The coinmarketcap data shows that the total market capitalization of all the cryptocurrencies has reached more than $500 billion in December 2017. It started with just $1 billion at the beginning of 2017. Will the cryptocurrency continue its existence? The history of cryptocurrency provides some insights on the future of cryptocurrency coins and blockchain technologies.
A Short History of Cryptocurrency
The best cryptocurrency, Bitcoin, has always been at odds with fiat currency. As a result, those interested in blockchain technology have become involved in cryptocurrency and other forms of digital currencies because it provides opportunities for peer-to-peer payments outside government regulations.
These payment options are often cheaper than traditional methods as well.
One example is Coinbase, which enables users to send money from their bank account to an online wallet that can be accessed by phone.
This has significantly expanded how we use money today. Though some fear overuse and overall dependency on digital forms of money like Ethereum and Dash, no one can deny cryptocurrency’s ability to change lives worldwide… or even just individual lifestyles! More importantly, cryptocurrency is here to stay so you might as well get ready to adapt!
What is a cryptocurrency?
A cryptocurrency is a digital or virtual currency that uses cryptography for security. A cryptocurrency is difficult to counterfeit because of this security feature.
A defining feature of a cryptocurrency, and arguably its most endearing allure, is its organic nature; it is not issued by any central authority, rendering it theoretically immune to government interference or manipulation.
That said, no one is in charge for controlling a cryptocurrency and everyone can take part in monitoring transactions with complete transparency (e.g., blockchain) while also being a peer to peer network (i.e., decentralization). This makes cryptocurrencies more tamper-resistant than traditional currencies because anyone can check what’s on your mind at any given time.
Bitcoin, Litecoin, and Ethereum are some examples
These are a few cryptocurrencies that have made a name for themselves in 2017. Bitcoin, Litecoin, and Ethereum are three of many cryptocurrencies that have exploded onto cryptocurrency markets since early 2014.
Since their inception, these three coins have cemented their places as some of the most valuable cryptocurrencies available today. As with any type of investment, it’s important to carefully research before you buy; you don’t want to be caught unawares by a flash crash.
Of course, buying cryptocurrency isn’t an investment at all: cryptocurrencies hold no inherent value and aren’t backed by assets or fiat currency. Instead, cryptocurrency acts more like collectibles such as art: if you hold on to it long enough then—at least in theory—you might make money from it one day.
Who created cryptocurrency?
Despite cryptocurrencies’ short history of cryptocurrency, they have been created by a number of people. Many digital currencies have emerged since Bitcoin was founded in 2009; however, most have failed to make an impact on society.
Below are some notable groups or individuals that created or contributed to cryptocurrencies: Satoshi Nakamoto – The creator (or creators) of Bitcoin is a mystery that has not yet been solved.
Satoshi first introduced cryptocurrency in 2008 with their paper Bitcoin: A Peer-to-Peer Electronic Cash System. It is widely believed that he (or she, or they) mined around 1 million bitcoins before disappearing from online forums and websites sometime in 2010.
The creator’s true identity remains unknown today, although there are still many efforts to uncover his real name.
why was cryptocurrency created
By 2009, a mysterious programmer known as Satoshi Nakamoto introduced Bitcoin. This cryptocurrency, created and held electronically, was not tied to any banks or governments but could be used to buy things anonymously.
It quickly gained a following—and skepticism from many experts who worried that it was too good to be true. One year later, in 2010, another cryptocurrency emerged; Litecoin aimed to improve on bitcoin’s flaws and promised transactions that were faster and cheaper.
Many cryptocurrency copycats followed: Dogecoin (an Internet meme), Namecoin (for decentralized Web sites), Peercoin (optimized for security) and Feathercoin (which promised low fees). The list goes on.
What are altcoins?
With cryptocurrency prices continuing to rise, there are new digital currencies being created and exchanged at a frantic pace. If you’re looking to buy an altcoin, chances are that exchange will support most—if not all—of these coins.
You just need to find one that matches your needs. For example, if you’re into online gambling, many exchanges have recently added a list of popular casino tokens such as FunFair and Edgeless.
Others have followed in Ripple’s footsteps by promoting themselves as banks for people who want to use their cryptocurrencies more like cash by using P2P exchanges. Make sure you do your research before buying any altcoin and know exactly why you’re getting involved with it in the first place.
Market capitalization, liquidity, etc.
The problem with most cryptocurrencies is that they are too volatile to be used as currencies. That makes them almost like playing gambling, which has no place in business. By focusing on market capitalization and liquidity, you can eliminate some serious risk factors.
Market capitalization refers to how much a cryptocurrency is worth (based on its current market price). Liquidity refers to how easily something can be bought or sold without affecting its price significantly. Only a handful of cryptocurrencies have achieved both market capitalization and liquidity – namely Bitcoin, Ethereum, and Litecoin.
Where can you trade cryptocurrencies?
Today, cryptocurrencies are primarily traded on exchanges. These exchanges operate similarly to conventional stock markets. Exchanges are platforms where buyers and sellers can trade cryptocurrency tokens.
The main difference is that there is no centralized operator such as a stock exchange or a central bank behind any cryptocurrency market.
Instead, cryptocurrency trading occurs directly between users (peer-to-peer) through an order book. At times, it can be difficult to differentiate which service is an exchange and which one isn’t.
Some useful information about initial coin offerings (ICOs)
ICO stands for Initial Coin Offering. You can think of an ICO as a token sale where tokens are exchanged for cryptocurrencies like Bitcoin, Ethereum, and ZCash. Typically they are used to support products based on blockchain technology.
To participate in an ICO, you need to use Bitcoin or another cryptocurrency to make your purchase in exchange for tokens (aka coins) that give you access to whatever it is that project is offering.
For example, if you want to invest in a new social media platform using blockchain technology, then buying into their ICO will give you tokens that represent ownership of their product. The value of those tokens will rise and fall depending on how well their product does.
If it’s successful, then those tokens could be worth more than what you paid for them during the ICO phase. It’s similar to buying stock in a company except with no regulation or oversight from any central authority.
However, there have been instances where companies have turned out to be scams after running successful ICOs, so buyer beware!
Read: How to Invest in Cryptocurrency | 5 Tips Cryptocurrency Investor Must Know
