History of Cryptocurrency

In the last 3 articles, we discussed basics of Cryptocurrencymining in Cryptocurrency and then Units and Storage of Cryptocurrency. In this article, we’ll learn about the history of Cryptocurrency. 

Despite the fact that ideas for the development of digital currencies appeared in the 80’s and 90’s of the XX century, they were realized in a full-fledged workable project only at the end of the “zero” years of the 21st century. The pioneer and leader among the crypto-currencies was and still is Bitcoin , the development of which, according to Satoshi Nakamoto, began back in 2007, and in 2008 materials were published describing algorithms and protocols for creating a crypto-currency network that and were realized by enthusiasts by the beginning of 2009.

This is not very well known fact, but the first attempts to create completely decentralized digital currencies were made in the early 80’s by American cryptographer David Schaum . A special look at money and the pursuit of privacy led him to the idea that in order to ensure safe trade, the economy needs symbolic money that will emulate cash: in particular, in terms of storage convenience, as well as fast and safe transactions without intermediaries. After the migration to the Netherlands, David Shaum tried to promote his project to a broad market, but, unfortunately, he and his company made some mistakes and everything collapsed.

So the first big wave of crypto-currency was drowned and died, and then the second one was born. Its canonical representatives include PayPal and Webmoney . But they, too, were not ideal. In particular, the mediation factor that interferes with payments directly has not been eliminated, and there is also a lot of control from the state, so the digital currencies (and their numerous analogues) have been replaced by digital money of a new, third wave – completely decentralized crypto-currencies, among them a pioneer and unconditional the leader is already known to all Bitcoin , created in 2008 by an anonymous developer ( or a group of individuals ) with the pseudonym ” Satoshi Nakamoto”.

History of Cryptocurrency
History of Cryptocurrency

The first year the process of introducing new technology was very slow, but by the end of spring 2010, it had started to accelerate significantly, due to the increase in the number of bitcoins, and thanks to the emergence of forums, exchanges, the formation of new teams of enthusiasts. On May 22, 2010, one of the most significant events in the history of BTC occurred – the first exchange of crypto-currencies for a real product (the purchase by American miner Laszlo Hanec of two pizzas with delivery for 10 thousand BTC, which, at that time, cost only about 50 dollars , but three years later, such a number of bitcoins cost about $ 11 million, and not much later – all $ 25 million).

Despite the fact that in 2011, the bitcoins already exceeded the price of $ 17, the history of rapid mega-enrichment did not stop, attracting more and more participants to this market.

So, in June 2011, on the MtGox stock exchange , a certain guy named Kevin , taking advantage of the fact that someone laid out a huge application for the sale of hundreds of thousands of bitcoins, thus dropping the market from $ 17.50 to $ 0.01 per BTC , was able to buy for almost $ 2613 almost 260 thousand BTC!

For many Bitcoins success became apparent as early as 2011, the year, and then, the team began to create other cryptocurrency ( there Litecoin, Namecoin, Ripple and others ). By the end of 2013, the first real boom came, when the prices for Bitcoin soared above $ 1000, and new crypto-currencies began to appear one after another.

However, the rapid rise followed the same sharp decline when, at the end of 2013 – early 2014, after the termination of the rally, the bankruptcy of MtGox and the departure of Michael Hearn from the crypto-currency industry, the price of bitcoin collapsed from more than $ 1,100 to $ 100 on some exchanges, pulling for themselves and the rest of the market. During the entire 2014 and the first half of 2015, the exchange rate was very unstable, until it settled around $ 220-250 by the end of summer 2015, after which it again began its gradual ascent. By the summer of 2016, it exceeded $ 750 , and by the end of the spring of 2017 it had reached $ 3,000 per bitcoin.

At the time of writing this article, I unit of Bitcoin is trading @ US$16,441.18 or 10,53,263.09 Indian Rupee

Other altcoyins (“alternative digital currencies”, the so-called all other crypto currencies other than BTC) also significantly increased their price, and the total market capitalization by the middle of 2017 exceeded 110 billion USD ( more than 44 of them account for bitcoin ).




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