Did you ever stumbled upon an old coin or bill and ever wondered what is the story behind it? Where did it come from and why such a seemingless insignificant thing is so important in nowadays society? Well the answer is not that complicated. It is thought that people started using trading from as early as 40,000 years ago. Of course it was one of the most rudimentary forms of trading, they mostly used animals and personal goods as currencies.
The first evidence about a real form of currency we have is from 5,000 years ago, when the Mesopotamian shekel was invented. From this shekel to nowadays crypto currency the people kept experimenting with different forms of barter. But let’s talk more about the birth of crypto currency.
The year is 1983, David Chaum, an American cryptographer devised an cryptographic anonymous electronic money, which he called ecash. But it will take a decade until ecash will be implemented through Digicash, the earliest form of crypto payments. Soon to follow where two other electronic currencies, B-Money and Bit Gold. While the latter ones were never launched, they still served as a model for nowadays crypto currencies.
What are crypto currencies?
These kinds of currencies use a very complex code system which encrypts sensitive data transfer, guaranteeing the security of their units of exchange. This action is also known as cryptographic protocol. The protocols are built by developers using advanced computer engineering principles and mathematical equations that make them a near impossible task to break. And so, these currencies can’t be counterfeited or duplicated, making them one of the safest existing currencies. Most of the crypto currencies are not owned by national governments and such they are considered alternative currencies.
All crypto currencies have a so-called ledger, meaning that all of the transactions which take place within them are recorded. This process is known as decentralized control. A self control of the activities of their users, which are built into their codes by highly complex protocols. Because of this, the “miners” have an important role in the proper functioning of these types of currencies. They are basically verifying all the transactions of the ledger. For this kind of job they need the most powerful computers and softwares humankind knows to this day. The most complex and difficult mathematical problems which are the key of the verification process are cracked by these miners.
As mining is an open-source, every person or entity that manages to crack the key can contribute with a block to their transaction ledger, receiving a reward for the effort. Bitcoin, for example, used to reward miners with 12,5 BTC if they crack the code.
2008 until present day
One of the most popular crypto currencies is, without any doubt, Bitcoin. It was created in late 2008, and serves as the first decentralized crypto currency. The creator is not known, we only have a pseudonym, Satoshi Nakamoto. His Bitcoin: A Peer to Peer Electronic Cash System white paper shaped the function of the future network of the Bitcoin Blockchain. Encouraged by the growing corruption of the global banking system, full of flaws and frauds, he revolutionized the trading of the 21st century.
The very first block of the Blockchain, Genesis, was mined on 3rd of January, 2009. Late March 2010, arrived with the very first real-life transaction that had been made with BTC, when a man named Laszlo Hanyecz bought, using 10,000 BTC, two pizzas. From there on until the first site of cryptocurrency exchange, Bitcoinmarket.com was just a half-step.
A notable event for cryptocurrency is in the year of 2011, when BTC achieved a stunning performance of being at the same price as the USD (Us dollar). This is also the year when other currencies, namely Ripple (XRP) and Litecoin (LTC), were created. They soon challenged Bitcoin on the top of the electronic market. 2015 was the year when the crypto trade skyrocketed to new heights with the launching of the Ethereum (ETH), which is currently the second largest crypto asset of today. Ethereum came with something new in this field, ERC-20 tokens and the Smart Contracts. This Contracts allows transactions to be verified without the interference of a third party.
As of today, Bitcoin (BTC) is still in the first place of digital asset, with Ether (ETH) being second. In the moment of speaking there are as many as 2700 crypto assets that exist on the market, with a growing number everyday. People are using these currencies for buying a variety of products. From food to daily life tools, clothing or games, some even using them on online casino games, crypto currencies know no bounds.
2021 and beyond
If some of you are planning to invest in these types of currencies in the near future, you should probably take into consideration one of the crypto currencies in this article, Bitcoin and Ethereum are the best ones you should try. An alternative to them is TRON (TRX), which was founded in 2017, and is now functioning as an independent blockchain platform after it split up from Ethereum network. Ripple (XRP) is another well-known platform, with a steady growth starting from 2017 it is expected to keep ascending in the years to come too.