Cryptocurrency 10 years after Bitcoin

Cryptocurrency 10 years after Bitcoin

Cryptocurrency 10 years after BitcoinThe value of money is controlled by the Central Bank, you can physically see it and hold it and you can exchange it for services and commodities. Even though you can also send and receive it digitally, the fact remains that it is physical currency. Bitcoin, originally meant to be a peer-to-peer electronic cash system to prevent double spending, and not currency per say, was launched in late 2008, early 2009, by its inventor Satoshi Nakamoto, though not his real name. Bitcoin is not controlled by any entity or server, it does not have a physical form so you cannot hold it or see it, but it can be exchanged for goods and services digitally. It is digital currency and it is the world’s first form of cryptocurrency.

The turn of the 21st century brought the new age of digitalizing every aspect you can think of, seeking new ways to become untraceable. Cryptocurrency created just that. An anonymous way to transact business, virtually untraceable in most cases due to its uncrackable code, and secure enough that it may be the new future for money. The blockchain technology used for cryptocurrency transactions is basically a digital ledger which cannot be hacked, has no single point of failure and it is completely transparent. The question is, how is blockchain so secure in a world where hacking is becoming an increasingly popular career choice for most, bringing down entire economies at times?

Blockchain technology uses cryptography keys which creates your digital signature in the form of a private key that identifies with you, allowing you to digitally sign and authorize transactions, as well as a public key which does not give away your identity, only pointing the person you are conducting the transaction with to the address of your wallet where your cryptocurrency is stored, to be used for completing the transaction. Of course, if anyone has access to both your keys, then they can access all your digital assets, so private keys are meant to be kept safely.  Once a transaction is completed, it is added to the digital ledger of the blockchain and includes a digital signature, a public key, a unique ID and a timestamp. The public key is always random and it changes each time you do a transaction, making your identity virtually untraceable.

Transacting currency digitally is becoming progressively popular where persons now pay bills directly from their bank accounts, purchase commodities and transfer funds, all in the digital realm. With cryptocurrency, there is no middle man, that is, the banks. You are responsible for your own assets and you transact business with the person directly, albeit, without knowing who exactly you are transacting with. Nevertheless, blockchain technology would reduce costs and boost efficiency dramatically, and may even be the answer to reducing global poverty. All transactions are recorded and cannot be duplicated or changed since it is broadcasted to every node, thus lowering the rate of cyber-fraud and hacking. A cashless society is emerging and it all started from the Bitcoin invention a decade ago.

Bartering System to Cryptocurrency

Bartering System to Cryptocurrency

Bartering System to CryptocurrencyTrading first existed as bartering, where goods were exchanged for other commodities, with no significant value equivalence, merely for purposes of exchanging based on need. For instance, if I was a farmer and wanted to eat fish, I would visit a fisherman and exchange some of my provisions for some of his fish. Then man started mining metals. Metals were considered valuable due to its scarcity and was first traded in its raw form.

Eventually, in the third millennium BC, gold and silver were traded as currency and by the 7th century, the first mint was built in Turkey, to produce coins. Other nations followed suit and by the 10th century China began printing paper money causing inflation to skyrocket, and by the 15th century, paper money was abolished during the Ming dynasty. By the 16th to the 17th century, shells were minted as currency but by the 17th century, bank notes started to become the new way to trade, causing bankruptcy in addition to inflation.

The first banking systems were the temples that existed in the 18th century BC. Preciousmetals were stored in the temples because temples represented a sacred place and it meant to deter thieves from stealing. Throughout the 19th and the 20th centuries, money existed as gold and silver coins. When governments took over the banking responsibilities, paper money was used and coins were manufactured from other metals such as copper. The value of the paper money was determined by the Government and eventually, banking institutions started forming.

Banks looked for more innovative ways to carry around currency and eventually, checks were created. Customers could write large sums of money on these paper forms which acted as a promissory note for the exchange of money at banks. Then came the electronic age. Customers would be able to access their monetary assets held at the banks, via electronic machines that operated 24/7 once they had an access card. Telebanking also became famous whereby consumers can transfer funds, pay bills and find out the balance of their accounts, all through a telephone.Soon enough, Internet banking and online transactions became possible. Money could be transferred digitally to anywhere in the world but you could still physically withdraw money from your bank accounts.

In 2008 to 2009, the world’s first digital currency was created and called Bitcoin. This digital money could not be seen physically and could only be transferred via the Internet. Its value then was $0 but today it is worth over $6800 and growing. Bitcoin gave rise to cryptocurrency, known as the digital gold. There are more than 10 types of cryptocurrencies existing today, Bitcoin of course, being the most valuable. Unlike regular currency, banking systems do not exist for cryptocurrency, yet it is secure and maybe more valuable, created out of code and using blockchain technology.

Cryptocurrency would change the future of money which is constantly being devalued every day. The currency is still new but it is steadily gaining popularity and value. Sometime in the future, we may have a 100% paperless currency.