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A History of Cryptocurrency

How Did We Get This Far?

Looking Back at the Advancements of Cryptocurrency

Since the emergence of Bitcoin in 2009, the world of cryptocurrency has advanced leaps and bounds throughout the world. What began as an unproven concept is now considered by many as the future of currency. But how did we get this far, and what’s happening next in the world of cryptocurrency? Let’s take a look at some of the currency’s defining moments and what that means for the future.

Since opening the cryptocurrency exchange, Bitcoin has been joined by thousands of other cryptocurrencies, including:

  • Ethereum
  • XRP
  • Tether
  • Bitcoin Cash
  • Litecoin
  • EOS

What Is Cryptocurrency?

In order to understand how a digital currency became so widely popular, it’s first necessary to realize what that digital currency is. In very simple terms, cryptocurrencies decentralize currency, so that the government is not in control of your money. However, without the central entity, verifying payments and preventing double spending becomes a problem.

That’s where the crypto community comes into play. Rather than verify a transaction through a centralized third party, cryptocurrency transactions are essentially broadcast to the entire network via cryptography and blockchain. This public ledger records all transactions on an open-source network, allowing everyone to see transactions. 

Transactions are only complete when cryptocurrency miners confirm the transaction by solving a cryptographic puzzle. In cryptocurrencies, miners act as the third party by legitimizing transactions, similar to the government in normal currency transactions. However, rather than taking a cut of the transaction and the participants’ money, crypto miners are rewarded with crypto from the network itself. This system incentivizes everyone in the blockchain to maintain the legitimacy of the transaction history.

This alternative to the traditional financial system has become more and more appealing as it allows people to have more control over their assets without a watchful third eye. Now, let’s take a look back at cryptocurrency’s monumental steps in the past 10-plus years.

The Timeline of Cryptocurrency

01 – Initial Failures

While cryptocurrencies were not officially mined until 2009, there were other attempts to establish a digital currency in the years prior. In 1998, two cryptocurrency pioneers, Wei Dai and Nick Szabo, published ideas looking into the possibility of decentralizing currency. Their ideas both revolved around digital currency as a way to replace inefficiencies in the traditional financial system, such as spending money to create paper and coin currency. Though neither idea came to fruition, both Dai and Szabo became early adapters of cryptocurrency more than a decade later. These initial failures became the basis for the first real cryptocurrency — Bitcoin.

02 – October 2008
The world of cryptocurrency began when a person or group of people published the white paper Bitcoin: A Peer-to-Peer Electronic Cash System under the alias of Satoshi Nakamoto. This publishing outlined what Bitcoin is, why it is superior to traditional financial systems, and for the first time appeared to solve the missing piece in digital currency by introducing blockchain to the world. Nakamoto’s paper picked up on some of the initial ideas that failed to surface a decade prior and became the foundation for cryptocurrency as we know it.
03 – January 2009
Less than three months later, Nakamoto marked the official beginning of the cryptocurrency universe by mining the first block of Bitcoin. Dubbed the Genesis Block of Bitcoin, Nakamoto was rewarded 50 Bitcoin for verifying the first transaction, the recipient of which was Hal Finney. With transactions officially recorded and the Bitcoin network legitimized, the momentum for cryptocurrency was officially underway.
04 – March 2010

More than a year after the first official transaction, the first cryptocurrency exchange market was launched in the form of the now-defunct BitcoinMarket.com. This revolutionary development was proposed by a user on a Bitcoin forum who wanted to begin treating Bitcoin as a commodity that people could trade with each other and exchange for dollars. For the first time ever, traders could actually gauge the value of a single Bitcoin, initially valued at fractions of a cent.

05 – May 2010

With the first cryptocurrency exchange market established and growing at an exciting pace, the first purchase of goods using Bitcoin was recorded by Laszlo Hanyecz. On May 22, 2010, Hanyecz purchased two Papa John’s pizzas for 10,000 Bitcoin — a figure valued at $80 million in 2018. This day further solidified the legitimacy of cryptocurrency and has since been celebrated annually as Bitcoin Pizza Day.

06 – February — June 2011

At this point, BitcoinMarket.com was becoming more and more irrelevant as other exchange markets took center stage, including the infamous Mt. Gox market. February marked the first time that Bitcoin reached parity with the U.S. dollar as its popularity continued to soar. Rival cryptocurrencies also began to surface throughout the year.

In June, the first cryptocurrency hack happened on Mt. Gox when hackers stole 2,000 Bitcoin. Despite the hack, the market continued to grow in notoriety and holdings.

07 – 2013

Fast forward two years and Mt. Gox is easily the largest exchange market in the world. According to Investopedia, the exchange accounted for more than 70% of all bitcoin transactions at its peak in 2013. While optimism soared, the extreme notoriety of the exchange also presented a golden opportunity for hackers.

08 – February 2014

In the course of a month, Mt. Gox went from being the largest Bitcoin exchange in the world to bankrupt. The exchange was the target of the most substantial hack in cryptocurrency history. Hackers stole an astronomical 744,408 Bitcoin from Mt. Gox customers, as well as another 100,000 from the exchange itself. At the time, the value was $460 million.

Consequently, the hack forced Bitcoin’s value to nosedive by 50% in the coming months. While the cryptocurrency’s value did eventually return to its pre-hack metrics, the hack itself showed the need for enhanced security measures.

09 – July 2015

As Bitcoin and competing cryptocurrencies still recovered from the shock of the hack, a new cryptocurrency launched, bringing with it another level of security. The Ethereum network was created as a platform to exchange the cryptocurrency ether. The network popularized the usage of smart contracts, a cryptographic software that makes it easier to facilitate credible transactions without the presence of a third party at all.

Now utilized with many cryptocurrencies, the Ethereum network and its smart contracts are popular throughout the cryptocurrency world in the form of ERC-20 tokens. Whereas Bitcoin and other cryptocurrencies have their own blockchain, ERC-20 tokens differ in the fact that they are assets created through the Ethereum network’s smart contracts, and thus coexist with the Ethereum blockchain.

10 – Present

Developments in the world of cryptocurrency have continued since then as there are now more than 2,000 tradable cryptocurrencies. Bitcoin continues to reign supreme with its present-day, market-wide evaluation exceeding $128 billion in April 2020. Ethereum ($19 billion) and XRP ($8 billion) round out the top three cryptocurrencies by market capitalization.

So What's Next?

In the 10-plus years since its inception, cryptocurrency has clearly become a driving economic force, and those who invested in the new-wave currency early have been rewarded extravagantly. Let’s take a look back at Nakamoto. The father of Bitcoin — and cryptocurrency, for that matter — has maintained all of his Bitcoin assets that he mined or traded during his involvement with the project until April of 2011. With a staggering 980,000 Bitcoin to his name, Nakamoto’s assets are currently valued north of $6 billion, a number that was significantly higher at Bitcoin’s peak in 2018.

While the yields for early investors are potentially massive, some of the events described above have shown the need for continual development in the industry, and we are doing just that at ITBiometrics.

ITBx™ Fingerprint Wallet

When it comes to cryptocurrency, security is the number one priority. The Mt. Gox disaster proved that, and other small hacks since then have continued to push cryptocurrency security to new limits, resulting in our creation of the safest cryptocurrency wallet available.

The ITBx™ Fingerprint Wallet makes it easier than ever to protect your holdings from potential hackers. Not only is it offline — meaning hackers can’t access your holdings via an exchange market — it also is the first cold storage allet to feature biometric security. Rather than other cold storage wallets which are accessible by security codes PINs, and passphrases, our wallet uses fingerprint recognition, body temperature and blood flow detection, and ephemeral key wrapping to keep your holdings secure.

The ITBx™ Fingerprint Wallet makes it easier than ever to protect your holdings from potential hackers. Not only is it offline — meaning hackers can’t access your holdings via an exchange market — it also is the first cold storage allet to feature biometric security. Rather than other cold storage wallets which are accessible by security codes PINs, and passphrases, our wallet uses fingerprint recognition, body temperature and blood flow detection, and ephemeral key wrapping to keep your holdings secure.

The ITBx™ Fingerprint Wallet makes it easier than ever to protect your holdings from potential hackers. Not only is it offline — meaning hackers can’t access your holdings via an exchange market — it also is the first cold storage allet to feature biometric security. Rather than other cold storage wallets which are accessible by security codes PINs, and passphrases, our wallet uses fingerprint recognition, body temperature and blood flow detection, and ephemeral key wrapping to keep your holdings secure.

Here at ITBiometrics we know that we play a role in your cryptocurrency security, and we are so excited to deliver the ground-breaking technology that cryptocurrency security needs. Visit our blog to learn more about our ITBx™ Fingerprint Wallet, and make sure to get ahead of the curve and pre-order your ITBx™ Fingerprint Wallet today!

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