The Origin of Cryptocurrency

A cryptocurrency is a digital or virtual currency that is secured by cryptography and built on a decentralized peer-to-peer network or ledger called a blockchain. Cryptocurrencies are typically developed as code by teams who build mechanisms for issuance, often through a process, we refer to as bitcoin mining. The origin of cryptocurrency would not be complete without understanding the security protocol through which they operate, cryptography. Cryptography means secret writing, the ability to exchange messages that can only be read by the intended recipient. Cryptography is an essential part of blockchain technology and, therefore, is crucial for any cryptocurrency. Cryptography puts the crypto in cryptocurrency and has existed much longer than our digital age and has evolved like languages over the centuries. The pioneers of cryptocurrency all had one thing in common, expertise in cryptography. The idea behind cryptocurrencies first showed up in the 1980s as a theoretical construct, more of cutting-edge mathematics and computer science than actual digital currency. The earliest recorded bearer of this idea was David Chaum an American cryptographer who invented a blinding algorithm that remains central to modern web-based encryption … 15 years later, Wei Dai, an accomplished software engineer published a white paper on b-money, a virtual currency architecture that included many of the basic components of cryptocurrencies. The coin was intended to be an anonymous, distributed electronic cash system. Dai described the b-money as a scheme for a group of untraceable pseudonyms to pay each other with money and to enforce contracts amongst themselves without outside help. Bit gold came later and it combined different elements of cryptography and mining, it was the second official attempt at creating a decentralized virtual currency and was proposed by blockchain pioneer Nick Szabo in 1998. However, it was never launched and shouldn’t be confused with bitGold leaving the world with no cryptocurrency to enter the 2000s with, how tragic? 

The actual birth of cryptocurrency was on October 31st, 2008, when the first white paper was published. The first digital currency, Bitcoin, was invented by an anonymous developer or group of developers who go by the name Satoshi Nakamoto. The use of this currency began in 2009 when its implementation was released as an open-source software. Bitcoins are created as a reward for a sophisticated process known as mining. The first bitcoin was traded on May 22nd, 2010, when Florida-based miner Laszlo Hanyecz spent 10,000 bitcoins at a local pizza restaurant for two boxes of pizza. Those two boxes would be the costliest boxes of pizza in today’s time if only he knew. 

In 2011, other cryptocurrencies based on Bitcoin’s open-source code started to emerge and were publicized as alternative cryptocurrencies, hence the reason for their name, altcoins. In this group were Namecoin and Litecoin. Namecoin was created with the idea of developing an uncensored naming system so that miners don’t just get coins but also a few domain names. As digital currencies gained traction, so did their popularity, as other currencies based on the same blockchain technology were released.

Fast forward to 2015 when the best-known altcoin, Ethereum, launched. Ethereum focused on an open-source platform that uses blockchains for decentralized applications, and the currency used by the developers is a token called ether. Ethereum was initially described in a white paper by Vitalik Buterin, a programmer and co-founder of Bitcoin Magazine. At the time of Ethereum’s launch, bitcoin was traded at around 315 dollars per coin and ethereum entered the market, trading at 1.25 dollars per coin. After the launch of Ethereum in 2015, there were many more cryptocurrencies like the Ethereum Classic, Nano, Tether, Bitcoin Cash, Tron, Shiba Inu, and a whole lot more. Currently, there are over 15,000 cryptocurrencies, with many more finding their way into the digital currency market. 

However, there’s no sector where every product is successful and it has proved the same for cryptocurrencies. The Coinye, originally named Coinye West was launched in 2014 but was forced to shut down after American hip-hop artist Kanye West filed a trademark lawsuit. They actually used Kanye West as their mascot…a big joke. Other inactive cryptocurrencies were either Ponzi schemes or they just died out.

Cryptocurrency is on an upward growth trend with a current market capitalization of 2.2 trillion dollars. To put this in perspective, the new york stock exchange, the biggest stock exchange worldwide which was founded 229 years ago with over 2400 stocks of companies including the FAANGs- Facebook, Amazon, Apple, Netflix, and Google has a market capitalization of 26.2 trillion dollars. Cryptocurrency is a growing market and has much more potential to explore. Cryptocurrency is not a crazy meme for nerds on the internet, we have a history and a future. If you want to explore more just use https://thebitcoincode.io/ for better profits.