When did cryptocurrency start? This is a question that many people ask in various crypto spaces. This is because cryptocurrency has become such a popular topic of discussion in the world.
New coins are being made every day and popular ones have been widely adopted as a way to make payments. That’s why in the past we covered the history of cryptocurrency.
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Big companies such as Tesla now accept cryptocurrency in their payment, not to mention the world’s largest payment platform – PayPal has also included cryptocurrency in its list of accepted currencies.
With this widespread adoption, the question of when did crypto start continues to linger in many people’s mind – for a good reason.
Where Does Cryptocurrency Come From?
The cryptocurrency story begins with a cryptographer known as David Chaum. In the 1980s, he came up with a theory that would revolutionize payments. Chaum’s idea was to create an electronic currency known as ecash and then use it as a replacement for physical money.
Credits: David Chaum
In 1990, Chaum went on to create an online financial service provider called DigiCash which was supposed to make it easier for people who had no access to banks or ATMs to send money electronically across borders. However, in 1998 he left his company because the business venture did not generate enough revenue for him personally – though they still exist today under new management as a virtual credit card firm known as MonetaGo.
The next big development in cryptocurrency happened later that year when Wei Dai put forward b-money with some ideas about how public keys could be used for anonymous transactions between individuals without any third party being involved at all. This is what first got Hal Finney interested so he proceeded.
Credits: David Chaum team at DigiCash
In 2008, Satoshi Nakamoto published his white paper titled “Bitcoin: A Peer-to-Peer Electronic Cash System” which outlined how Bitcoin would work. Bitcoin is one type of cryptocurrency or digital asset (crypto). He also mentioned some other ways cryptocurrencies could be used such as time stamping documents without running into problems with third parties being able to deny its validity. This became very popular because it solved the problem of how to distribute trust.
Since then, there have been many other cryptocurrencies created and each one has its own set of rules on what is required in order for a transaction to be verified by miners. This ensures that no fraudulent transactions will occur. There are also some crypto protocols which allow cross-chain atomic swaps so they can perform decentralized trading without having to use centralized exchange platforms.
The idea behind cryptocurrency is not just about digital assets but rather an entire ecosystem where users control their wealth within a certain system with specific parameters (such as Bitcoin).
Were There Cryptocurrencies Before Bitcoin?
Bitcoin may be the most popular cryptocurrency but it is not the first one to exist. There were many attempts to create cryptocurrencies before, including:
Early Attempts in the Netherlands
Perhaps the earliest known example of cryptocurrency was in the Netherlands. Due to theft in petrol stations, a group of developers decided to create a token which could be used as a replacement for cash. This token allowed motorists to pay for fuel using smartcards, and this ensured there wasn’t any money lying around in the stations. This is, without a doubt, the earliest attempts at creating a cryptocurrency.
Blinded Cash
We cannot answer the question of when did digital currency start without mentioning David Chaum, who we mentioned earlier, created a project called Blinded cash. The idea was to create an electronic currency that would be difficult for authorities or hackers to track down. He developed eCash in the 1980s.
Nonetheless, eCash was not a completely decentralized currency – it had to be approved by a central authority in order for transactions to go through. This isn’t exactly what we would call cryptocurrency because of this aspect. Later in 1998, he developed DigiCash which was more of a digital cash, rather than just cryptocurrency.
B-Money and Crypto Anarchists
The next big development which will help us answer the question of when did crypto start came from Wei Dai. He introduced b-money with some ideas about how public keys could be used for anonymous transactions between individuals without any third party being involved at all.
Hal Finney picked up on these ideas and started working on his own version which he called RPOW (Reusable Proof of Work). These were two different approaches but both were focused around cryptocurrencies that didn’t require any kind of centralized institution or trusted third party to verify them.
The Bitcoin white paper that was published in 2008 by Satoshi Nakamoto is what first got Hal Finney interested. You can read more about Satoshi here.
He proceeded to create b-money and also RPOW which had similarities with bitcoin but wasn’t the same as it did not have a blockchain for public transactions. It was, however, an important predecessor of Bitcoin because it helped pave the way for more developments later on.
Bit Gold
Nick Szabo created a project which he called Bit Gold and this served as the basis for what Bitcoin has become today. He wrote about it in 2005, with the idea being that we needed to find an answer to questions surrounding digital property rights.
Szabo wasn’t able to come up with all of the details on how his idea would work, but most of the aspects he proposed are very similar to what you see when dealing with Bitcoin transactions nowadays. Decentralization, blocks containing timestamps and data, rewards proposed by miners who update these blocks using computational where they need specialized hardware (ASIC) chipsets.
Even though his project wasn’t successful, we can see the beginnings of what would eventually become cryptocurrency as we know it today.
What Was The Idea Behind Cryptocurrency?
The main idea behind cryptocurrency was to create a system where money could be stored digitally without the need for any third parties.
This would prevent corruption, fraud, and other problems which were rampant in traditional financial institutions.
That is why cryptographers keep developing the best encrypted apps for cryptocurrencies in order to avoid frauds and keep their assets safe.
Finally…What is the Future of Cryptocurrencies?
Now that the question of when did cryptocurrency start has been answered, it’s prudent to understand what the future holds for this revolutionary technology. Cryptocurrency is still in its infancy and so it’s hard to make predictions about what the future will hold.
One can only hope, however, that this new way of exchanging money will be able to supplant traditional methods which have been a cause of many financial challenges over time.
Click here to read more about the future of cryptocurrencies.
Key Takeaways
- The father of cryptocurrency is David Chaum, who came up with the idea in the 1980s to revolutionize payments;
- DigiCash was the first sort of digital currency, created by Chaum’s team of cryptographers.
- Bitcoin wasn’t the first cryptocurrency, there were several other attempts, but without any major success.
- The future of cryptocurrency passes for the acceptance of crypto payments by major retail brands and banks.
Final Thoughts
Cryptocurrencies started from the minds of cryptographers that had the idea of creating one kind of currency that would be decentralized from the government and conventional banks.
We are sure that the first developers were not prepared for the revolution in the last years, with several currencies being born everyday.
Nowadays at the distance of a click you can store, trade, buy crypto in something as simple as a phone app. For example, you can do all this if you download Tezro app! Yes, it’s that easy!
