Cryptocurrency is the new type of electronic money that has transformed the financial industry. It has facilitated payment processing making a person-to-person transfer of funds easier, cheaper, and faster. Still so many do not know how cryptocurrency came into existence. Some think Bitcoin was the first cryptocurrency created, you are going to find out other digital assets that were created before Bitcoin.
What is Cryptocurrency?
Cryptocurrency is an electronic way of storing money or values and making payments from person to person without the user’s name, bank, or third party. This activity runs through a decentralized technology on a distributed ledger known as the blockchain. It stores an immutable record of all transactions processed.
Cryptocurrency is also known as a digital asset, virtual asset, digital currency, or virtual currency. Cryptocurrency is the latest evolution of money, transforming money and payment processing into a frictionless and seamless experience.
Sequel to the digital age, transactions were made either in fiat currency, goods, or checks. Now, money has been digitized, people can make payments online. There are many online payment processing platforms, such as Paypal, Payoneer, Square, Transferwise, and more. These systems represent the central form of digital money.
The cryptocurrency revolutionized digital money by decentralizing the accounting processes, banks, the government, and third parties cannot control this system which works by sharing the account balances and transactions of every user on the globe via a computing network called the blockchain.
Which Were the First Cryptocurrencies Created?
During the tech boom in the 90s, before Bitcoin was created, other digital assets were created. The systems are known as Flooz, Beenz, and DigiCash emerged in the market, but they failed due to mismanagement.
Some of the reasons they failed include fraud, financial problems, and management issues.
That means the companies behind the digital assets verified and facilitated the transactions. This failure caused a break in the pursuit of digital currency before Bitcoin creation.
Who Created Bitcoin?
A group of programmers known as Satoshi Nakamoto introduced Bitcoin on October 31, 2008, when Bitcoin Whitepaper was published. The first line defined bitcoin as a peer-to-peer version of electronic cash which could allow online payments to be sent directly from one party to another without going through a financial institution.
Bitcoin Network was launched on January 3, 2009, and it became the first cryptocurrency that survived. The Bitcoin software was available to the public for the first time, after the launch. Then mining which is the process of creating new Bitcoin was introduced.
First 10,000 Bitcoin Sold for 2 Pizzas?
In 2010, Bitcoin was valued for the first time, though it was difficult to equate its unit in monetary terms since it was never traded only minded. Some people decided to sell their own for the first time, so they exchanged 10,000 Bitcoin for 2 pizzas.
At press time, 1 BTC is worth $43,590.00 according to www.coinmarketcap.com.
How Cryptocurrency Became Popular?
In 2011, Bitcoin became popular due to its decentralized nature that is different from other payment methods. But it has one major issue, at the time the proposal was made, an observer, James A Donald, said “it does not scale to the required size.” This means Bitcoin processes fewer transactions in a second compared to other available payment methods.
The network could only process 7 transactions in a second. It was not regarded as a serious issue at the beginning, as its awareness increased, millions of people adopted Bitcoin, the network struggled to cope with the number of transactions.
Bitcoin Major Issue Lead to the Creation of Altcoin
Scalability became Bitcoin’s major issue right from the beginning. This issue tends to defeat the primary aim of Bitcoin creation, to make a person-to-person transfer of money a better experience. It needs to perform better as an alternative to the already existing payment systems.
Bitcoin popularity also attracted other interests to the emerging market of cryptocurrency and blockchain. This lead to the creation and launch of Alternative Coins known as Altcoins.
Decentralization is the major strength of Bitcoin and also an attraction for other interests in Cryptocurrency. Altcoin improved upon bitcoin design and scalability issues to offer greater speed.
The first set of altcoin to emerge were Namecoin and Litecoin, presently there are thousands of Altcoins in circulation with new ones frequently springing up.
Among the altcoins created, the one that came close to taking the Bitcoin position is known as Ethereum.
How Was Ethereum Created?
Ethereum was created by a Russian-Canadian programmer and writer, Vitalik Buterin. Its platform uses cryptocurrency known as Ether to facilitate blockchain-based smart contracts and applications.
Etheruem’s proposal was made in late 2013 by Vitalik, its development was funded via online crowd sale between July and August 2014.
The system went live on July 30, 2015, with 72 million worth of Ether.
Etheruem growth was rapid and through it, so many Altcoins emerged. The first and second stages of cryptocurrency creation involved the creation and survival of Bitcoin. The emergence of Alternative Coins improved upon Bitcoin’s scalability issues.