It is not hard to see why cryptocurrencies are becoming more popular, especially now that their value is increasing. People are learning about the currency and looking for ways to invest or use it as payment. While the currency is still relatively new, here is a blog that covers some of the history of cryptocurrency, how exchanges work, and different types of wallets you can use.
The Origins of Cryptocurrency
Bitcoin was the first cryptocurrency to gain widespread recognition. However, its origins date back to 1998 when Wei Dai published a description for “b-money”. Several years later, Nick Szabo described “bit gold”, which was similar in concept but involved cryptographic mining to create coins.
In 2008, Satoshi Nakamoto released a paper describing a peer-to-peer electronic cash system. He implemented this idea in 2009 by developing Bitcoin. Since then, many other cryptocurrencies have been created.
Cryptocurrencies have experienced a meteoric rise in popularity, but like any new technology, they have a long way to go. This article will explore the history of cryptocurrencies, exchanges and wallets, and how they differ from fiat currencies.
The Origin of Cryptocurrency
Cryptocurrencies are decentralized, digital currencies that can be exchanged peer-to-peer. They use cryptography to secure transactions, control the creation of new units, and verify the transfer of assets. The first cryptocurrency was Bitcoin, which was created in 2009 by a pseudonymous developer named Satoshi Nakamoto. Since then, thousands of alternative cryptocurrencies (altcoins) have been created. Today we’ll look at some of the most common types of cryptocurrency.
Bitcoin
Bitcoin is a decentralized digital currency that uses blockchain technology for record keeping. It was created in 2009 by an anonymous developer called Satoshi Nakamoto and its value is determined by how many people are using it and how much other people are willing to pay for it.
Ethereum
Ethereum is a decentralized platform for applications that run exactly as programmed without any chance of fraud or third party interference. It is a public distributed ledger based on blockchain technology that runs smart contracts: applications that run exactly as programmed without downtime or third party interference. The Ethereum Foundation
The idea of digital currency can be traced back to the 1980s, when cryptography and computer science genius David Chaum invented eCash. Chaum is also credited with inventing blind signatures, which allow for untraceable digital transactions.
Blind signatures lay the groundwork for Chaum’s development of DigiCash, which was founded in 1990. DigiCash was a company that developed some of the first protocols for anonymous electronic money transfers. The company filed for bankruptcy in 1998, after failing to gain enough traction in the marketplace. The technology that they introduced would live on, though, and ultimately influence the development of Bitcoin.
In 1998, a paper written by Wei Dai titled “B-Money” first introduced the idea of a decentralized cryptocurrency system controlled by its users. Dai’s work heavily inspired Nick Szabo’s development of Bit Gold, sometimes referred to as the precursor to Bitcoin.
Szabo’s system wasn’t implemented until 2008, when Bitcoin was released. But Bit Gold shares many similarities with Bitcoin: it was decentralized to avoid double spending and fraud, it relied on proof of work for mining new coins and it used a peer-to-peer network based around cryptographic operations.
Bitcoin has been a hot topic of interest within the cryptocurrency community since Satoshi Nakamoto released it to the world in 2009. It has changed the way we look at currency and even the way it is valued by investors.
A Brief History:
The emergence of Bitcoin came with the global financial crisis in 2008 and 2009. This caused a lot of people to lose faith in financial institutions, leading to a need for alternative currencies. In October 2008, a paper was published under the pseudonym Satoshi Nakamota that discussed Bitcoins and how they would work.
In January 2009, the first block (the Genesis Block) was mined and subsequently released to the public. In March 2010, BitcoinMarket.com became the first ever exchange on which people could trade Bitcoins and US dollars. The price was $0.003 per bitcoin and by early April had reached $0.01 per bitcoin, making an ROI of over 3000%!
A cryptocurrency is a digital asset designed to work as a medium of exchange using cryptography to secure the transactions and to control the creation of additional units of the currency. Cryptocurrencies are classified as a subset of digital currencies and are also classified as a subset of alternative currencies and virtual currencies.
Bitcoin, first released as open-source software in 2009, is generally considered the first decentralized cryptocurrency. Since the release of bitcoin, over 4,000 altcoins (alternative variants of bitcoin, or other cryptocurrencies) have been created.
Bitcoin, the first cryptocurrency ever created has indeed become the most widely used digital currency on earth. Ever since the existence of Bitcoin in 2009, it has witnessed unprecedented growth across the world. The reason for its worldwide acceptance is no other than its ability to changed the way transactions are conducted in many electronic platforms. Conventionally, electronic card transactions take approximately three business days to get confirmation. On the other hand, Bitcoin transactions take few minutes to be confirmed on the blockchain.
Bitcoin began to see an increase in popularity in China late last year as its price surged to record highs. With increased adoption, there was a growing need for increased capacity as well as access to cryptocurrencies beyond bitcoin and litecoin. So in 2013, a new cryptocurrency was created and named after Doge, an internet meme that involved an image of a Shibu Inu dog which became popular in November 2013.
Dogecoin is based on Litecoin so they have much of the same features. However, one of Dogecoin’s unique features is that it only produces 100 billion coins and after that there will be no new coins produced (compared to Bitcoin’s 21 million limit). Another difference between Dogecoin and Bitcoin is that Dogecoin has a faster block time (1
The first cryptocurrency, Bitcoin, was created in early 2009. Since then, numerous cryptocurrencies have been created. These are frequently called altcoins, as a blend of bitcoin alternative. Bitcoin and its derivatives use decentralized control as opposed to centralized electronic money/centralized banking systems. The decentralized control is related to the use of bitcoin’s blockchain transaction database in the role of a distributed ledger.
Many altcoins have been created since then. In 2012, an incubator for bitcoin-focused start-ups was founded by Adam Draper, with financing help from his father, venture capitalist Tim Draper, one of the largest bitcoin holders after winning an auction of 30,000 bitcoins,[146] at the time called “mystery buyer”.[147] The company’s goal is to fund 100 bitcoin businesses within 2–3 years with $10,000 to $20,000 for a 6% stake.[146] Investors also invest in bitcoin mining.[148] According to a 2015 study by Paolo Tasca, bitcoin startups raised almost $1 billion in three years (Q1 2012 – Q1 2015).[149]
Bitcoin exchanges are entirely digital and, as with any virtual system, are at risk from hackers, malware and operational glitches. If a thief gains access to a Bitcoin owner’s computer