The History of Cryptocurrencies, Mapped Out
Originally published on Visual Capitalist by Jeff Desjardins
As the price of bitcoin BTCUSD, +0.56% and other cryptocurrencies have skyrocketed in 2017 and drawn greater attention from mainstream investors, many people are wondering where this technology came from – and what its future may hold.
THE ROOTS OF CRYPTOCURRENCY: CYPHERPUNKS AND HASH CASHES
The first cryptocurrency was Bitcoin, created in 2009 by an anonymous group or person named Satoshi Nakamoto. The currency’s invention is generally considered to be one of the most important developments since the internet itself.
While cryptocurrencies like Bitcoin have garnered headlines for their explosive growth in recent months, it can be difficult to understand how this technology came about. Where did it all start? How did we get here? And where is it all going?
The infographic below serves as a visual guide for understanding the history of cryptocurrencies and how we got to where we are today. It starts with early precursors like hash cash and digicash in the late 1980s, and then moves into e-gold in 1996 and Bitcoin’s release in 2009. From there, you can follow along through the rise of alternative cryptocurrencies
Cryptocurrency’s history has been filled with ups and downs. Many have doubted the technology’s ability to survive, but it has proven its critics wrong time and again.
To better understand what the future holds for cryptocurrency, it’s helpful to take a look at the past. Here are some key events in cryptocurrency history, mapped out:
2009: Bitcoin is created by Satoshi Nakamoto
In early 2009, Nakamoto released the first software that launched the network and introduced bitcoins into circulation. According to Nakamoto’s design, bitcoins are created at a fixed rate, which is halved every four years until 2140.
This was not the first attempt at creating digital money. However, most previous attempts failed due to issues with trust, security or technical flaws. Bitcoin was different because it allowed users to transact directly. This eliminated the need for an intermediary and allowed transactions to be verified digitally.
Bitcoin caught on quickly after its release. By February 2011, one bitcoin was worth $1 USD, according to Bitcoin Magazine.
The First Mapping of Cryptocurrencies in the World
Back in 2014, the first map of cryptocurrencies was created. It showed how many active cryptocurrencies were out there, where they were based and who was behind them. The map was a simple affair, with just five names: Bitcoin, Litecoin, Dogecoin, MaxCoin and Darkcoin.
Fast forward four years to 2018 and this is what a map of the cryptocurrency landscape looks like:
It’s quite a different picture. There are now 1,568 different cryptocurrencies listed on CoinMarketCap.com, and that doesn’t include the countless others floating around in cyberspace. More than 400 of these have a market capitalization over $1 million dollars each and there are more than 300 with a market cap above $10 million dollars each. All up, the total market cap is an impressive – but volatile – $282 billion dollars.
The majority of active cryptocurrencies are still based in North America (31%), but Europe has edged ahead as being home to 28% of all active crypto markets today. And while the number of countries that host crypto projects has increased since 2014, it’s clear Australia is the top destination for crypto companies in 2018.
For most people, the term cryptocurrency makes them think of Bitcoin. That’s not a surprise, as Bitcoin is the most popular digital currency to date. But what most people don’t realize is that Bitcoin was not the first digital currency ever created.
In fact, there were several different attempts at digital currencies well before Satoshi Nakamoto published his famous white paper in October 2008. In this article, we’ll take a closer look at some of these early cryptocurrencies and the history of digital money.
B-Money
B-money was one of the earliest digital currencies ever created. It was invented by Wei Dai in 1998 and published on an internet mailing list devoted to cryptography. Dai was an inventor who worked on projects related to computer security and anonymity. B-money was a system that allowed users to send each other money anonymously and electronically. In addition, it also allowed users to create contracts with each other.
B-money never gained traction, but it did help inspire future cryptocurrencies like Bitcoin and Ethereum. More importantly, B-money’s code is still active today in several altcoins such as GridCoin, Peercoin, and Primecoin.
Bit Gold
Bit Gold was another failed attempt at creating a digital currency. It was invented by Nick Szabo in 1998 (
JPMorgan Chase & Co. CEO Jamie Dimon has a well-known dislike for bitcoin and other cryptocurrencies, but his bank is developing its own.
J.P. Morgan is leading a group of about half a dozen banks in discussions to create a new kind of payment system to send money around the world instantly, using blockchain technology and possibly its own cryptocurrency, The Wall Street Journal reports. The initiative will be led by Umar Farooq, the head of J.P. Morgan’s blockchain projects.
The banks are trying to create an alternative to Swift, the global interbank messaging system used by more than 11,000 financial institutions in more than 200 countries and territories that moves money between banks. The consortium, which includes Royal Bank of Canada and Australia and New Zealand Banking Group Ltd., aims to build a network of blockchain-based smart contracts that would complete and record international transactions within seconds, according to the Journal.
A cryptocurrency is a medium of exchange, like ordinary money, but designed with the aim of keeping the transactions private. Cryptocurrency uses cryptography to control creation and transfer of money. It is a decentralized digital currency. Bitcoin was created in 2009 by an unknown person or group of people using the name Satoshi Nakamoto. The currency started with 50 Bitcoins for each block mined and halves every four years to combat inflation.
The value of Bitcoins has gone up and down over the years since it was created in 2009 and some people don’t think it’s safe to turn your ‘real’ money into Bitcoins. Bitcoin has been a subject of scrutiny amid concerns that it can be used for illegal activities. A US government panel has said that digital currencies such as Bitcoin need to be monitored more closely to prevent money laundering and other crimes.
Bitcoin is a cryptocurrency, a type of electronic cash which can be spent peer-to-peer. It was launched in 2009 by an anonymous person or group known as Satoshi Nakamoto, pioneering a new technology called blockchain technology. Unlike a traditional information network, which stores information in a centralized location, blockchain networks are decentralized and store information across many different computers called nodes.
Blockchains are built around the concept of trustlessness and decentralization: we don’t
Since the dawn of time, man has always been searching for a way to transmit value from one person to another.
The first known transaction took place 9000 years ago in Mesopotamia, and it was a simple barter deal. A farmer traded his grain for some sheep.
It wasn’t until 500 B.C that banknotes were invented by the Chinese. They used rectangular pieces of wood with a promise written on them. They had to be taken to the issuer of the note if you wanted to redeem them for actual value.
At this point in time, money was still just an IOU (I owe you). It was still ultimately backed by something tangible or representable as such (sheep or grain).
It wasn’t until 1252 when we had our first true currency: the gold florin of Florence. This coin was minted with a 24 carat gold content which was so high that it couldn’t be counterfeited effectively.