What are the stories behind cryptocurrencies?
Cryptocurrencies are digital assets designed to work as a medium of exchange using cryptography to secure the transactions and to control the creation of additional units of the currency. Cryptocurrencies are a subset of alternative currencies, or specifically of digital currencies.
Bitcoin changed the landscape of digital money when it was introduced to the world in 2009, and was followed by many other types of cryptocurrencies. Now bitcoin and the over 800 copycats (so called altcoins) have reached a very large market valuation of $110 billion. Let’s take a look at how this emerging digital assets landscape began and where we are today.
The Pre-Bitcoin Era and Satoshi’s Gift
Since the beginning of the Internet’s early days, the concept of digital money has always intrigued the human race. When the world wide web really started to become popularized during the late eighties, and throughout the nineties, online privacy activists called cypherpunks began creating and envisioning digital currencies. David Chaum and many other well-known cryptographers helped pave the way for a technology like bitcoin.
One of the first digital currencies was Digicash, created by Chaum, and was later sold and used for bank-to-bank settlements only. There were many other efforts during those years that tried to create the perfect Internet currency such as Hashcash, e-gold, and Bitgold. However these ideas never really caught on until an anonymous developer named Satoshi Nakamoto revealed his white paper called ‘Bitcoin’ in 2008. The following year in January the Bitcoin network was born while the central banking system was once again quantitatively easing the world away from economic failure.
Bitcoin Has Produced Hundreds of Clones Offering Different Features
Following Bitcoin’s success at being the first cryptographic currency with a blockchain, the technology showed it had a better chance than the predecessors conceived before it. Additionally, other cryptocurrencies appeared on the scene shortly after the birth of Bitcoin. Some of the earliest blockchain-based digital assets include Litecoin, Namecoin, Feathercoin, and Peercoin. Some of them offered different algorithms, a new feature, or different amounts of tokens. For instance, the first scrypt coin was Tenebrix which led to the vast myriad of other coins that were supposed to be ‘ASIC proof,’ but that turned out to be untrue. Litecoin followed the idea of Tenebrix with its scrypt based algorithm and has remained a top ten contending cryptocurrency, valuation-wise, since its inception.
After Litecoin, other cryptocurrencies were introduced, like Peercoin which established the first proof of stake (PoS) consensus (although Peercoin also uses Proof-of-Work for important parts of its system). Primecoin pioneered a scientific computing proof-of-work system, and Bytecoin introduced the Cryptonote protocol for the first time. Following this, a wide range of different types of cryptographic value exchange methods were infused into cryptocurrencies like the X11 algorithm, proof-of-importance (PoI), the Quark algorithm, and the zerocash protocol. At the present time, there are 870+ digital tokens that are available to the public that can be found on an assortment of global cryptocurrency exchanges.
The Altcoin Landscape Shift and Ethereum’s Domination
The landscape of the highest valued digital assets is far different than it was in the early years. Now cryptocurrencies like Ethereum, Monero, Stratis, and Dash have been extremely profitable over the past year. Many of the market cap valuations for these digital assets are worth multi-millions and some of them billions, like bitcoin. Even older cryptocurrencies like Litecoin, Peercoin, Namecoin, and Feathercoin are still treasured assets. However the top twenty coins today are far different than they were during the first cryptocurrency craze of 2013.
Now cryptocurrency markets are worth more than ever before, and the Ethereum economy has more than half of the market share Bitcoin has, as the digital asset is currently worth over $300 per ether. At the time of writing, one ether’s value has to climb to a little over $510 to overtake bitcoin’s market capitalization. For the first time in history, the chance of this happening is becoming more probable. Furthermore, a vast amount of newer coins and even tokens created with Ethereum have gained immense value this year as well.
We Don’t Know What Will Happen, but in the Meantime, It’s Pretty Amazing to Watch
The fact is no one knows what’s going to happen to this growing environment of cryptocurrencies. Some believe it will continue to prosper and bitcoin and altcoins will become the new money of the future. While others believe only a few out of the hundreds of digital assets will survive, and some think bitcoin might not be one of them. Others believe that a broad range of altcoin valuations are in a bubble based on ICO fever and mere speculation on trading platforms. They think the bubble could pop at any moment, and it’s just matter of time when it does. All people can do is come up with their own cryptocurrency forecasts and try to tether that with present day information and data.
We currently can’t predict the outcome of how digital money will change society. However, we do know the way humans exchange value these days is clearly shifting directions, and bitcoin has pushed that envelope further. The environment bitcoin has produced brought about significant technical advances so far, and right now we seem to be witnessing the biggest transfer of wealth in decades. That’s a pretty amazing feat for a technology that’s less than ten years old, and it’s only going to get better.
What do you think about the growth of cryptocurrencies and digital money in general? Let us know in the comments below.