The late 1980s was the first instance when the idea of crypto currency first emerged. The objective was to develop a currency that could have untraceable delivery. Also, the aim was to develop a currency that does not depend upon centralized institutes like banks.
An American cryptographer named David Chaum introduced Digicash, an anonymous electronic cryptographic money. Digicash is an initial form of the cryptographic payment window. This cryptographic payment strategy requires user software to withdraw from banks through particular keys of the respective owner.
In 1988, Nick Szabo developed Bit Gold, a direct precursor to the well-known Bitcoin. With Bit Gold, users must have a dedicated computer to solve cryptocurrency puzzles. People who successfully solved the puzzles received rewards for the same.
Both the concepts of Chaum’s and Szabo’s if put together give rise to something close to today’s Bitcoin.
What was the formal beginning of crypto currency?
Satoshi Nakamoto introduced a white paper named Bitcoin on 31st October 2008. He published Bitcoin and described its function as ‘ A Peer to Peer Electronic Cash System.‘ The formal date when Satoshi Nakamoto began his work on Bitcoin was 18th August 2008. It. was when he purchased the Bitcoin.org website.
In 2009, on 3rd January, Satoshi Nakamoto mined and introduced the initial block of the Bitcoin network. The development of new Bitcoin blocks made headlines in The Times newspaper. Today, the initial 50 blocks of Bitcoin are credited as the Genesis Block. In the initial days of its origin, Bitcoin did not have much value and credibility among people. Its value was only 14 cents, six months after people started Bitcoin trading in April 2010. In November, the value of Bitcoin rose to 36 cents.
The first Bitcoin trading transaction was between Hal Finney and Satoshi Nakamoto on 10th January 2009. Bitcoin could not establish its credibility until February 2009. Someone paid a total of 10,000 Bitcoins for only 2 pizzas. Today, Bitcoin trading is worth millions.
How did the Bitcoin market develop?
Bitcoin was the single existing cryptocurrency present in the market in early 2010. Bitcoin was worth not more than a few cents in its initial days. With years passing by, new cryptocurrencies got introduced into the market. People slowly found credibility in these new digital currencies. Over time, these currencies also saw a rise and fall in their values.
Compared to most investments, bitcoin “is a highly volatile, highly risky investment,” James Ledbetter, editor of fintech newsletter FIN.
Soon after its establishment, Bitcoin went through a period of volatility. During this time, people slowly lost their faith in cryptocurrencies. Nevertheless, cryptos saw unprecedented growth in late 2017. Later in January 2008, all cryptocurrencies saw a steep increase and reached $28 billion. However, later that year, the market crashed, unfortunately. Nevertheless, despite the crash, the digital currency market experienced steady growth.
The Period of Crypto currency Scams
The year 2017 is credited as ‘the year of cryptocurrency.’ However, with the increase in the value of Bitcoin and other digital coins, there was a downside to this success. Many scams and schemes targeted crypto investors.
The scams ranged from fake Initial Coin Offerings (ICOs) to phishing attacks in the crypto market. The scammers were successfully able to steal millions of dollars from crypto investors and enthusiasts. This created a huge buzz in the industry which put shock waves throughout.
When did Bitcoin rise to popularity?
“It’s not like there’s something intrinsically unsafe about bitcoin itself– it’s more how people are handling or managing it,” Ledbetter says.
It is pretty difficult to declare when Bitcoin first gained popularity. However, it is a topic that is frequently discussed and debated. According to some people, Bitcoin rose to popularity in 2017. It was when its value rose from $10,000 to $20,000 soon after which it crashed. Its value fell below $10,000.
However, many counter this theory by proposing that Bitcoin gained popularity due to other cryptocurrencies like Coinbase. The induction of other digital currencies made it easier for people with limited technical knowledge or expertise to do crypto trading.
Either of the two reasons might be true. However, the important aspect here is that Bitcoin’s popularity is bound to grow among people. The number of people associated with cryptocurrency will likely increase when people understand its core concepts of decentralization and anonymity.
What are some Key Moments in the history of cryptocurrency?
- Silk Road Opens Its Doors
As per the history of cryptocurrency, in 2011, the Silk Road Chapter began for Bitcoin. The initiation was marked by the ‘Dark Web’ release related to the infamous Silk Road website. This website is popularly referred to as the ‘eBay of drugs.’ Everything illegal, from small purchases to big deals like contract murders, the dark web has it all!
Bitcoin was the easiest (and still is) mode of transaction on the Dark Web given its pseudonymous nature. More than a hundred million dollars have been traded concerning drugs, illegal items, etc for at least 3 years.
Due to illegal transactions and increased crime rate, the US authorities decided to shut down the Silk Road in October 2013. This decision led to the arrest of Ulbricht in June 2015. He was sentenced to life imprisonment for several offenses in the process of which he forfeited $183 million.
There is also a documentary available on the history of the Silk Road featuring its founder. It is chronicled as the ‘Deep Web’ by Alex Winter. The release was soon after the sentencing of Ulbricht in New York.
- BitPay Launches in May 2011
The spring of 2011 marked the largest merchant service provider in the history of Bitcoin. New innovative services like introducing the very first smartphone wallet came into existence. BitPay undertook several large partnerships with Bitcoin, including Newegg, WordPress, the St. Petersburg College Football Bowl, etc. When Bitpay signed these partnerships, it eventually created ‘The Bitcoin Bowl.’ Out of the 100k people who use Bitcoin, approximately 60k work with BitPay worldwide.
- Bitcoin “To the Moon” in late 2013
After its genesis, Bitcoin gained momentum and popularity in terms of USD in its initial first four years. However, Bitcoin realized a sudden increase in September 2013, from US$125 to US$1100 by the end of November.
This sudden rise can be subjected to many factors like the introduction of China exchanges and miners in this ecosystem. In addition, the uncertainty of cost management concerning the largest Bitcoin exchange of that time, Mt. Gox.
According to a source from coinmarketcap.com, the market value eventually went up to $13.5 billion from October to November 2013.
- Gox & Bitcoin Price Collapse
Even after establishing its credibility, the cryptocurrency suddenly had a hard battle to fight when it collapsed. Mt. Gox, which Jed McCaleb opened on 17th July 2010 experienced ill-management of funds, instability, lack of security, and so on. All these factors eventually culminated together, resulting in its collapse in February 2014. During this period of collapse, more than 850,000 were reported to be stolen by Mark Karpeles, who was later arrested in 2015.
- Microsoft accepts Bitcoin
On 11th December 2014, Microsoft officially announced they were ready to accept Bitcoin as a form of payment and transactions. The transactions were valid along with BitPay, the payment processor of Bitcoin. However, there was no press release before or during this entire process. After users and Microsoft started using Bitcoin as a payment method, the companies released a formal announcement.
“The use of digital currencies such as bitcoin, while not yet mainstream, is growing beyond the early enthusiasts. We expect this growth to continue and allowing people to use bitcoin to purchase our products and services now allows us to be at the front edge of that trend,” stated Microsoft in their press release.
- NASDAQ agrees to begin using Bitcoin’s Blockchain technology
The second-largest financial stock in the world, NASDAQ decided to start Bitcoin trials. These trials began on June 2424, 2015. NASDAQ partnered with API developer Chain to issue, catalog, and manage transactions of private shares using blockchain technology.
After NASDAQ agreed to start trials with Bitcoin, it increased blockchain technology’s perception, scope, and value. This agreement also inspired major financial bodies to start their crypto research.
The year 2015 officially marks the era when big commercial banks, venture capitalists, and payment providers like Visa began their share of investing in Bitcoin technology.
What makes cryptocurrency so important today?
There are approximately more than 2000 cryptocurrencies that exist as of January 2020. For instance, Bitcoin is a digital-based currency that is somewhat more popular. One of the several benefits of cryptocurrency is that they provide a safe passage of transactions between the seller and the buyer. In addition, it offers faster processing with low transaction fees.
This is why in recent years, hundreds of billion dollars have been circulating in the economy in new forms of currency. Today, several blockchain enthusiasts and investors believe in cryptocurrency and have taken a steady step toward it.
To Wrap Up
Using cryptocurrency brings in several incentives for both individuals and businesses worldwide. With its advent, businesses can also reach out to international markets. Despite its initial years of turmoil, cryptocurrency has been able to hold its ground and become a reliable asset.