By Pranab Kabiraj
An attempt to cover the origin of Bitcoin and the booming growth of blockchain technology.
The Irony…
Since the Bitcoin blockchain took its first breath in 2009, the whole financial system of the world has turned upside down. For the first time, people were able to make transactions or generate assets beyond Government or Banking controls. First, it was denied by the commons, then mocked by the experts of the financial world, then the governments all over the globe fought to ban it and today they all want to control it with regulations. And, thus, the very decentralized essence of cryptocurrency has fallen under the mercy of the Central powers.
A bit of crypto history!
Even before 2008 when the Bitcoin white paper was circulated by an anonymous group/person called “Satoshi Nakamoto,” many projects were given shape to develop digital currencies across the world.
The history of digital currency can be traced back to one man: American computer scientist and cryptographer David Chaum. In 1983 he developed a virtual currency with a transaction system and named it eCash. A few iterations and 12 years later, he developed another currency based on the same principle of cryptography and confidentiality and called it Digicash.
Later on, in the late ‘90s, other virtual currencies came into existence, the popular ones were B-Money and Bit Gold, which, though, were formulated but never fully developed for day to day usage by the people.
Well, as we know with the global economic meltdown of 2008, the value of gold and currencies crumbled drastically and the financial world went under turmoil, a few visionaries felt the need for a new economic system, something independent of governments and banks, highly secure, immutable and absolutely transparent. And hence, from a group of anonymous cryptography enthusiasts came the idea of ‘cryptocurrency.’ They decided to develop a new digital currency backed by permissionless decentralized ledgers, i.e., Blockchain Technology and circulated a white paper named ‘Bitcoin: A Peer-to-Peer Electronic Cash System’ to a mailing list in October 2008.
The journey started and the first Bitcoin was mined in January 2009 and a year later, on 22 May 2010, programmer Laszlo Hanyecz in Miami paid 10,000 BTC for a couple of pizzas, marking it on the history as the first purchase with the digital coins. And so the people’s interest in Bitcoin started building up.
With its gaining popularity, Bitcoin made it to the list on Japan’s crypto trading exchange Mt. Gox in 2011 for retail investors, and by the end of 2013, it handled around 70% of the total worldwide BTC transactions. The exchange was attacked and ransacked by the Hackers for more than 800,000 bitcoins, roughly the equivalent of $460 million at the time, the growth of Bitcoin never stopped, though tumbled many times.
As per Max Boonen, founder of the B2C2 trading platform, “At the time, Greece’s debt crisis and subsequent bailout spurred many wealthy investors to buy digital coins as a hedge of last resort. It was the first time that bitcoin was influenced by macroeconomic events, so it was quite significant.” The big names in the crypto universe as we know them as the Whales ‘hodled’ million of Bitcoins just before the 2013 bubble.
Later on by 2014, many alternate coins projects were developed which were basically forked over the Bitcoin blockchain. Namecoin, Litecoin and Peercoin, all using the SHA256 hash function became popular over the year. Over the years, thousands of projects came into being. Some developed for highly appreciated use-cases and some like Dogecoin were there just for fun and humor.
The most notable development came with the launch of the Ethereum Network by Vitalik Buterin. It represented the cutting edge of finance with its ability to carry out functions through basic code deployed over its network, which came to be known as Smart Contracts. Ethereum brought important innovations in blockchain and formed the basis for decentralized finance or DeFi markets.
The Story so far
Today, with over 10,000 crypto tokens in circulation represents a market of a humongous $2 Trillion. With research and innovation pouring in, new use-cases are coming out every other day. There are NFTs, DAOs, Meme Coins, Flash Loans, Metaverse and whatnot. Blockchain is no more just about transactions and recording ledgers, it represents a new era of the Modern Economy.
Even governments and corporates all over the world are no longer holding back when it comes to crypto.
Authorities are brainstorming to figure out ways so that they can control and regulate the decentralized economy. With concerns related to Hackers, Money laundering, Terrorist financing and Investors protection, financial institutions are finding ways to patch the loops and make the best out of it.
And what’s there in the future?
Every nation, big or small is trying to adopt or adapt to the Crypto. In fact, El Salvador has just bought the dip and accumulated a total of 1370 Bitcoins worth $70 million. Many are trying to treat them as assets, others are looking for solving issues. The world has gone crazy in the last 5 years. Painting of Apes are fetching millions, A single tweet is liquidating billions, Companies changing names and visions to sound more future-friendly and also billions of dollars lost to hacks in DeFi.
But the fact is, it is just the beginning of the Crypto Story. Even at the early stage, so much has happened, and with the evolution of Web3.0 and Metaverse, the potential is beyond any limit. With frameworks and regulations in place, even the governments and banks are placing their faith in it.
And definitely, the one with the right take can make the million dollars move. The future sounds interesting and can always expect the happening of the impossible.
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