Cryptocurrencies took the finance world by a storm when they first emerged. As you may already know, Bitcoin is the world’s first crypto. Investors vouched for the first decentralized currency in the world that could offer them financial independence from government intervention.
Blockchain has been a breakthrough technology for the fintech industry. It offers a decentralized ledger system instead of having someone keep all their data in one server. It is practically impossible to hack into this data and falsify it.
Trading cryptocurrencies has easily crossed every tech-savvy millennial’s mind. The reason for that has been crypto’s volatility. Investors watched Bitcoin surge in the last with surprise and even disbelief. The cryptocurrency is currently trading at $19269.50.
Before you jump into the world of trading cryptocurrencies, it is essential to learn a few important points:
- How cryptocurrencies emerged
- Why trade cryptocurrencies
- What makes them so desirable to investors.
What is a cryptocurrency?
First things first, let’s define what a cryptocurrency is. Simply said, a cryptocurrency is a digital asset. Cryptos were created to act exactly the same way as normal money are mediums of exchange. Cryptocurrencies use cryptography to store records of data in a ledger, which is a computerized database.
Cryptocurrencies are usually decentralized and operate through a distributed ledger technology. Traditional currencies are decentralized, which means a central authority does not govern them. The very first cryptocurrency was Bitcoin, released in 2009.
The History of Cryptocurrencies
The idea of cryptocurrencies first emerged in 1983. Cryptographer David Chaum first conceived the idea of electronic money called ecash. In 1995 he implemented his vision through Digicash, which needed user software to withdraw notes from a bank and a specific encrypted key sent to the recipient.
Bitcoin was the very first cryptocurrency to emerge into the world. It’s domain name ‘bitcoin.org’ was registered on 18th August 2008. An anonymous individual or group released a whitepaper titled Bitcoin: A Peer-to-Peer Electronic Cash System 31st October 2008. Nakamoto implemented Bitcoin’s software to be open-source and released it in January 2009. Nakamoto kept his identity anonymous.
The very first receiver of a bitcoin transaction was Hunk Finney. He downloaded the software and got ten bitcoins from Nakomoto. Programmer Laszlo Hanyeczfirst did the first commercial transaction with bitcoin. He bought two Papa John’s pizzas for ₿10,000. Today those two pizzas would be worth 150 million.
Analysts assume that Nakamoto himself mined at least one million bitcoins before he disappeared in 2010. Before disappearing, he handed his network key to Gavin Andreson, who later become the lead developer at the Bitcoin Foundation.
Stay tuned for our next bit on cryptocurrencies, where we go into more detail on how to trade!