Crypto currency - an introduction
Way back in1983, an American cryptographer called David Chaum conceived an electronic currency called ecash, then in 1995, he implemented it using digicash a type of cryptographic electronic payment which needed specific software to withdraw notes from a bank and designate encrypted keys before it could be transferred to a recipient. This allowed the digital currency to be untraceable by the issuing bank, the government, or any third party.In 1996 a paper published by the National Security Agency entitled How to Make a Mint: the Cryptography of Anonymous Electronic Cash, described a Cryptocurrency system, first publishing it in an MIT mailing list and later in 1997, in The American Law Review.
Later in 1998, a specification of ‘b-money’ was published by Wei Dai, this ‘b-money’ was characterised as an anonymous distributed electronic cash system. Soon after Nick Szabo described ‘bitgold’, like Bitcoin and other cryptocurrencies that would follow, bitgold was described as an electronic currency system which required users to complete a function with solutions being cryptographically compiled and published.
The first decentralised cryptocurreny, Bitcoin came in 2009, Bitcoin was created by Satoshi Nakamoto (his pseudonym). In 2011, Litecoin was created and then another Peercoin.Satoshi had a vision of a currency that was not regulated or centralised and not controlled by any single country or bank, anyone anywhere could use the cryptocurrency and because of the architecture of the blockchain technology, no one could ever change or break the technology.
As all of the contributing nodes (bitcoin miners) were effectively adding to the blockchain for every transaction, there could be no single point of attack that could damage the immutable record. Bitcoin initially was shunned by the majority believing it would come to nothing and that the currency would never become the digital currency that it promised.
The purchasing of Bitcoin in the early days also was not straightforward with many hoops to jump through to purchase and hold the crypto currency. Bitcoin is now easily traded on the exchanges and has been adopted by financial institutions as well as retail investors, it is speculated that as a result of the limited supply of bitcoin and it’s similarity to gold as a store of value it could reach $1M per bitcoin in just a few years from now.
Many cryptocurrencies have been created since bitcoin, coined (forgive the pun) as altcoins, these coins have been created with specific purposes the most common is to have programmable or smart contract functionality.Currently the leading smart contract altcoins by market capitalisation are Ethereum, Binance, Cardano and Avalanche, they differ from Bitcoin as they are programable cryptocurrencies and this means for example that when a purchase is made with them, all of the pertinent information and even contract detail (in purchasing real estate for example) is stored on the blockchain for that specific transaction, this information is immutable, there forever recorded and available to view in a blockchain explorer.