The idea of cryptocurrencies
Today, Bitcoin and other cryptocurrencies are changing the global financial system through blockchain technology. This technology is considered as one of the greatest innovations of the 21st century and we witness its tremendous impact on the world economy.
According to Mohammad Hosseini, a trader and analyst of financial markets, investing in this field can become the second job with the first income of many people. But what might be interesting to you is that the history of cryptocurrencies and the Chinese blockchain goes back to the 1990s.
In other words, the idea of cryptocurrencies is not a new and innovative one. Before the advent of these currencies, many attempts were made to make such currencies. One of the major problems with these currencies was the possibility of double-spending, while a currency should only be able to be spent once and their counterfeiting must be prevented.
In fact, it was in 1991 that two people named Stuart Haber and W. Scott Stornetta, came up with the idea we now call the “Blockchain”. The first two attempts were to work on a chain of cryptographic blocks that no one could change their timeline.
A year later, they upgraded their system to use Merkle trees. In this way, they could store much larger volumes of data and documents in a single block.
Wei Dai, a well-known programmer and cryptographer, published an article in 1998 (10 years before the advent of Bitcoin) explaining B-Money and proposed the idea of cryptocurrency. In this article, he talked about a virtual currency that could be transferred to others, anonymously.
Simultaneously, computer scientist Nick Szabo came up with an idea called Bit Gold, which sought to use decentralized cryptocurrency. The idea suffered from drawbacks and inefficiencies, including the need for metal to mint coins and the reduction of multilateral monopolies needed to create transactions in the traditional financial system. However, Bit Gold has many similarities to Bitcoin and is considered father of this popular cryptocurrency. In the Bit Gold system, for example, users could be rewarded for solving cryptographic problems through processing power of their computers. As you know, this is exactly like the concept of cryptocurrency mining that we see about Bitcoin and other cryptocurrencies.
But Sabo’s plan also posed a major re-spending problem, and he could not solve the problem without using a third party to monitor the transactions.
None of these ideas eventually came to fruition but served as the inspiration for the idea of bitcoin.
October 31, 2008, the rise of bitcoin
An article entitled Bitcoin: A Peer-to-Peer Electronic Cash System, describing the performance of blockchain network was published by Satoshi Nakamoto. Nakamoto officially started working on the Bitcoin project two months before the article was published, and it was at this time that the Bitcoin.org domain was registered.
But who really was Satoshi Nakamoto, and how did he put into action the idea that so many people have been trying to develop for so long? It is not possible to answer this question even after all these years, because the identity of this person has remained unknown to everyone. Whether Nakamoto is a person or the name of a company or group has remained unknown and there are many rumors in this regard.
January 3, 2009
The first bitcoin blockchain was extracted by Satoshi Nakamoto, and the blockchain technology was used effectively. . This block, which contains 50 bitcoins, is now known as the “Genesis Block”. In fact, Nakamoto embedded the first headline of The Times in this block to forever reflect the economic preconditions that led to the birth of bitcoin technology.
In the first few months of Bitcoin’s birth, this cryptocurrency had almost no value. Six months after the start of the first bitcoin transaction, in early 2010, the price of bitcoin was less than 14 US cents. But at the time, few envisioned such future for bitcoin.
May 22, 2010
The first purchase of goods was registered by bitcoin. During this purchase, Laszlo Hanyecz bought 2 pizzas with 10,000 bitcoins. This day is called “Bitcoin Pizza Day”.
The first cryptocurrency exchange called bitcoinmarket.com was created. This exchange no longer exists. The Mt.Gox exchange was also launched in July of the same year.
2011 – 2013
Bitcoin hit a record high of $ 1 in February. Although the price of bitcoin fell below $ 1 again, after the publication of an article on the famous Forbes site about cryptocurrencies, the value of bitcoin rose again and reached about $ 9.
Sometime later, another site published an article mentioning the use of bitcoin to buy and sell drugs on Internet sites. As a result, the price of Bitcoin tripled to $ 27 in less than a week. For more information visit the link: hoseinifinance.com
During this 2-year period, some competitors emerged for Bitcoin and by May 2013, 10 cryptocurrencies were created, including Litecoin. During this time, the price of bitcoin was slowly and steadily rising. The Bitcoin Foundation was established at the same time to accelerate the development and expansion of the network. Ripple, which is currently one of the top cryptocurrencies on the market, was also introduced to everyone during this period.
February 2014 and the Mt.Gox disaster
The Mt.Gox exchange was one of the largest cryptocurrency exchanges at the time, accounting for up to 70% of bitcoin transactions. But in a catastrophe, the exchange was hacked and about 8.5 million bitcoins were stolen. The value of this bitcoin number at that time was about $ 460 million.
The exchange had been hacked before, but the amount of stolen bitcoins was not enough to cause problems. However, the 2014 hack hit the company hard and it is still considered the biggest bitcoin theft in history.
The price of bitcoin fell by half and did not return to its original price until the end of 2016. Similar thefts from the exchanges happened again, but none of them was as big as the theft from Mt.Gox.
Ethereum and introduction of ERC-20 tokens
30 July 2015
The Ethereum network was launched to introduce smart contracts to the world of cryptocurrencies. Ethereum is now the world’s second largest cryptocurrency in terms of total market value. These contracts allowed Ethereum to have its own ecosystem on the blockchain. In addition, Ethereum had its own local currency, known as Ether.
With the advent of the Ethereum network, cryptocurrencies other than Bitcoin, also known as Altcoin, became more popular. In addition to bitcoin, investors and traders also paid special attention to earn profits from these currencies. As Mr. Mohammad Hosseini believes, coins price increase and decrease with a little delay compared to bitcoin, and this can be used to gain maximum profit.
Cryptocurrencies that do not have a dedicated blockchain and run on the other cryptocurrencies blockchain are called tokens. The first ICO was launched on the ethereum platform and the Augur token was released. Ethereum -based crypto assets are commonly known as ERC-20 tokens.
The release of ERC-20 tokens intensified. There are now over 2000 ERC-20 tokens operating on Ethereum blockchain, indicating that a vast ecosystem of cryptocurrencies is running on a single blockchain.
Since then and after these events, the world of cryptocurrencies has always been dynamic and has experienced many events.
New cryptocurrencies were introduced, including EOS in July 2017, TRON in September 2017, and Cardano (ADA) in October 2017. The price of cryptocurrencies peaked in early July 2018.
The popularity of cryptocurrencies is growing, and the number of bitcoin ATMs (BTMs) is growing worldwide. . In fact, It can be understood why these currencies have become so popular. The reason for this was that more and more people were attracted to this market, and price increase of these currencies entered more investors to the field.
Many stores around the world have accepted bitcoin as a method of payment, including KFC, Newegg.com and Microsoft. The number of these stores is increasing rapidly.
In recent years, large companies have entered the field of cryptocurrencies and have invested in this field. These giant companies include Microstrategy, Grayscale, and Squer, which have large amounts of bitcoin in their portfolio.
The issuance of Central Bank Digital Currency (CBDC) is also one of the important topics of cryptocurrencies these days, which indicates the massive use and many capabilities of cryptocurrencies.