The idea of creating a cryptocurrency like Bitcoin has been around for a long time. There were many attempts to create one in the past; however, they were all unsuccessful. To explain further, their creation was a success but their use never progressed. The main issue most of them were facing, was the double spending problem. Any digital asset, just like other assets, needs to be usable only once. That’s the only way to prevent people from copying it and effectively counterfeiting it.
The concept of cryptocurrencies was introduced 10 years before the first serious one appeared on the stage. Computer Engineer Wei Dai, in 1998, talked and wrote about a digital currency. He refereed to it as B-money but it never went any further than just speculations. That same year, a blockchain pioneer named Nick Szabo attempted to create a currency named Bit Gold. Nevertheless, his idea had inefficiencies within the classic financial system. Even though both ideas never took off, they served as inspiration for the creation of Bitcoin.
The Creation of Bitcoin
A lot of people learned about bitcoin when it became popular several years ago. However, the truth is that it was created more than 10 years ago. When it first appeared, no one gave it a chance and it quickly disappeared. Several years later it exploded; however, lets start at the beginning. It was October 31st, 2008 when Sugoshi Nakamoto published a paper that was called Bitcoin: A Peer-to-Peer Electronic Cash System. That paper described the functionality of the Bitcoin blockchain network. It was essentially the day Bitcoin was created.
Several months later, in January 2009, Nakamoto mined the first block of the Bitcoin network, effectively piloting the blockchain technology. You can read more about block chain right HERE. This block is also known as the Genesis Block. It’s important to note that to this day, no one knows the true identity of Sugoshi Nakamoto. From that point until 2011, bitcoin wasn’t really successful on the market. It’s value was low and a lot of people started counting it out. It was on May 22nd in 2010 that the famous bitcoin story happened.
Laszlo Hanyecz bought two pizzas for 10,000 BTC which was the first recorded purchase of goods using bitcoin. People remember that day as the Bitcoin Pizza Day. The interesting thing is that it’s value was so low, Laszlo needed 10 000 BTC to get just two pizzas. At that time, things seemed grim but they were about to take a huge turn for the better.
The Rise of Cryptocurrencies
The growth of Bitcoin and all the other cryptocurrencies happened shortly after the Mt.Gox cryptocurrency exchange was formed. Between 2011 and 2013, Bitcoin managed to reach the value of the US dollar. This was also the time when other rivaling cryptocurrencies appeared. By the end of May 2013, there were 10 digital assets in the crypto market. This included big names like Litecoin. In August that same year, XRP (Ripple) a major crypto asset was established.
2011 was also the year when cryptocurrency enthusiasts discovered their biggest enemy – Hacking! In June 2011, Mt.Gox got hacked for a first time. Around 2000 BTC was stolen with a value of around $30000, at that time. However, that didn’t stop Mt.Gox from becoming the largest cryptocurrency exchange in 2013. They handled around 70% of all Bitcoin transactions.
All things related to cryptocurrency were going great for a long time. Nevertheless, continuous hacking attempts and stolen currencies were becoming a huge problem. In February 2014, Mt.Gox fell victim to another hacking. This time around it was the largest theft of BTC in Bitcoin history. The coins were valued at $460,000,000 at the time (current date value- over $3 billion).
This is where the first big problems occurred. The constant hacking attempts turned people away from cryptocurrency. The price of Bitcoin started dropping and by 2016 it plummeted by 50%. However, by the end of 2016 things started looking up once again. This was mostly influenced by the appearance of new popular cryptocurrency.
Ethereum and ERC – 20 tokens
As the price of Bitcoin continued to drop, crypto enthusiasts were searching for a solution. The answer was found in the introduction of Ethereum. The Ethereum network, currently the number 2 crypto asset in terms of market capitalization, was launched on July 30th 2015. This network introduced smart contracts into the world of cryptocurrency.
In August the same year, the first Initial Coin Offering (ICO) took place. It was known as the Augur crypto asset and it used Ethereum’s smart contracts. All crypto assets that are created through Ethereum’s smart contracts are known as ERC – 20 tokens. More and more ERC- 20 tokens are created every day. At the moment there are more than 1000 ERC-20 tokens with a market capitalization. All of this led to the stabilization of the Bitcoin price. Since the beginning of 2017, the whole word started talking about cryptocurrency.
Bitcoin & Cryptocurrencies Today
Today, the cryptocurrency market hosts over 2000 digital currencies. They are being implemented in everyday life. A lot of companies started allowing crypto payments, especially with Bitcoins. On top of that, Bitcoin ATM’s started appearing and their number is increased every day. During the past year, a lot of shops started accepting cryptocurrencies as a method of payment. Crypto assets are being used as a form of fundraising as well.
For instance, KFC Canada accepts Bitcoins and so do Newegg and Microsoft. Overstock, Namecheap, and Cheap Air are also on the list. Additionally, we have to mention another major crypto market. We are talking about Crypto Online Betting. Bitcoins play a major role her as they are a serious force in the online gambling scene. You can learn more about how crypto works in sports betting check our blog post on Bitcoin Sports Betting & Other Cryptocurrencies.
Many online casinos accept cryptocurrency as well. However, it is more spread in the sports betting section. It has more markets which makes it more popular to bettors. Bitcoins have an advantage over regular currency. They are much easier to use for any type of online transaction. It removes the need of card transactions and huge fees.