Contents
A look at the history of cryptocurrency and how it was invented to provide a secure way of online transactions.
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Introduction
Crypto 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 biggest allure, is its organic nature; it is not issued by any central authority, rendering it theoretically immune to government interference or manipulation.
The Origins of Bitcoin
Bitcoin is a decentralized digital currency, without a central bank or single administrator, that can be sent from user to user on the peer-to-peer bitcoin network without the need for intermediaries. Transactions are verified by network nodes through cryptography and recorded in a public distributed ledger called a blockchain. Bitcoins are created as a reward for a process known as mining. They can be exchanged for other currencies, products, and services. As of February 2015, over 100,000 merchants and vendors accepted bitcoin as payment.
The first wallet program was released in 2009 by Satoshi Nakamoto as open-source software. The first transaction took place between Nakamoto and an early adopter of the currency, and occurred on January 12th, 2009. This block is often referred to as the genesis block.
The Origins of Ethereum
Ethereum was proposed in 2013 by Vitalik Buterin, a teenager who was passionate about cryptocurrencies and wanted to create a platform that would be more than just a digital currency. He was inspired by Bitcoin, but he saw the potential for so much more.
Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of fraud or third party interference.
The Ethereum network went live on July 30th, 2015 with 72 million ETH pre-mined.
The Origins of Litecoin
Litecoin was created by Google employee and former Coinbase engineer Charlie Lee in 2011. It was inspired by bitcoin and is nearly identical to it in many ways. The main difference is that Litecoin has quicker transaction times and a different mining algorithm.
Lee announced his intention to create Litecoin on Bitcointalk, a bitcoin forum, in October 2011. He released the Litecoin software on GitHub the following month. The first litecoins were mined in January of 2012.
In May of 2017, Litecoin became the first of the top 5 cryptocurrencies (bitcoin, ethereum, ripple, and dash) to adopt Segregated Witness (SegWit), a soft fork that helps to improve transaction speed and efficiency.
The Origins of Monero
Monero is a digital asset similar to Bitcoin that places a strong emphasis on privacy and anonymity. It was originally released in 2014 under the name BitMonero, which was later shortened to simply Monero. While the original Monero team is largely anonymous, it is known that several key members were involved in previous cryptocurrency projects, most notably Bytecoin.
Monero’s privacy features are based on a protocol called CryptoNote, which was originally designed by Nicolas van Saberhagen in 2012. CryptoNote uses a number of different mechanisms to conceal user data, including “ring signatures” and “stealth addresses.” These features make it very difficult (if not impossible) for outside observers to link Monero transactions to specific users.
In addition to its privacy features, Monero is also notable for its use of a proof-of-work algorithm called CryptoNight. CryptoNight was designed to be resistant to ASIC mining (i.e., it cannot be efficiently mined with special purpose hardware). This means that Monero can still be profitably mined with CPUs and GPUs, which gives individual miners a much better chance of earning rewards.
Conclusion
Cryptocurrency was invented in 2009 by an anonymous person or group of people known as Satoshi Nakamoto. Bitcoin, the first and most well-known cryptocurrency, was the first application of the Blockchain technology.
