Cryptocurrency is no longer a new concept, having now been making waves in the financial space for nearly 15 years. But still, we’re seeing a host of new alt-coins coming to market by the day, and interest in trading the biggest digital currencies, like Bitcoin and Ethereum, remains at an all-time high, with intuitive trading platform Qumasai reporting a steady number of new sign-ups each month of this year and other comparable platforms reporting similar.
In the ever-evolving financial world, there aren’t many innovations that have changed the landscape quite as dramatically as crypto, and this pioneer of the digital revolution has sparked a new era of investing, attracting more amateurs to trading than anything else has done in history to create a space where anyone and everyone is dipping their toe in and giving it a try.
In 2023, it’s hard to imagine a world before cryptocurrency exploded onto the scene – but where exactly did it all begin, and why has it been so transformative? Here, we take a look at how this revolutionary concept all began, and how it took us all by storm.
How cryptocurrency was conceived
Back in 2007 the idea of cryptocurrency had yet to even be conceived – at least, as far as we know. But just a year later, an individual or a group (we don’t entirely know which) published a whitepaper about Bitcoin under the pseudonym Satoshi Nakomoto, which floated the idea of a digital currency as a peer-to-peer electronic cash system – and it set in motion a chain of events that nobody could have predicted at the time.
Explaining the idea of a decentralised currency underpinned by a high-tech, secure network known as the blockchain, it was initially dismissed as ‘pie in the sky’ and something that would never catch on – but just two years later, in 2009, that all changed.
The birth of Bitcoin
In January 2009, Nakamoto mined the first block of the Bitcoin network, thus bringing Bitcoin as we know it today to life. Despite being a landmark moment in the financial world, at the time, it was still widely underestimated by the masses, with the world dubbing the concept little more than a passing fad. But in reality, it was a milestone that marked the beginning of a new era in fintech, and the first step in bringing Nakamoto’s vision of a financial system eliminating the need for intermediaries, such as banks and governments, to life.
As the world’s first decentralised digital currency, Bitcoin’s blockchain allowed users to send and receive funds directly, negating the need for a central authority – and it certainly piqued the interest of early adopters, even if the rest of the world would continue to snub it for some time.
A challenging start
It wasn’t all plain sailing from the word go, however, and convincing a global population of its long-term viability would go on to become one of the biggest challenges faced by pioneers. The fact that not everyone could see the potential of this disruptive technology was a stumbling block that would prove difficult to navigate, but slowly, a network or users – at that time largely limited to cryptography and computer science buffs – began to grow.
At the same time, concern was mounting amongst global financial institutions, as well as industry regulators, who saw Bitcoin’s decentralised nature as a potential target for criminals looking to conduct illicit activities undetected.
But when Bitcoin prices surged dramatically, making a number of early investors overnight millionaires, crypto finally got the world’s attention, and slowly but surely, we began to come around to the idea, despite ongoing concerns over its long term viability.
The expansion era
As Bitcoin’s popularity began to surge, the success of its underlying technology inspired the creation of alternative cryptocurrencies, which are now known as ‘alt-coins’. In 2011, a string of new alt-coins were introduced, perhaps the most notable of which being Ethereum, which is now the second biggest cryptocurrency in the world and is underpinned by one of the most promising and advanced blockchains of all, upon which virtual world the Metaverse is currently being developed.
Despite its strengths, Bitcoin did come with some limitations, and the idea of this new generation of cryptocurrencies was to overcome them. Along with Ethereum, Litecoin, Ripple and Bitcoin Cash all began to garner attention for their association with improved security and transaction speeds, making waves amongst forward-thinking traders who were beginning to see the long term viability of such assets.
Risky business
The crypto market is, and always has been, known for its volatility, with prices known to spike and crash dramatically over a relatively short period of time – and while for the risk averse, it’s too scary a prospect to invest in, for others, it’s the chance to make some serious gains if prepared to play the long game.
Major companies and financial institutions like Tesla and PayPal, as well as luxury brands like Gucci and Philipp Plein, have embraced cryptocurrencies in recent years, fueling further interest as it becomes apparent that there is a place for digital coins like these in our modern world, and as adoption grows, interest has continued to grow regardless of the challenges even the biggest cryptocurrencies have faced over recent years in the face of global economic uncertainty, scandals, and other stumbling blocks.
The future of crypto
As the world of cryptocurrency continues to evolve, nobody really knows what lies ahead, and many optimistic predictions about just how high the price of Bitcoin and the like could surge over recent years have failed to materialise.
Nevertheless, it seems that for now, crypto is here to stay, and investors prepared to play the long game could eventually be rewarded for their patience. Over the coming years, we can expect to see a tightening up of consumer protection, as well as yet more technological advancements, which together, could well propel the use of digital currencies like these even further into the mainstream.
Disclaimer: Investing money carries risk, do so at your own risk and we advise people to never invest more money than they can afford to lose and to seek professional advice before doing so.
