The story of bitcoin
Bitcoin : From the cradle to the moon
Bitcoin is a widely known digital currency, and also believed to be the first cryptocurrency…or is it?
Starting from the cypherpunk era in the 80s – so-called the online privacy and cryptography activists – few digital currencies attempted to gain popularity, but in vain.
In the late 80s, the IT scientist David Chaum released a paper about DigiCash, a cryptography based electronic currency. The user could deposit cash in the bank, and get in return, a cryptographic signed paper, that contained the transaction proof. This signed paper could be used to buy something in a shop accepting digital cash.
This shop could then claim the money from the bank through this signed paper. DigiCash was fully implemented in 1990, but went bankrupt 8 years later. DigiCash was barely supported by banks, the user base hardly grew and market was not mature for it. Nevertheless, this attempt put some seeds in many heads and certainly influenced the future.
E-gold in 1996, was an anonymous digital gold currency. Users could instantly send e-gold to other e-gold users. Based on digital ownership transfers and maintained on a public-ledger, the company passed the million open accounts in 2004 and peaked in 2006 with a 2 billion USD turnover. As E-gold had to comply with money laundering policies, and lost traction anonymity was compromised. After many regulatory issues, E-gold was shut down few years later by the US government.
Beenz and Flooz were introduced in the late 90s. Two digital currencies competing and described as e-commerce money. The lack of demand from the customers resulted in a startup failure.
A step further towards decentralisation
In the late 90s, Wei Dai, a well known cypherpunk, released a paper about b-money. It was the first anonymous electronic currency relying on a distributed ledger. However, the project did not go much further.
Bit gold was released by Nick Szabo in 1998, it was quite similar to the first release of bitcoin, but had a vulnerability to Sybil attack.
Unlike bitcoin’s block creation relying on Hashing power(Proof of work), Bit gold relied on a majority of nodes for the validation of the blocks. Someone could easily create multiple nodes and control 51% of the network. Because of this flaw, the project did not take off.
10 years later, Wei Dai was contacted by Satoshi Nakamoto, when the latter was working on Bitcoin in 2008. B-money was cited in Satoshi’s whitepaper regarding public and trustless transactions. Bit gold, as close as it was from bitcoin was curiously never mentioned. Some believe that Nick Szabo is closely related or could be Satoshi Nakamoto.
Bitcoin, massively adopted
Relying on an anonymous distributed ledger and a cryptographic proof of work, bitcoin, a working concept, gained more and more confidence across the years.
In the early adoption of bitcoin, on May 22nd 2010, someone bought 2 pizzas for 10 000 BTC. This transaction sealed in the blockchain forever, is going to make those 2 pizzas the most expensive in human history.
Today Bitcoin is and remains the most used cryptocurrency in the entire crypto market and soon enough, one could buy 10 000 pizzas with 2 bitcoins.
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