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A closer look at the history of cryptocurrency

Cryptocurrency has gained such widespread popularity in recent years that it’s easy to forget that traces of it can be found long before its growth over the last decade. 

Although it has become nearly synonymous with Bitcoin, which was launched in 2009, attempts at establishing cryptocurrency go back two decades before that. Let’s take a closer look at the history of cryptocurrency from its conception up to its present state here at Casino Days India!

History of Cryptocurrency

With so much that can happen within the decades that have passed, we’ll go over the significant events that contributed to the advancement and popularity of the cryptocurrency market:

1980: The first attempt to establish cryptocurrency

Long before Bitcoin came to fruition, there was one significant attempt at creating a decentralized digital payment system. This came in the form of DigiCash, developed by American cryptographer and computer scientist David Chaum. 

It was founded during the late 1980s after Chaum’s paper about the idea of an anonymous electronic payment system was published in an academic journal. At the time, it was entitled, ‘Blind Signatures for Untraceable Payments’, which introduces the idea of mathematically encrypted payments. 

The paper Chaum wrote discusses an electronic payment system that utilises cryptographic protocols to enable anonymity and transparency. However, at the time, blockchain technology was not available so DigiCash would rely on banks to execute transactions.

1990 – 1998: The short run of DigiCash

Chaum launched his company named DigiCash in 1990 and developed electronic cash in 1993 called ‘Cyberbucks’, which met the need for anonymous payment methods over the internet. Several companies like Microsoft and Netscape made offers to purchase rights for integrations with DigiCash, however, both offers were withdrawn. 

The downfall of DigiCash happened due to Chaum’s lack of management prowess and extreme mistrust of his employees. Whatever the reason may be, Chaum ended up leaving the company in 1996, which subsequently filed for bankruptcy in 1998. 

2008: The introduction of Bitcoin

Although now a household name, Bitcoin was first introduced through a white paper titled ‘Bitcoin: A Peer-to-Peer Electronic Cash System’ on a crypto mailing list.

The author of the article was named ‘Satoshi Nakamoto,’ whose identity remains anonymous up to this day. In the white paper, it outlined the need for a decentralized currency devoid of government control or any third-party intermediaries, which is exactly what Bitcoin stands for to this day.

2009: Bitcoin’s launch

Shortly after the release of the paper, Bitcoin was officially released as open-source software in 2009. It was first used by Nakamoto when he mined the first-ever Bitcoin. The starting block of the blockchain is known today as the “‘genesis block”. 

Shortly after that, Nakamoto sent 10 BTC to Hal Finney, who was among the first contributors to Bitcoin, which marked the first-ever transaction of Bitcoin.

2010: Cryptocurrency and its real-world value

The first real-world Bitcoin transaction was made by Laszlo Hanyecz on May 22, 2010. He had done it to purchase two pies from Papa John’s. At the time, that amount was valued around $30. However, 10,000 BTC today is valued at nearly 300 million USD. Thanks to the historic transaction, May 22, is now known as ‘pizza day’

2011 – 2014: The entry and subsequent rise of altcoins

Alternative currencies to Bitcoin or altcoins began to appear in the market in 2011. Among the first altcoins are Namecoin and Litecoin, with the initial goal to improve upon the limitations of Bitcoin at the time.

2014 – 2016: A period of scams

While a decentralized system and the guarantee of maintaining anonymity when making financial transactions was a welcomed alternative to traditional banking, it is nonetheless susceptible to exploitation. With the market still so new, criminals found several ways to hack and steal crypto coins.

To name a particular incident, in 2014, a Bitcoin exchange called Mt. Gox was hacked and Bitcoins amounting to 860,000 was stolen. This resulted in the exchange closing down soon after.

2016: The launch of Ethereum

Although Bitcoin remains the largest cryptocurrency today, one of the altcoins that have grown just as popular is Ethereum. It was launched by inventor Vitalik Buterin and it offers more than just cryptocurrency trade. Aside from Ethereum’s cryptocurrency, called Ether, it also has smart contracts and virtual machines called the Ethereum Virtual Machine or EVM.

2017: Bitcoin’s surge in prices

Over the years the prices of Bitcoin increased slowly, reaching $900 in 2016. At the start of 2017, it averaged around $1,000 until skyrocketing to $20,000 later in the same year. This growth was spurred by mainstream entities such as investors, economists, scientists, and governments taking notice of cryptocurrency. 

2019 onwards:  Mainstream rise of cryptocurrencies

The boom of Bitcoin prices carried with it newfound popularity for cryptocurrency as a whole among investors and in popular culture. It continued through 2020, which was largely due to people all over the world largely operating online due to the pandemic.

2021 is the biggest year for crypto. Bitcoin hit several markers in the increase of its prices. Ethereum, the second most popular crypto, also gained widespread popularity for improving security, speed and efficiency through its smart contracts and other services when it launched Ethereum 2.0. Many big companies began to buy into Ethereum in recent years such as Amazon, Walmart, and IBM.

Blockchain, which is a technology many of the biggest cryptocurrencies use as a digital ledger to record transactions has also been adopted by other industries to improve data security.

What does the history of cryptocurrency tell us?

At the hands of the right people, cryptocurrency rose in recent years to become a viable alternative to traditional banking. The idea of a decentralized financial system is being embraced by more people who are looking for a secure and seamless way to handle their online transactions.

Although there are still kinks to work out regarding cryptocurrency as an industry, particularly its volatile nature, it is clear that crypto is only just beginning to change the world.

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