A Short History of Cryptocurrencies
Bitcoin, the cryptocurrency that started it all. On January 3rd, 2009, Bitcoin was released to the world as the genesis block was mined. This technological innovation was due to years of cryptography advancements. Bitcoin is the very first application of blockchain technology. Not the only blockchain in the world, but the first application of it. Despite being the first ever cryptocurrency, Bitcoin was not the first attempt at digital currency. In 1989, Digicash was created by an intelligent cryptographer named David Chaum. He created a company, Digicash, which solved the double spend problem, but it lacked decentralization. After 11 years, the company declared bankruptcy as a result of having no retail or merchant adoption. In 1993, National Westminster Bank created Mondex, a clunky digital payment system. After years of research and development they sold only around 14,000 digital cards. The system had no meaningful adoption, and eventually was purchased by MasterCard International in 2001 for its patents. In 2008, the banking crisis sparked such distrust in financial intermediaries that Bitcoin was released as an open-source answer to peer-to-peer payments. Bitcoin wanted to create a trustless solution to the double spending problem by using a peer-to-peer computer network.
Bitcoin was created by Satoshi Nakamoto, a pseudonym by the person/persons responsible for Bitcoin’s creation. While they created it, the Bitcoin network itself does not rely on any single entity. Its open and decentralized nature has allowed it to advance to the size it is now. There is no marketing involved. Incentives within the system are what attracts miners, buyers, holders, and traders. The fact that Bitcoin is an open-source code that runs as computer code means that no single party is in control. Every participant doesn’t have to trust one another, they trust the code.
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