A Brief History of Crypto

 

It all began in the 1990s when American Cryptographer, David Chaum, created what was considered as the first kind of online money in the Netherlands: DigiCash.

He created DigiCash as an extension of an encryption algorithm that was considered popular during those times, which was RSA. The technology he created, together with its eCash product, was able to generate a huge amount of attention from the media.

The second generation of internet money was born from the learning experiences of DigiCash. Companies from this generation came up with alternative payment solutions and money systems that were also internet-base but with small but important changes. Of these companies, the clear winner was PayPal.

The reason why PayPal trumped its competition was its ability to give users what they really wanted in the first place, which was money on the web browser platforms they were already familiar with.

DigiCash became so popular that Microscropt Corporation tried to buy DigiCash for $180 million with the intention of placing DigiCash on every computer in the world that ran on the Windows operating system.

One of the crucial mistakes Chaum and his company made was to reject Microsoft’s $180 million offer and earn the ire of De Nederlandsche Bank (Netherland’s Central Bank), which was the Netherland’s primary monetary authority. All of those crucial mistakes eventually led to the demise of DigiCash in 1998, when the company went bankrupt.

PayPal: Unlike its peers back in the day – was able to give its users the ability to transfer money to and fro merchants and buyers respectively, using a seamless peer-to-peer money transfer system.

PayPal’s massive success is very obvious by the fact that next only to credit cards, it is the most popular means by which to transact online.

But wait, there’s more! PayPal’s success led to other companies emulating it. One of the systems that tried to walk on the same path as PayPal was e-Gold.

Unlike PayPal, its primary currency was gold i.e. it received physical gold as deposits from its users and in return, it issued e-Gold or gold credits. E-gold was able to manage a relatively healthy amount of cross-border transactions using gold, but because of the prevalence of fraudulent investment scams like Ponzi schemes, e-Gold was closed.

The next significant event in the history of cryptocurrencies is the 2008 subprime mortgage crisis that nearly crippled the financial system of the United States and affected many of the world’s major financial institutions.

It is actually what brought about the global economics meltdown of 2008/2009. This event served as some kind of wakeup call to many of the world’s major economy and has led to the emergence of what is now popularly known as the Blockchain, which is the foundation of cryptocurrencies today as we know them.

In January of 2009, an anonymous person (or group) that went by the identity of Satoshi Nakamoto published a white paper that expounded, among other things, the source code, technology and concept of what is now called the Blockchain alongside the first Cryptocurrency – BITCOIN.

There is a speculation on the internet now that Satoshi Nakamoto is Elon Musk, although, there is not yet clear evidence to prove that. But it is believed that the mind behind the power of decentralized financial system and the technological advancement Blockchain proffer could only come from a genius like Elong Musk seeing the tremendous inventions he has created over the years. The Blockchain, an earthshattering, disruptive or incremental technology, was considered a foundational one.

Why foundational?

It is because it was meant to – and it still does – serve as a bedrock upon which other data network storage technologies can be built. The Blockchain naturally challenges all the conventional online data management protocols of this time, which included centralization of data.

Today, there are more than 19 million units (19,191,706.00) of Bitcoin that are circulating in the digital financial system and these have a total market capitalization of $398.17 billion. More importantly, Bitcoin is already garnering increasing acceptance and support from both retail, institutional investors and governments.

World richest men, big fintech companies, and world monopolies like JP Morgan, Elong Musk, Microsoft Apple, Google, PayPal, Micro Strategy, Greyscale, individual hodlers, and business communities alike.

Recently, some banks are beginning to join the space, because they know it has the power to wipe them off business just as the internet in 1990 wiped off many businesses. As part of its gradual integration into the financial mainstream, some economic powerhouse countries like Australia, U. S., Canada & Japan have already begun regulating Bitcoins through tax and legal measures.

This surge in popularity gave birth to other cryptocurrencies, which are referred to as altcoins or alternative coins to Bitcoin. Today, there are over 12,000 Altcoins in the digital finance system including ETH, ADA, BNB, BCH, XRP, TRX, SOL, AXS, AVAX, etc.

Due to the massive expansion of Blockchain and cryptocurrencies, it is obvious that cryptocurrencies have created an entirely new and global industry.

The massive advancement in the Blockchain Technology evident in the number of growth of cryptocurrencies in the market today.

Newly developed apps that will be created upon the Blockchain Technology will naturally use cryptocurrencies and as more and more cryptocurrency platforms and exchanges emerge, more and more people will be able to use Blockchain-based apps, which in turn will make the industry grow even more.

By every indication, cryptocurrency is here to stay and countries like China has created a national Cryptocurrency.

People often say, “Bitcoin isn’t real, it is just numbers on a computer screen!” But they fail to understand the Naira, Euros and Dollars in your bank accounts are also just numbers on a screen. Bitcoin is just as real as fiat money, except Bitcoin can’t be printed endlessly.