What is Cryptocurrency ?
“ Cryptocurrency is a digital asset designed to work as a medium of exchange wherein individual coin ownership records are stored in a ledger existing in a form of computerized database using strong cryptography to secure transaction records, to control the creation of additional coins, and to verify the transfer of coin ownership.”
So what does it mean cryptocurrency ?
Now to explain it simply, Cryptocurrency is decentralized digital money that can be used to buy goods and services and, is based on block-chain technology. There are more than 6000 different types of cryptocurrencies in circulation around the world. This digital asset is not managed or governed by any central authority hence totally immune to the government’s interference or manipulation.
Crypto-currencies are encrypted (secured) with specialized computer codes called cryptography. It uses an online ledger with strong cryptography to secure online transactions. Blockchain technology helps to register the address of the owner, the sender and it is tightly secured making theft or hacking very difficult.
The Humble Beginning of Cryptocurrency
Cryptocurrency has its roots set back in as far as 1983 when an American cryptographer – ‘David Chaum’ came up with cryptographic electric money called-‘e-cash’. However, the first decentralized Cryptocurrency – ‘Bitcoin’ was created in 2009.
In a mailing list discussion on cryptography, a paper called- “Bitcoin- A peer-to-peer electronic cash system” was published under the pseudonym Satoshi Nakamoto (the identity is still unclear and mysterious). The Bitcoin software was made available to the general public for ‘mining’ for the first time in 2009.
What after 2009?
For the time period between 2009 and 2010, the Bitcoin was only mined, not traded. In 2010, nearly 10,000 bitcoins were traded for two pizzas (sad, but true). As the idea of decentralized and encrypted currencies gained popularity, many new alternative cryptocurrencies appeared which were the improvements over the original Bitcoin software, all in 2011.
And the crash happened in 2013
By this time, the price of Bitcoin had already gone up to USD 1000, but came flowing down to $300 bringing loss to many investors. It took two more years for Bitcoin to stand back on its feet again and rise to $1000.
The unfortunate 2014 hacking
In 2014, Mt. Gox the major Cryptocurrency exchange at that time which oversaw nearly 70% of Bitcoin transactions got hacked, and a whole lot of 8,50,000 bitcoins got stolen valuing $460,000,000 in 2014, today- approximately- $4.5 billion. That’s a lot of money and the biggest theft of cryptocurrency so far.
After this incident, the prices of this Cryptocurrency plunged down drastically to 50% and did not recover back till 2016.
So what happened after that?
In 2016 emerged the Ethereum and ICO. The Ethereum platform rose as a strong competitor against the BTC with its Cryptocurrency- Ether (ETH). With Ethereum, the Initial Coin Offerings (ICO) also embarked on their beginning.
A glut of tokens could also be seen on the Ethereum blockchain, ever since the first crypto-asset ‘Augur’ was launched on the platform. A huge Cryptocurrency ecosystem is running on a single blockchain because currently there are more than 200,000 ERC tokens.
The year 2017 showed a spurted growth in the prices of Bitcoin Cryptocurrency when its value reached nearly USD $10,000.
The present scenario-
After 2017, the world of cryptocurrency has not seen back. People started taking cryptocurrencies more seriously and showed interest in investing in crypto. The number of cases of trading and use has risen ever since and evidently, more and more money started to flow in the Cryptocurrency ecosystem. The overall market cap of all cryptocurrencies has reached approximately $1 trillion.
How is the world taking it?
Many mainstream banking and financial institutions around the world, such as – Barclays, Citi Bank, Deutsche Bank, BNP Paribas, JP Morgan, Goldman Sachs, and BNY Mellon have shown a lot of interest in cryptocurrencies. The technology which works behind cryptocurrencies has kindled a revolution in the fintech industry.
The appreciation of Cryptocurrency has grown so far, that Kodak and Facebook have launched their own crypto coins named- KodakCoin and Libra respectively.
Who’s showing interest?
Cryptocurrency has already spread its wings across many industries. To talk about a few, for instance in the Hospitality Industry, the Spanish chain Casual Hotels, as well as the five-star Swiss hotel-Dolder Grand Hotel have allowed the use of cryptocurrencies, however – the Casual Hotels chain allow the use of cryptos just in the Casual del Mar Hotel in Malaga. The usage is increasing every single minute. The other industries are Airlines, banking, etc.
All we can say is that it is just the beginning of Cryptocurrency. These may be called the teenage years of Cryptocurrency and it still has to put its step into adulthood and maturity. It is a matter of wonder for us because we could only just imagine. As far as today is concerned, one BTC stands at $52,625.60 United States Dollar which is INR 3815221.80.
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