Bitcoin – The Future Cryptocurrency
To many people, cryptocurrency might appear to be something that emerged out of nowhere to become a huge force in both the technological world and in the personal finance. Bitcoin- The Future Cryptocurrency.
The digital coins can replace the current method by which we both pay for products or services and receive payment for those things. They also might someday be the impetus for individuals taking control over aspects of their lives that were once governed by middlemen and third parties.
It does not have a very long history, but it definitely had some major signposts and events that it had to experience before it could reach where it is today. At different points in its existence, cryptocurrency has seemed like both a permanent thing that would be indispensable in the future and a scourge of society that only held value for those who were up to no good.
Cryptocurrency certainly has that potential, which is really quite impressive for an innovation that is barely ten years old.
Before Bitcoin
Starting in the 1980s, there were several developers and innovators who had the idea for money that would exist in the digital realm. These people didn’t get very far with their work. But they planted the seed for the future.
The early forms of cryptocurrency meant to be anonymous payment systems that were verified over a popular network via a cryptographic process. For whatever reason, none caught on with the public like a specific piece of writing that would be issued in 2008. It can be said that Bitcoin- The Future Cryptocurrency.
The Origins of Bitcoin
In 2008, someone named Satoshi Nakamoto wrote a white paper, which is a technical document talking about some scientific project. They titled the paper “Bitcoin: A Peer-to-Peer Electronic Cash System.” At the same time; someone also registered the domain Bitcoin.org, while Nakamoto published the software allowing Bitcoin to be mined for the first time.
The identity of Nakamoto has always remained a closely-guarded secret. Various investigative efforts have attempted to learn who this person is and if they used a pen name; some even suggest it is a pen name representing multiple people. In any case, Nakamoto sent some Bitcoin to a friend in 2009, and the world’s first digital currency was originated.
Bitcoin started to attract some attention in certain online communities for the ingenious way that it left banks; and other financial institutions out of the equation. It really was a peer-to-peer method of payment between parties. The currency operated over a decentralized network; and the cryptographic process that had been in place in early digital currency attempts was refined.
In this new discovery, a network of computers all worked at verifying the transactions made between parties. This process removed the worries about double payments that had slowed up similar projects that had been attempted previous to this. You can use Bitcoin to pay for something; and the parties involved would need to be a part of the process.
Bitcoin’s Development
This system become the most popular and lucrative cryptocurrency after the publication of the white paper. The development phase for the coins to get to that point has been long and often quite tough. And in many ways, it still has a long way to go in terms of a viable payment system, if only because it is yet to use enough in that way.
The first cryptocurrency transaction allegedly took place when someone paid 10,000 Bitcoin to another person for some pizza. At the time, the coins had no real value. That amount of Bitcoin would be worth a lot of money today. It is evident that Bitcoin- The Future Cryptocurrency.
Eventually Bitcoin started to gain value and often lose it thanks to simple principles of supply and demand. Because Nakamoto had restricted the supply of the coins in his original paper; it meant that the demand for them would have an effect on the value in a somewhat volatile way.
The first widespread public awareness of Bitcoin came with a negative spin attached to it. When a large criminal network known as Silk Road was busted in 2013; it came to light that those in charge of the operation hid their doings by using Bitcoin. That’s because payment with Bitcoin requires the transacting parties to enter no personal or financial information beyond the money that changes hands.
The Second Generation of Cryptocurrency
Bitcoin faced a lot of imitators in the early days of cryptocurrency; with most of these coins doing the same thing that Bitcoin did, only in slightly different ways. Somewhere along the line; people began to make out that the blockchain technology that led to Bitcoin’s creation was more versatile than that. If the blockchain could do a financial transaction; why it could not act as the mediator and validator for other peer-to-peer interactions?
The answer was that it could do those things. Now, came the second generation of cryptocurrency. While many of these coins could indeed serve as a digital currency; they also could be used to fulfill other functions.
Ethereum, which was introduced in 2015, was the first of these alternative coins, or altcoins, to make a widespread impact. The blockchain network of Ethereum, which is fueled by its native coin called Ether, can execute smart contracts. Two parties can write the agreement and go into effect automatically when they meet the terms.
Another Ethereum innovation was the creation of decentralized applications, or dApps. These are just like the apps that you might find on a cell phone or an internet network; only they are completely decentralized; meaning that the creators maintain absolute control over them instead of ceding control to a third party.
There have been many other coins in this second generation that have made a dent on society already. Many of them were no more in that ideas originally that eventually – because popular when the creators secured funding, which led to another cryptocurrency innovation known as the ICO.
Popularity of the ICOs
An ICO, or initial coin offering; happens when the entrepreneurs and technical directors behind a new cryptocurrency require money. It helps them covert their ideas into concrete results. The cryptocurrency project contact the investors who want to fund the projects. Those investors usually tie up Bitcoin or Ether and receive the new coins of the startup project in return.
Cryptocurrency and Regulation
The way that the financial situation has always worked is that a country issues money; and then has the right to create regulations on that money as they see fit. But cryptocurrency is a decentralized currency, which means that there are no “powers that be” in charge of it.
Some countries aggressively attempted to cut out cryptocurrency initiatives. Others have been more receptive. It is rightly said Bitcoin- The Future Cryptocurrency.
While there have been many conflicting decisions made by governing bodies around the world; there hasn’t really been any consensus reached.
Bitcoin and the rest of the cryptocurrency market have stabilized some in the past few months. But the coins have the volatility that likely will remain until they start to establish themselves as useful to a large percentage of the population.
Cryptocurrency Adoption
One of the things stopping cryptocurrency from rising to previous levels is the fact that not enough of the coins have been used in the situations for which they were intended. That means many places did not accept Bitcoin as payment, even though it gains more traction every day.
Many of the detractors of cryptocurrency point to this lack of usage as a sign of its weakness as an investment vehicle. Its proponents think otherwise, pointing to the steady progress the coins are making towards saturation on a large level.
Synopsis
In several ways; the history of cryptocurrency has represented almost as much volatility as the prices of the coins themselves apt to do. But the historical surge of cryptocurrency largely head in a positive direction; even though the sample size of ten years is quite small to make definitive judgments on where it heads in the future. Bitcoin- The Future Cryptocurrency is quite evident.