Bitcoin is perhaps the most known cryptocurrency today. In recent years, it rose to popularity and became a household name because of its exemplary performance – especially last year. With its rise in popularity, plenty of Bitcoin exchange apps and software have popped up, including The Coin Offering, to help you monitor and track the cryptocurrency’s progress.
However, the process is as mysterious to a lot of people today as it was when it was initially introduced back in 2008. As Bitcoin celebrates its 10th birthday, let’s take a trip down in the early years of the cryptocurrency to take a look at how far it has come.
1982 to 1998 – B.B. (Before Bitcoin)
Three people have been known for visualizing the use of digital currency prior to Bitcoin:
As far back as 1982, someone had already imagined a paperless financial world with the concept of e-cash. Computer scientist David Chaum created a privacy-friendly automated payment system. DigiCash was a blind signature system that was intended to create a secure online currency. Not experiencing the same success as Bitcoin, it became bankrupt in the late 1990s.
In 1997, Adam Back invented Hashcash. It was a proof-of-work system that is nearly identical to what Bitcoin uses. Additionally, it was used to reduce email spam and denial-of-service occurrence. While not really around today, Hashcash is still credited with inspiring the mining algorithm used by Bitcoin.
While Bitcoin is the first globally recognized cryptocurrency, many before tried to form online currencies with encrypted ledgers. An example was B-Money, formulated by Wei Dai, and has been deemed as Bitcoin’s first draft.
Wei Dai’s motivation for B-money was to remove governments’ control over cash flow through regulation and eliminate the need for participants in the system to provide identification. Dai proposed for participants to have copies of the same ledger instead of a dominant entity controlling it. New transactions would mean updates on everyone’s books. Moreover, these keys would be comprised of public keys containing only amounts and without names. The decentralized approach suggested by Wei Dai would inhibit any lone entity from blocking transactions and simultaneously guarantee the privacy of all users—something we see with modern-day cryptocurrencies.
Regrettably, B-money never achieved full development and release.
2008 – Mystery Man
Wei Dai’s initial plan would eventually serve to become Bitcoin’s blueprint. It was even referenced in a paper detailing a new system published by someone named Satoshi Nakamoto.
The electronic transactions software began with the framework of coins from digital signatures. Nakamoto also incorporated a way to prevent double-spending – which was a significant issue for digital exchanges – in the form of peer-to-peer networks.
In these networks, proof-of-work would be used to record a public history of transactions. For stronger security, this list would be “computationally impractical” for attackers to modify since computers would rule over it.
Proof-of-work is the system used by Bitcoin’s blockchain network, where a computer needs to solve a complex mathematical problem and other computers verify the solution. The miner whose computer solved the challenge will receive Bitcoins as compensation.
2009, 2010 – B.B. Part 2 (Bitcoin Begins)
Bitcoin software was presented to the public in 2009 along with its mining process. At the start of the year, Genesis Block – the first-ever block of this cryptocurrency – was mined. In the same month, the first Bitcoin transaction occurred as Nakamoto sent 10 Bitcoins (BTC) to the renowned computer developer Hal Finney. A few months passed and in October, the first Bitcoin exchange rate was announced at $1 to be worth 1,309.03 BTC.
In May 2010, the programmer Laszlo Hanyecz purchased an actual product using the cryptocurrency. He sent 10,000 BTC to an individual in London as payment for two pizzas. By then, its total value was $25. That year would prove to be Bitcoin’s rise to glory as more and more parties acknowledged its potential for legit private transactions.
2011 to Present – Bitcoin’s High and Lows
By 2011, rivals, known as altcoins, appeared. These alternatives tried to improve on Bitcoin’s design regarding speed and privacy. This was also the year that Nakamoto’s digital currency pushed past the dollar threshold for its worth. Its value steadily grew over the years as many invested money in it.
2017 was Bitcoin’s most lucrative year. This was when the cryptocurrency finally passed the $1,000 point and kept on rising. By October, it reached $6,000 and hit a whopping $19,783 at the end of the year.
Unfortunately, this year has not been the best for Bitcoin. Its rate has since been described as volatile and the price has steadily plummeted over the months.
Even now, not a lot of people truly understand how cryptocurrency works. Nonetheless, it looks like developers will continue to improve on cryptocurrencies and these may soon be the primary tools of transactions in the future.
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