Most people think that Bitcoin is the first Cryptocurrency and cryptocurrencies are a relatively new concept. But did you know research about cryptocurrency has been going on since late 1980s! We are here to tell you the history of cryptocurrency from the very beginning!
Since the late 1980s, researchers have been studying the concept of cryptocurrency. The researchers aimed to create a currency that could be sent anonymously over the internet without the need for permission from institutions such as banks or governments.
All of the efforts paid off when American cryptographer David Chaum launched the first cryptographic electronic currency, Digicash, in the Netherlands in 1995. It was a very basic version of cryptographic electronic payments that required software to make bank withdrawals and required certain encryption keys before being sent to the recipient.
Chaum’s concept was a hit, and Microsoft wanted to buy it for $180 million and put it on every PC running Windows. Chaum’s company, however, had to file for bankruptcy due to the Central Bank of the Netherlands’ adverse action.
During the internet bubble, PayPal also created a peer-to-peer electronic payment system. People continue to utilise it to this day. Although it is not a cryptocurrency in the literal sense, it leverages the same premise of sending money over the internet.
BitGold and the Double Spending Problem
The second cryptocurrency, BitGold, was launched by Nick Szabo, who is widely regarded as Satoshi Nakamoto. BitGold was created in the same way as Bitcoin was. The only issue was that it had a problem with double spending. This meant that lawful owners may store, edit, and manipulate digital material without the need for permission from a central authority. This means that the digital data in the ledger could be copied, pasted, and changed without the need for a central authority, and that anyone could make many payments with the same unique currency.
In 2008, an anonymous developer named Satoshi Nakamoto published the white paper Bitcoin – A Peer to Peer Electronic Cash System, which contained a solution to the Double Spending problem. It was resolved as a result of the advent of the blockchain concept. When you combine Chaum’s and Szabo’s ideas, you get something that looks a lot like Bitcoin today.
The storey of Bitcoin and later cryptocurrencies began with this.
On January 3, 2009, Satoshi Nakamoto mined the first Bitcoin block. The Genesis Block is the name given to this block. This headline from the New York Times was included in the first block by Satoshi to highlight the economic conditions that led to the birth of Bitcoin.
For the first few months of 2010, Bitcoin had almost little value. The value of one Bitcoin was less than 14 cents six months after they began trading in April 2010. Two big Papa Jones pizzas were purchased for 10,000 BTC on May 22, 2010. 10000 BTC is currently worth Rs 3,200 crores!
BTC’s value soared to 36 cents in early November before falling to roughly 29 cents.
Bitcoin was demonstrating that it has real world value, even if it wasn’t worth much at the time. It peaked at $1.06 in February 2011 before plummeting to 87 cents.
A Forbes report about the new coin that year resulted in a price increase. The price of a Bitcoin increased from 86 cents to $8.89 between early April and the end of May.
The price more than tripled to roughly $27 on June 1, when Gawker published a report about the currency’s attractiveness in the online drug trafficking community. The market value of bitcoins in circulation was roughly $130 million at the time. The value fell to $4.77 in September.
Litecoin was launched in October 2011 as a spin-off notion of Bitcoin, referred to as an altcoin. Namecoin and seven other cryptocurrencies trailed Litecoin in terms of market capitalization.
Bitcoin values gradually increased in 2012, prompting the establishment of the Bitcoin Foundation in September of that year to encourage the currency’s development and adoption. Another new cryptocurrency, Ripple, has been introduced. Venture capitalists helped fund it.
Bitcoin’s value varied a lot in 2013 due to governmental, criminal, regulatory, and software difficulties.
Its price peaked at $755 on November 19 before plummeting to $378 the next day, and it was back up to $1,163 by November 30.
Mt.Gox, the world’s largest bitcoin exchange at the time, crashed and declared bankruptcy in January, losing 850,000 bitcoins in the process. While the exact circumstances are unknown, it’s likely that the bitcoin were stolen over time due to the “transaction malleability” bug in the bitcoin software, which was discovered in 2011, and resold on various exchanges for cash, including Mt.Gox, until Mt.Gox checked their wallets and discovered they were empty. Their balances were considerably lower than they should have been.
The value of Bitcoin continued to plummet throughout the year, eventually falling to 152 USD in December.
In July, Ethereum, a new blockchain project, was unveiled.
Bitcoin steadily increased to $434 in January 2016 after a year-long down market.
Ethereum was the first cryptocurrency to introduce smart contracts, and it has since risen to become the second most valuable cryptocurrency by market capitalization.
In January, BTC reached a high of $998 USD. In July, the Bitcoin software was updated to accommodate the Lightning Network and enhance scalability.
Bitcoin was selling at roughly $2700 a week after the upgrade was implemented in August, and by December 17, it had achieved an astounding all-time high of just under $20,000.
Bitcoin was unable to maintain its all-time high, and Ethereum, which had reached its own all-time high of about $1,400 in January 2018, was also unable to do so. Due to ongoing exchange intrusions, financial restrictions and security issues have arisen.
This added to the downturn, and Bitcoin had fallen to roughly $3700 by the end of 2018. Prices, on the other hand, did not stay down, and since the end of 2018, Bitcoin, along with most other cryptocurrencies, including Ethereum, have been steadily rising till the ATH in 2021.
Many meme coins, such as the Shiba Inu, a Doge spin-off, were created in 2020 and have had various oscillations i their value since then.
El Salvador became the first country to proclaim Bitcoin as its official currency in 2021.
So this was a rundown of the cryptocurrency timeline.
To know more about other fascinating concepts of Web3, check out the Crypto101 series by Coin Crunch India.