When and why was cryptocurrency created
When the world’s financial crisis was raging, the first cryptocurrency – Bitcoin (BTC) – came to the scene. On October 31, 2008, an unknown person or perhaps a group of people under the alias Satoshi Nakamoto published a paper called “A Peer-to-Peer Electronic Cash System”, first describing the technology underlying Bitcoin, the blockchain, which was used later to run also other cryptocurrencies.
The name Bitcoin saw the light of day a little earlier, on October 18, 2008, when a domain called bitcoin.org was registered on the Internet. In addition to Satoshi Nakamoto, Martti Malmi, one of the original Bitcoin developers, also co-owned it. Today, Martti Malmi only manages the bitcoin.org and bitcointalk.org domains.
The bitcoin network launched on January 3 2009, when the first block of Bitcoin, the so-called Genesis block was mined. The smallest unit of Bitcoin was named after Satoshi Nakamoto – 1 satoshi = 0.00000001 BTC. The total number of bitcoin coins has been set at 21 million; currently, over 18,900,000 are in circulation.
There were probably several reasons for the development of cryptocurrencies. The primary motivation was three consecutive crises in quick succession since 2000. The popping of the so called dot com bubble was followed by a real estate market collapse, with the banking sector crisis coming shortly after. During the first ten years of this century, we went through three more severe crises than what was the infamous stock market crisis of 1929.
People stopped with trusting national currencies and turned their hopes to cryptocurrencies. The increasing number of state interventions in financial operations is also not very pleasing. People wanted back their right to decide on their own finances. And so Bitcoin and later other alternative coins – altcoins – were created to help them.
Features of cryptocurrencies
Cryptocurrencies are an alternative to inflationary fiat money and an outdated banking sector. It meets several conditions of well-functioning currency:
1. it is independent on the state institutions
2. it can be used globally
3. transactions take place in the order of minutes
4. it is not subject to inflation
5. it cannot be falsified