In the last couple of weeks, we witnessed the amazing rise in the price of bitcoin. Also, we could see fluctuations in other cryptos such as Ethereum and ripple. The interest in cryptocurrencies is constantly rising. But how everything started and what are the key events in the development of alternative money are what you will learn in this article.
The emergence of the first virtual currency in 2008
On August 18, 2008, an anonymous person reserved the domain name of an evocative website: bitcoin.org. A mysterious internet user, bearing Satoshi Nakamoto’s pseudonym (and never identified to this day), publishes, on a thread discussion on cryptography, a white paper called “Bitcoin – a peer-to-peer electronic monetary system”. It thus laid the foundations for the world’s first electronic money over which no authority could exercise its control. Almost 20 years later, Bitcoin continues to arouse curiosity with fluctuations in its value.
Within the community, enthusiasm is immediate. The following year, Bitcoin was deployed as open-source software. The device relies on the blockchain to allow internet users to secure peer-to-peer transactions, without third-party intervention (such as a bank) to guarantee their integrity.
The emergence of the altcoins
In 2010, an internet user made the very first Bitcoin purchase by exchanging 10,000 Bitcoins for two pizzas. At the current rate, such a sum would be equivalent to millions of euros.
From then on, events started to speed up for the crypto market. Bitcoin is starting to gain popularity, and with it, the idea that it is now possible to design digital and decentralized currencies on the web.
We are thus witnessing the advent of new cryptocurrencies, which are an alternative to Bitcoin, most of the time promising increased transaction speed (Litecoin), enhanced anonymity (Zcash), or other advantages. Today there are more than 1,600 different cryptocurrencies, a number that continues to grow.
The first crash of bitcoin and price fluctuations
Despite stiff competition, Bitcoin remains the most famous, Bitcoin’s History is not a long easy one. In 2013, shortly after reaching the record valuation of 1,000 dollars (850 euros), Bitcoin experienced its first crash. Its value fell to 300 dollars (250 euros).
A year later, hackers managed to illegally get hold of 850,000 Bitcoins, which represented, at the time, the tidy sum of 450 million dollars (384 million euros ), and nearly 7 billion dollars (6 million euros) at the current rate.
After experiencing blazing prices, approaching 20,000 dollars (17,000 euros) in December 2017, Bitcoin has now a value of around 32, 000 dollars, but remains much more volatile than most traditional currencies.
Cryptocurrency as a worldwide phenomenon
Over the years, with the growth in Bitcoin and Ethereum’s value, the cryptocurrency became popular among the wider public. Today it’s the investment many people consider in a time of economic recessions and crises. Even though the volatility of the crypto market can be potentially devastating and attractive depending on your investment strategies, the fact is that blockchain as a technology is changing the face of many sectors and industrial fields.
And even more of its benefits we are going to see in the future. In case of a wider acceptance of the concept of decentralized finance and the inclusion of cryptos into the global payment processes, the crypto market has a bright perspective as a type of investment in times to come.
Usage of blockchain beyond the cryptocurrency market
The Blockchain has remained closely linked to the financial sphere until then. Everything changed in 2013. Vitalik Buterin, a young Russian-Canadian computer genius, then aged 19, became increasingly frustrated. He saw that the blockchain, in which he saw immense possibilities, remained confined to serving as a platform for the deployment of virtual currencies.
That’s why he begins to work on an alternative public Blockchain (until now, Bitcoin and others have all operated on the same Blockchain). Here we are talking about Ethereum, which was launched in 2015. Unlike its counterpart, it enables the deployment of smart contracts, and computer protocols coded on the blockchain.