Cryptocurrency history: introduction
Cryptocurrency history: the 2008 crisis raised several questions about the robustness of the global financial system. It is no coincidence that the Bitcoin, the first cryptocurrency on the market, appeared just after the crisis, revolutionizing the financial model we currently know.
Previously, in the 90’s, cyberpunks sought to transform the mediums of exchange to build the basis for a new type of society. However, the right tools to make that possible only appeared in the following decade.
Nowadays, with many other virtual currencies established on the market and becoming great investment options, there are still questions and uncertainties to what role cryptocurrencies will have in the future. While we still wait to find it out, here is a bit of their history and evolution.
The Bitcoin: the first decentralized virtual currency.
As we previously said, the first cryptocurrency to appear was the Bitcoin. It was launched by Satoshi Nakamoto (a pseudonym used by its developer or developers), Bitcoin promised to bring a monetary revolution to the market. And that is exactly what it is doing, especially because of the system that makes it possible: the blockchain.
The blockchain is a digital ledger that keeps the record of all the transactions carried out with the cryptocurrency. The main advantage it offered was the creation of a coin that is not controlled by a single central authority but, instead, by all the participants in the system.
In other words, the system does not require the existence of an intermediary for the transactions to occur. It also facilitates the exchange of money between people that are in different countries.
But how is it possible? Well, since cryptocurrencies are virtual coins, that is, they do not exist in paper notes, they do not need an authority issuing them.
Those using the coin will pay, a seller for example, directly from a virtual wallet. This wallet sends a transaction code that needs to be validated by the computer network that is part of the blockchain. So, instead of an institution validating the transactions, in this case, all those in the system are responsible for that validation.
The origin of the first altcoins
As we can now see, the blockchain idea was well accepted. Even though it took a while to take off, in just over a decade of existence Bitcoin’s value escalated from only a few cents of dollars to more than US$ 62,000 in March of 2024.
The technology success, of course, spawned new alternatives that are now on the market. The so-called altcoins, the virtual currencies that came after Bitcoin, were developed with different conceptions, many of them evolving the system launched by Nakamoto in 2008.
One of the innovations was the change of the consensus model, the way that transactions are validated by the system. While Bitcoin uses a system called proof of work, where the validation is made by those who have bigger operational capacity, other coins have implemented the proof of stake model, where the validation is made by those who have the largest quantity of coins.
Nowadays, cryptocurrencies have become important investment assets. The appreciation of the most famous altcoins (such as Ethereum, Monero, Stratis and Dash), reaches millions annually, attracting thousands of investors around the globe.
Will cryptocurrencies become the future of money?
Even though cryptocurrencies have faced some difficulties throughout their history, the scenario is certainly positive for its wide use, either as an investment or as an alternative mode of payment to the conventional ones.
Paper money is no longer the customer’s favorite. Card payments and, more recently, instant transfers are opening the way to a world where money will be completely virtual.
Apart from that, cryptocurrencies offer the opportunity to give people more control over their resources, which, in long-term, could reduce inflation and provide customers more purchasing power.
Cryptocurrency history is still being written. Keep following our blog and learn everything about cryptocurrencies.
