Bitcoin And CryptoCurrency: Past, Present and Unpredicted Future

The concept of cryptocurrency emerged in the late 1980s, with the goal of creating a currency that could be delivered untraceably and without the need for centralized bodies (i.e. Banks). David Chaum, an American cryptographer, created Digicash, an anonymous cryptographic electronic money, in 1995. It was an early kind of cryptographic electronic payments that required user software to withdraw from a bank and particular encrypted keys to be delivered to a receiver.

Nick Szabo created Bit Gold in 1998, which is often regarded as a direct forerunner to Bitcoin. It required a player to provide computer power to solving cryptographic challenges, with the reward going to those who completed the puzzle. When you combine Chaum’s and Szabo’s ideas, you obtain something that resembles Bitcoin. Let’s look back in to the timeline of Bitcoin and cryptocurrency.

Beginning Of Bitcoin and Cryptocurrency in early 2008-2010

Satoshi Nakamoto published the white paper Bitcoin – A Peer to Peer Electronic Cash System on October 31, 2008, detailing the operation of the Bitcoin blockchain network. Satoshi formally started working on the bitcoin project on August 18th, 2008, when he purchased Bitcoin.org. While it is not the topic of this essay, it is worth emphasizing that Bitcoin, and other cryptocurrencies, would not exist without blockchain technology.

Bitcoin’s history was about to begin. On January 3, 2009, Satoshi Nakamoto mined the first block of the Bitcoin network. Satoshi embedded the headline of the newspaper The Times in the first block to forever refer to the economic preconditions that lead to Bitcoin technology. The Genesis Block is the name given to the first block containing 50 Bitcoins. For the first several months of its existence, Bitcoin had almost no value. Six months after they began trading in April 2010, one Bitcoin was worth less than 14 cents. The pizza was purchased in May, and by early November, it had risen to 36 cents before resting at roughly 29 cents.

Start of Bitcoin and Cryptocurrency Market Momentum During 2010-2014

After the introduction of Bitcoin as the first cryptocurrency, mechanisms for trading them had to be developed. The first cryptocurrency exchange, bitcoinmarket.com, debuted in March 2010. (now defunct). Mt.Gox followed suit in July of that year.

While it wasn’t worth much at the time, Bitcoin was demonstrating real-world value. It peaked at $1.06 in February 2011 before falling back to around 87 cents. The price skyrocketed in the spring, thanks in part to a Forbes article about the new “crypto currency.” Between early April and the end of May,  the price of a Bitcoin increased from 86 cents to $8.89.

Between 2011 and 2013, Bitcoin was able to achieve parity with the US dollar in February. Several competing cryptocurrencies appeared this year: By May 2013, there were ten digital assets in the cryptocurrency industry, including Litecoin. XRP, a significant crypto asset, joined the fray in August (Ripple).

After Gawker published an article about the currency’s popularity in the online drug dealing community on June 1, the price nearly tripled in a week to over $27. The current market value of bitcoins in circulation was close to $130 million. By the time September 2011 rolled around, the value had gone back to roughly $4.77. Litecoin, as well as other Bitcoin spin-off concepts known as altcoins, first debuted in October 2011. Litecoin ranked second in terms of market capitalization, trailed by Namecoin and seven other coins.

Bitcoin values rose substantially throughout 2012, and the Bitcoin Foundation was established in September of that year to encourage Bitcoin’s development and adoption. Another new cryptocurrency, Ripple, is backed by venture capitalists.

Bitcoin’s price fluctuated wildly in 2013 due to governmental, criminal, regulatory, and software difficulties. On November 19, its price reached $755, only to plummet to $378 the next day, and by November 30, it had risen all the way to $1,163. This was the start of another long-term crash, which resulted in Bitcoin falling down to $152 by January 2015.

Bitcoin Scams, Crypto Hackings and Other Challenges

Though not on purpose, the anonymity and absence of centralized supervision make digital currency a profitable endeavor and opportunity for criminals. Mt. Gox, the world’s largest bitcoin exchange at the time, filed bankruptcy in January 2014, having lost 850,000 bitcoin. While it is unclear what happened, it is likely that the bitcoin were stolen gradually over time, commencing in 2011, and resold on multiple exchanges for cash, including Mt.Gox, until one day Mt.Gox checked their accounts and discovered they were empty.

While the attack was not an isolated incident, it acted as a warning tale, and exchange security has greatly improved. Despite the fact that seven major cryptocurrency exchanges were hacked in 2019, exchanges are now providing greater assurances on their reserve holdings in the event of a compromise, such as Binance’s Secure Asset Fund for Users, which is an emergency insurance fund. Crypto traders are recommended to store their cryptocurrencies in a hardware or software wallet rather than on an exchange. Wallets like these were not as widely available during this period in cryptocurrency history.

Bitcoin and Cryptocurrency On Roll

Year on year, bitcoin prices increased considerably, rising from $434 in January 2016 to $998 in January 2017. In July 2017, a software upgrade to Bitcoin was approved with the goal of supporting the Lightning Network and improving scalability.

Bitcoin was selling at over $2700 a week after the upgrade was triggered in August, and by December 17, 2017, Bitcoin had achieved an astounding all-time high of just under $20,000. At the same time, a new blockchain project named Ethereum was making waves in the cryptocurrency world and was the second most valuable cryptocurrency on the market. It introduced smart contracts to bitcoin, bringing up a plethora of new use cases and spawning over 200,000 individual projects to date. They are all based on the Ethereum blockchain. All of these initiatives have their own cryptocurrencies with their own aims and goals, which are frequently distinct from those of Bitcoin.

Other blockchains, like as Cardano and Tezos, are now competing with Ethereum, and the cryptocurrency world continues to develop and grow in market value.

Bitcoin Burst And Market Recovery

Bitcoin and cryptocurrency like other altcoins were unable to maintain its all-time high, while Ethereum, which achieved its all-time high in January 2018 at roughly $1,400, was also unable to maintain. Financial regulations and security concerns as a result of ongoing exchange hacks aided the decrease, and by the end of 2018, Bitcoin had plunged to roughly $3700. Prices, however, did not remain low, and since the end of 2018, Bitcoin, along with most other cryptocurrencies, including Ethereum, have recovered in the present.

While the volatility of cryptocurrencies is both appealing and potentially disastrous, the underlying technology, blockchain, has the ability to transform many aspects of our society. Blockchain technology can be applied in practically any aspect of our daily lives, whether it’s giving accessible and reasonable financial exchange choices, safeguarding your personal money so that only you have access to them, or delivering correct data for your insurance quote. As the market gets more stable as knowledge increases, and concepts such as stablecoins and decentralized finance are introduced, it is easy to get excited about investment and technological potential, whether it is Bitcoin or another blockchain project you find appealing.

Bitcoin and Cryptocurrency Without Borders

Indeed, it is simple to see how cryptocurrencies are gradually but steadily gaining traction on a global scale. The growing popularity of cryptocurrency has resulted in an increase in adoption and use cases. Today, the construction of a Central Bank Digital Currency (CBDC) is in the works, and significant corporations are investing in blockchain, bitcoin and cryptocurrency. Obviously, such developments will drive the market’s rapid expansion.

Crypto assets have also grown in popularity, to the point that adoption has become more crucial and prevalent. The number of Bitcoin ATMs has increased, more stores have begun taking cryptocurrencies as a form of payment, crypto assets are being utilized as a form of fundraising, and you could even buy a Bitcoin ATM.

📚 Also Read: CryptoTab Browser

DEFI Is New Phenomenon

With Bitcoin and cryptocurrency, you may “be your own bank” — you are the sole owner of your digital assets and are responsible for their security.

Ledger assists in the protection of your important crypto assets by providing a secure solution that keeps access to your cryptocurrency offline and out of the reach of hackers.

DeFi applications use cryptocurrency to replicate traditional financial systems such as banks and exchanges. The Ethereum blockchain is used by the majority of them.

DeFi apps, on the other hand, run “without a central entity exercising control over the entire system,” according to John Wu, head of Ava Labs, a company that supports the creation of DeFi applications on the Avalanche blockchain.

Users can earn interest as a lender by lending cryptocurrency, just like a regular bank does with fiat currency. Borrowing and lending are two of the most prominent use cases for DeFi apps, although there are many more complicated possibilities available, such as becoming a liquidity provider to a decentralized exchange.

Interest rates are often lower than those offered by traditional banks, and the barrier to borrowing is lower than in a traditional system. In most circumstances, the only prerequisite for obtaining a DeFi loan is the capacity to provide collateral in the form of other cryptocurrency assets. Depending on the DeFi protocol utilized, users may be able to offer their NFTs, or nonfungible tokens, as collateral.

These variables, however, also contribute to DeFi being significantly riskier than a regular bank.

Conclusion

The existence of Bitcoin has spurred a debate over its and other cryptocurrencies’ futures. Despite recent challenges, Bitcoin’s popularity since its inception in 2009 has encouraged the development of rival cryptocurrencies such as Etherium, Litecoin, and Ripple. A cryptocurrency that seeks to be a part of the mainstream financial system would have to meet a variety of requirements. While that likelihood is remote, there is little doubt that Bitcoin’s success or failure in coping with the challenges it faces will have a significant impact on the fortunes of other cryptocurrencies in the coming years.