In the 90’s early days, many of us were still trying to figure out how to work with the internet . This was before phrases like “surfing the internet or ‘World World Wide Web’ were given an entirely new meaning in the world of. But, there were some brilliant sparks who were ahead of us and realized just how powerful an instrument the internet could prove to be.
A few of them are referred to as Cypherpunks believed that corporations and governments were able to exert too much influence over the people they served, and so they decided to use the internet to grant everyone around the globe the freedom they deserve and more control over their finances and personal information.
Cypherpunks were extremely skeptical of central banks, and their top priority was the development electronic cash. Two attempts were made , DigiCash and CyberCash, but neither was successful. It would be another decade before the world’s first digital cash system that was decentralized was revealed.
To discuss the development and evolution of cryptocurrency, we need to first be able to comprehend Bitcoin.
In the latter half of 2008, Satoshi Nakamoto released a white paper titled Bitcoin: A Peer-to -Peer Electronic Cash System. It explained the details of how it could work. Today nobody knows the identity of who Satoshi Nakamoto is. It could be a single person or an entire group of individuals. First Bitcoin (BTC) transactions was executed in the month of January, and everyone was exposed to the first cryptocurrency.
In April of 2011 the value of the value of one Bitcoin is worth exactly 1 US dollar. If you look at the current cryptocurrency market according to the market cap, they’re valued at just over $24,000. It took time before investors began to take a serious look at the latest digital currency, with a lot of ‘nerds’ engineers and programmers reaping the initial investment gains when it began to take off.
Blockchain technology is basically an electronic ledger, an electronic database where every transaction is recorded. The computers which store the data are referred to as nodes. The information can only be added after the nodes have verified the transaction and it is accepted. This is referred to as an Proof of Work (PoW) consensus.
Miners are nodes which perform specific tasks to enable transactions. Miners can encrypt information they receive (hashing). In addition, they also add additional transaction details and also hash this. Additional information is added and then hashed until they are able to create an entire block.
Miners are now racing against each others to figure out the complicated mathematical algorithm (block hash) prior to adding the block into the chain. Anyone who violates the code is the one who gets added to the blockchain. The other nodes on the network check the information provided by the transaction and then validate the block. In recognition of their efforts miners get rewarded with Bitcoin.
The rise of cryptocurrency
Since its launch at the beginning of the year 2009, Bitcoin changed the perceptions in regards to cash. It is not just an uncentralized digital currency that is not dependent on any central bank or government It can also be used to buy goods and services, trade internationally or to invest as an alternate choice.
You can purchase or sell crypto using an online trading platform like Binance. Amazingly, there are more than 10,000 currencies in the market for crypto. While Bitcoin is still the king of the castle Ethereum (ETH) is been in second place for a long time. According to current price of cryptocurrency while Bitcoin is worth $24,000 and up, ETH holds price at less than $1,900.
The market for crypto is extremely unstable due to a variety of reasons. To illustrate how cryptocurrency can increase in value, let’s examine our beloved companion, Bitcoin.
In the year 2020, BTC nearly quadrupled in value, and ended the year with just under $29,000. In April 2021, BTC price for cryptocurrency BTC were more than doubled, however all gains were erased by July of 2021. In the end of November BTC nearly doubled again, reaching a high of $68,990, but then dropping to $46,000 at the end of the month of December 2021.
Although BTC is down around 35% in the year to date however, in the past five years, it has experienced an increase of over 1,000 percent. With this volatile market, traders must be on the lookout for the cryptocurrency market. When cryptos compete for positions and prices fluctuate, they can rise or decrease by more than 10% within a single day.
Contrary to Bitcoin Some of the newest cryptocurrency e.g. Tether (USDT) don’t require to be mined and are tied to the fiat currency. They use an algorithm known as the Proof of Stake (PoS) verification technique, in which the amount of transactions that are verified is contingent on the amount of crypto that is’staked’.
It’s impossible to solve complicated mathematical algorithms, but it uses less energy and allows for quicker verification as compared to PoW. In addition, Bitcoin’s most fierce competitor is planning to completely switch to the PoS mechanism, reducing the energy usage by more than 90%.