Cryptocurrency only existed as a theoretical construct way before the debut of the very first digital alternative currencies. Proponents of early cryptocurrency shared the aim of applying cutting edge computer science and mathematical principles. This was in a bid to solve perceived political and practical limitations of fiat currencies. Learn all about Exchanges here. If you don’t find what you need check the search.
These foundations go back to early 1980s, this was when David Chaum (American cryptographer) invented a unique blinding algorithm that is still central to modern encryption that is web-based. The algorithm allowed for unalterable and secure exchange of information between parties and this is what laid the groundwork for all future electronic currency transfers.
Chaum enlisted several other enthusiasts of cryptocurrency in the late 1980’s in a bid to commercialize the blinded money concept. He started DigiCash that generated currency units on the basis of the blinding algorithm. Initially, DigiCash directly dealt with people but this idea was quashed by the central bank of Netherlands that did not like it. DigiCash gave its accent to licensed banks of selling, a move that significantly curtailed its market potential. DigiCash was approached by Microsoft for a lucrative partnership to enable early users of Windows to purchase using its currency. The two never agreed and this led to the DigiCash’s deterioration in the later years of 1990s. Shortly afterwards, Nick Szabo (Chaum’s associate) developed a cryptocurrency referred to as Bit Gold and released it. It was a notable event because it used the block chain system that is the basis of several modern cryptocurrencies. Bit Gold did not gain popularity and collapsed.
Pre-Bitcoin Virtual CurrenciesAfter the collapse of DigiCash, most of the research as well as investment in the field of electronic financial transactions moved to digital intermediaries that were conventional like PayPal. In the early 1990s and early 2000s, e-gold virtual currency was the most notable in the United States. It was made and controlled by e-gold (a company based in Florida) that assumed the role of a digital gold buyer. It had active accounts in their millions at the height of the mid-2000s and processed transactions worth billions every year. The platform due to small-scale Ponzi schemes and money laundering operations faced serious legal pressure in the late 2000s before downing its tools in the year 2009. BitcoinBitcoin is considered to be the very first modern cryptocurrency. It combined built-in scarcity, record-keeping through a block chain, user anonymity and decentralized control.
It was first mentioned in Satoshi Nakamoto’s white paper publication in the year 2008. Nakamoto introduced Bitcoin in early 2009 to the public. Immediately, some enthusiastic supporters commenced exchanging the currency and mining it. In 2010, the first of many cryptocurrencies (inclusive of Litecoin) started to appear. It is around this time that Bitcoin had its first public exchange. In the year 2012, Bitcoin was accepted as a payment method by WordPress then other merchants such as Microsoft, Expedia and Newegg.com followed. Most merchants currently view the most popular cryptocurrency on the globe as a genuine method of payment. However, there are few other types of cryptocurrencies that are merchants widely accept as a method of payment but there are more active exchanges that enable holders to exchange such currency for either Bitcoin or other fiat currencies.
The above information about the history of cryptocurrency clearly show how it evolved from the beginning to now. Cryptocurrency is a very exciting concept that has the potential of fundamentally changing global finance and for the better. However, it is still technological as well as practical work in progress.