History of Cryptocurrency

History of Cryptocurrency
As it is a trending new way to perform monetary transactions, in the past Cryptocurrency has had its fair
share of bad reputation over the years through fake crypto-frauds such as “Bit-Connect” and “One-Coin”
and also because of its frequent use to make payments for narcotics.
“What’s happening is that all these fake Cryptocrrecies that are going out there and there’s no
regulation on the actual level of Bit-Coin itself. It’s completely unregulated. Its dark market.”
– Jordon Belford “Wolf of wall street”
Several incidents that took place in the past have proven otherwise. Annual “Bit-Coin Pizza Day” falls on
the 22nd of May to mark the day that Laszlo Hanyecz bought two pizzas using 10,000 Bit-Coins in 2010,
which was only worth $35 at the time but ended up with him losing $500,000,000 as the worth of those
10,000 Bit-Coins rose with time. Even James Howells lost 7,500 Bit-Coins in 2009 because his wife
though that the computer he used to mine the Bit-Coins was too noisy and threw it away, and cost him
$400,000,000 in today’s worth. Although these stories are from the era in which Cryptocurrency started
trending, the fundamental ideas behind it are much older than you think.
In 1983, an American by the name David Chaum was experimenting the concept of electronic cash while
being part of a movement known as “The Cyberpunks”; a group of activists who defended the idea of
using Cryptography and computers to protect the privacy of individuals. (Cryptography: The study of
techniques for secure communication away from a third party) In 1989 they formed “Digi-Cash” and
later in 1993 Digi-Cash launched their “E-Cash” system in line with David’s goal to create a safe and
anonymous transaction system. This was a time where digital cryptography was frowned upon that
some early crypto-enthusiasts has to smuggle code through printed t-shirts or they had to tattoo the
code to their body because the US Government sensed a threat and imposed certain restrictions related
to the field of Cryptography. David was contacted by Bill Gates, wanting to integrate E-cash into
Windown-95. It’s rumored that David was offered $100 million for the project but David declined it, and
every offer that followed. After Digi-cash along with E-Cash fell into the control of the investors, Digi-
Cash began reaching out to banks, but although majority of the banks were interested they all were
determined to stick to lucrative credit cards rather than experimental product. Eventually by 1998 Digi-
Cash bankrupt and the very first attempt at digital currency came to an end.
At that time Cryptocurrency was well ahead of its time, but there were several individuals who saw
potential in it by 1999.
“An electronic cash was necessary for the newly formed internet and was also a logical tool for
limiting government overreach.”
-Milton Friedman, 1999

Freidman would go on to mention that there needs to be a way to send money from A to B without A
knowing B vice versa. He also stated that the monetary supply and monetary policy should be set by a
computer, out of the reach of human corruption.
During these times several markets were seen based around cryptographic money. They were all in
thirst for the attention that Digi-Cash had generated. Even several individuals had ideas, and one that
stands out the most was “Bit-Gold” which was proposed by ex-Digi-Cash employee Nick Szabo in 1998.
His idea was, instead of digital currency being a token that represents normal money, it should be
awarded to miners for completing cryptographic equations. Bit-Gold differs from past attempts at digital
currency is by the fact that it completely distances itself from relying on banks.
“I was trying to mimic as closely as possible in Cyberspace, the security and trust characteristics of
gold. And chief among those is that it doesn’t depend on a trusted central authority.”
-Nick Szabo
We could even say that Bit-Gold was the missing link between David Chaums E-Cash and todays trending
Bit-Coin. Although due to certain privacy issues and technical shortcomings Bit-Gold along with very
other attempt was not adopting as they had hoped.
After the cryptographic community was quiet for several years following the failures of Bit-Gold and the
other said attempts, in 2008 the domain name “bitcoin.org” was anonymously registered. Few months
later a paper titled “Bit-Coin: A Peer-to-Peer Electronic Cash System” was published, signed by Satoshi
Nakamoto; the founder of Bit-Coin stating the fundamental outline for Bit-Coin. This paper started a
chain reaction that changed the course of financial history. Bit-Coin gave birth to the existing wave of
cryptographic enthusiasts we see today following the first Bit-Coin transaction of 10 Bit-Coin between
Satoshi Nakamoto and another cryptographic enthusiast; Hal Finney.
Although by 2009 Bit-Coin was up and running, it was still being down voted because much of the
community did not seem to care. Both the first reference of Bit-Coin in TV history in “The Good Wife”,
and the comments on the first post about Bit-Coin of Reddit were discriminating Bit-Coin although its
value by then was only $3.41 per coin.
Bit-Coin is worthless artificial gold.
- Charlie Munger
At
a
Figure: A comment on the first post related to Bit-Coin of Reddit.

time like such for Cryptocurrency, there were a few believers and one of them was Chamath
Palihapitiya; a Sri Lankan born venture capitalist, businessman and the former head of AOL Instant
Messenger.
“It’s (Bit-Coin) money 2.0, a huge huge deal”
-Chamath Palihapitiya

History of Cryptocurrency

Uploaded by

Copyright:

Available Formats

History of Cryptocurrency

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

History of Cryptocurrency

Uploaded by

Copyright:

Available Formats

History of Cryptocurrency

– Jordon Belford “Wolf of wall street”

-Milton Friedman, 1999

Bit-Coin is worthless artificial gold.

Figure: A comment on the first post related to Bit-Coin of Reddit.

“It’s (Bit-Coin) money 2.0, a huge huge deal”

You might also like

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.