Historical data could help a lot in understanding cryptocurrency and its impact on the world. Similarly, studying it could help predict future price movements.
For example, at the end of the year, cryptocurrency prices tend to go down. One of the reasons behind it – business companies are able to sell their crypto assets at a lower price and list those as “capital losses” for beneficial tax purposes. Logically, they’d buy back their cryptos but those “capital losses” stay on record.
However, at some point, this is going to be a part of crypto’s history. On the other hand, as victorious ones are writing history, in case of crypto demise, no one will mention these moments.
Moreover, like my friend Hunter, they’d say they “knew it all along”. Or those stating that the original idea was theirs, but an unfortunate set of circumstances stopped them from pursuing it.
Whatever the case, the first step is understanding the past of crypto. Following is the building upon it and creating a future.
How it all started?
We can argue whether the credit card or the first electronic cash company was the beginning of crypto. Exaggerated, we can say that the origin of crypto coins comes from 6th century BC. 2,600 years ago is when the king of Lydia minted metal in a round shape – the first coin was made.
However, it is much better to connect it with the very beginning of the internet and DigiCash. At the time, the company founded in 1989, pioneered in e-cash and had some of the features of cryptocurrencies:
- Proprietary software
- Encrypted Keys
- Sending payments online
- Untraceable by outside sources
- “Cyberbucks” concept similar to currencies
Even though they filled bankruptcy in 1998, DigiCash paved the way for modern thinking on cryptography in payments.
The very same year that DigiCash left the arena, B-money, as a concept, entered it. Unlike the mixed success of DigiCash and great success of PayPal later on, B-money never even launched. But, it contributed with an additional set of thoughts on anonymous, private, and secure electronic cash systems.
Mystery of Bitcoin
Nowadays, the most famous anonymous character in the world is Satoshi Nakamoto, creator of Bitcoin.
Seemingly, the whole world would love to know his identity, as well as where are the first 1 million Bitcoins he mined from the beginning of 2009.
Moreover, some of the first Bitcoin developers doubt if this was a single person. One of these is software developer Laszlo Hanyecz. Besides stating that Bitcoin code is too good for one person to write, Laszlo is famous for… buying pizza!
Yes, Laszlo bought 2 pizzas with 10,000 Bitcoins in 2010! To mark this remarkable story, the Bitcoin pizza day is celebrated each year. At the moment of writing, this purchase is equivalent to close to $88,000,000!
As the original Bitcoin code is open-source software, anyone could use it to create new solutions. For those, waiting on something better, 2011 marked the rise of alternative coins. Or simply said, Altcoins.
One of these was Litecoin, bringing many improvements, including faster transactions.
From that point onwards, most cryptocurrencies were coming up with solutions for the transaction speed. As it was the Holy Grail of crypto acceptance, the transaction speed brought many other improvements.
First was the introduction of specialized exchanges, like later bankrupt Mt. Gox, that was launched in March 2010.
Followed by trading, Bitcoin reached $30 per BTC in June 2011.
However, Bitcoin went through a lot of turmoil. First, the price rising and falling. The same year, Bitcoin rose to $30 and then fell to $5. Second, people started associating Bitcoin with the black market as possible use of untraceable money. Of course, that wasn’t the initial idea behind Bitcoin.
Rise and Fall
With or without the black market, online markets started accepting Bitcoin. As a result, 2013 marked the year when Bitcoin reached $1,000. Again, ending the year at over $750.
Everything was working smoothly, but all of a sudden, the largest crypto exchange Mt. Gox was hacked, with 850,000 BTC stolen. At the time of the theft, February 2014, this was $460,000,000 of value. At the time of the writing it is $7,641,015,500!
Similar to the wheel that gets stuck in the mud, Bitcoin price collapsed from $950 in January to $200 in the following two years.
Bitcoin Wheels Keep on Turning
Ever since crypto is rising.
Of course, there was a period when the price reached almost $20,000 for one coin! It was the moment when Bitcoin reach its all-time high with $19,783 in value. Consequently, it was the time of a massive number of ICOs, as much as 50 per month.
However, some of those ICOs were fraudulent, again shadowing the benefits of crypto. Soon after, the market almost crashed, with prices falling during 2018 and partially 2019.
Nowadays, cryptocurrencies are back on track. Signaling they are here to stay.
As any technology has its ups and downs, I am crossing fingers that 2020 would bring stability. Similar to the rise of the internet, that could be the start of a new, blockchain era.
Undoubtedly, understanding cryptocurrency will help blockchain acceptance. But would the blockchain acceptance serve as a wind in the back for another crypto wave? And what would be that wave?
We are about to see. But, hopefully, the crypto market passed its infancy stage, entering a new era in its history.