Cryptocurrencies, or virtual currencies, are digital means of exchange created and used by private individuals or groups. Because most cryptocurrencies aren’t regulated by national governments, they’re considered alternative currencies — mediums of financial exchange that exist outside the bounds of state monetary policy.
Bitcoin (BTC) is the preeminent
cryptocurrency and the first to be used widely. However, hundreds of
cryptocurrencies exist, and more spring into being every month. Non-Bitcoin
cryptocurrencies are collectively known as “altcoins” to distinguish them from
the original.
Satoshi Nakamoto: the creator of the first cryptocurrency
The story of these virtual coins
begins with one person: the cryptographer David Chaum. In 1983, the Americans
developed a cryptographic system called eCash. Twelve years later, he developed
another system, DigiCash that used cryptography to make economic transactions
confidential.
However, the first time the idea or
term "cryptocurrency" was coined was in 1998. That year, Wei Dai
began to think about developing a new payment method that used a cryptographic
system and whose main characteristic was decentralization.
In 2009, the
so-called Satoshi Nakamoto a person whose identity is still secret created the
first cryptocurrency, Bitcoin. As you have already read, he was not the first
person who came up with the idea to create it. What was the intention behind it
- To create a new way of payment that could be used internationally, decentralized,
and without having any financial institution behind it.
What drove
him to create his cryptocurrency was that big economic crisis that affected
millions of citizens. Also, the need to make people see that there is another
type of money, which is not the conventional one that you can also use and
benefit from it.
What is the current status of cryptocurrencies?
The use and
investment in cryptocurrencies are increasing. Its beginnings were not good,
society did not trust much this new form of payment, however, and over time
that concept has changed. Many companies already use it, they allow the payment
of their products and services with these virtual currencies and they even
create their own.
The Future of Cryptocurrency
It appears
that cryptocurrency is on track for more widespread adoption. While there may
be some changes and bumps in the road along the way, cryptocurrencies and
blockchain technology are likely to continue to grow in popularity.
It has the
attention and support of major investment banks like Goldman Sachs and JP
Morgan. It isn’t just some crazy meme for nerds on the internet. It’s a risky
investment opportunity that’s gathering interest and recognition across the
world.
Mathew
McDermott, the London-based Goldman Sachs managing director of its digital
asset team, told Financial News that “we’ve crossed a line” into an era of
adoption in which cryptocurrencies are a widely accepted store of value and
hedge.
There’s no saying if cryptocurrencies will outperform or underperform traditional assets. But there’s little doubt that Bitcoin and other cryptocurrencies are here to stay.
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