The Future of Money? Issue 1
The History of Cryptocurrency
Omar Mahmoud
Embedded Files
We’ve all been hearing about Crypto and Bitcoin on the internet, news, and social media, but what exactly is cryptocurrency and how does it work?
That’s what I’ll cover in this series. I’ll explain the history of crypto, the science and technology behind it, and the different types of cryptocurrencies.
First, let me explain what cryptocurrency is.
The official definition of cryptocurrency is “[a] digital currency in which transactions are verified and records maintained by a decentralized system using cryptography, rather than by a centralized authority.”
Basically, crypto is a digital system of money (no physical bills or coins) where everything that is bought or sold is recorded. It is also protected using cryptography to avoid counterfeiting (copying something to make it look like the original) and secure transactions. The main thing about crypto is that it is a decentralized system. Meaning that there is no single governing authority such as a country or a bank controlling it, unlike most common currencies like the USD or Euro. That also means that you can send money directly to others without using a bank as a third party.
So, what was the idea behind cryptocurrency?
The first crypto ever made was Bitcoin, which is still the most popular today. It was created in 2009 by a person or group of people going by the pseudonym Satoshi Nakamoto. Few details about who exactly made this currency. Bitcoin was created in the wake of the 2008 financial crisis, where people got angry at banks and governments for one main reason: they were forced to trust banks and governments with their money. In essence, you didn’t really control your own money. That’s what the creators of bitcoin also realized.
Pros of Crypto
Accessible to everyone (anyone can mine it)
User anonymity
Independence from a central authority
High return potential on investments
No transaction fees
Cons of Crypto
Volatility (can change quickly and unexpectedly)
No government rules and authority (ex. no regulation if people commit crimes)
Irreversible (can’t undo a transaction, only the receiver can refund)
Limited use
In conclusion, crypto is a relatively new and interesting concept. It is (or could be) a helpful tool for society. But, like everything in the world, it has its benefits and disadvantages. Next time, I’ll talk about the technology behind crypto and how it works, specifically about blockchain and mining.
References
https://mint.intuit.com/blog/investments/pros-and-cons-of-bitcoin/
http://guardian.ng/technology/tech/the-idea-and-a-brief-history-of-cryptocurrencies/
https://www.analyticsinsight.net/beginners-heres-a-guide-to-know-everything-about-bitcoin/ https://money.usnews.com/investing/articles/the-history-of-bitcoin
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