production of currencies and validate currency transactions. Cryptocurrencies are decentralized and therefore operate independently without the involvement of governments or central banks. Cryptocurrencies doesn’t have a real value, such as fiat currencies or commodities like gold.
Basically, the cryptocurrency is a web-based exchange tool that includes cryptographic functions to perform financial transactions. Basically, cryptocurrencies use blockchain technology to achieve decentralization, invariance and transparency.
Cryptocurrency’s Historical Foundations
You should know that the concept of digital money is not new.There is several attempts to create one in history. The technical foundations of cryptocurrencies were goes back in the early 1980s by David Chaum (American Cryptographer), who invented the binding algorithm at the center of existing web-based encryption.
This blind algorithm allowed irreversible information and secure exchange between parties. This digital asset was known as “blind money” or “B-Money“.
Later, Chaum founded ‘DigiCash‘ to generate currencies using a blind algorithm. However, unlike Bitcoin and other cryptocurrencies, DigiCash was not decentralized, which allowed banks to use a monopoly on this digital currency, as in fiat currencies.
In 1998, Wei Dai who is a computer engineer published an article about ‘B-Money‘ where he discussed digital currency, which can be sent to many untraceable digital nicknames. However, this virtual currency can not be distributed as a means of exchange.
That same year, Nick Szabo who is a blockchain pioneer made another attempt to create a digital currency and called it ‘Bit Gold‘. Szabo’s idea was encouraged by the inefficiencies of traditional financial systems, such as creating coins and reducing third parties’ involvement in transactions. Similar to DigiCash, Bit Gold has not gained popularity and is no longer used.
First Cryptocurrency-Bitcoin
Bitcoin (BTC) is the first modern cryptocurrency invented in 2008 by the anonymous group called ’Satoshi Nakamoto’ in the white paper. In this white paper, the Bitcoin blockchain network and its functionality is described.
Back in 2009, Bitcoin was announced to the public for the first time. Which is basically a peer-to-peer electronic cash system. In 2010, Bitcoin gained pecuniary value when users started trading with mining.
Bitcoin is used as a means of exchange that combines user anonymity, decentralized control, and record keeping with blockchain.
Adoption of Cryptocurrency
Until 2011, rival cryptocurrencies like Altcoin emerged to improve the original Bitcoin design and increase its speed, anonymity, transparency and other advantages. Other cryptocurrencies that appeared after Bitcoin until 2013 were Litecoin and Ripple. Currently, there are more than 2000 cryptocurrencies in circulation.
Rise in the Cryptocurrency Market
In June 2011, Mt. Gox which is a Bitcoin exchange platform was attacked and about 2000 Bitcoin was stolen at about $30,000 worth can in then. Similarly, in 2013, after the Silk Road which is known dark website was closed, more than 26,000 Bitcoins were seized, causing Bitcoin prices to drop from $139 to $109.
After these crashes, a negative perception dominated Bitcoin. In the following years of 2014 and 2016, Bitcoin’s price dropped almost 50%.
In 2016, the Ethereum platform was developed with the local cryptocurrency Ether (ETH). Ethereum has gained traction due to the emergence of ICO (Starting Money Offers). These are fundraising platforms that offer investors the opportunity to trade cryptocurrencies. By 2017, the price of Bitcoin rised to $10,000 and has continued to grow slowly ever since.
