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CRYPTOCURRENCY: HISTORY, PRESENT AND FUTURE

Cryptocurrency is a digital asset designed to be a medium of exchange that uses cryptographic technology to secure its transactions, to control the creation of additional units, and to verify the transfer of the assets.

As opposed to centralized electronic money and central banking systems, cryptocurrency uses decentralized control. 

The decentralized control of each cryptocurrency works through a blockchain, which is a public transaction database, functioning as a distributed ledger.

The validity of each cryptocurrency’s coins is provided by a blockchain.

A blockchain is a continuously growing list of records, called blocks, which are linked and secured using cryptography.

Decentralized Control

Cryptocurrencies are also marked by decentralized control.

The supply and value are controlled by the activities of their users and highly complex protocols built into their governing codes, not the conscious decisions of central banks or other regulatory authorities.

Finite Supply

Cryptocurrencies are generally characterized by finite supply. Their source codes contain instructions outlining the precise number of units that can and will ever exist. Over time, it becomes more difficult for miners to produce cryptocurrency units until the upper limit is reached and new currency ceases to be minted altogether.

Cryptocurrencies’ finite supply makes them inherently deflationary, more akin to gold and other precious metals – of which there are finite supplies – than fiat currencies, which central banks can, in theory, produce unlimited supplies.

Early History of Cryptocurrency

Cryptocurrency’s technical foundations date back to the early 1980s when an American cryptographer named David Chaum invented a “blinding” algorithm that remains central to modern web-based encryption. The algorithm allowed for secure, unalterable information exchanges between parties, laying the groundwork for future electronic currency transfers. This was known as “blinded money.”

By the late 1980s, Chaum enlisted a handful of other cryptocurrency enthusiasts in an attempt to commercialize the concept of blinded money. After relocating to the Netherlands, he founded DigiCash, a for-profit company that produced units of currency based on the blinding algorithm. Unlike Bitcoin and most other modern cryptocurrencies, DigiCash’s control wasn’t decentralized.

Shortly thereafter, a Chaum associate named Nick Szabo developed and released a cryptocurrency called Bit Gold, which was notable for using the blockchain system that underpins most modern cryptocurrencies. Like DigiCash, Bit Gold never gained popular traction and is no longer used as a means of exchange.

Pre-Bitcoin Virtual Currencies

After DigiCash, much of the research and investment in electronic financial transactions shifted to more conventional, though digital, intermediaries, such as PayPal.

In the United States, the most notable virtual currency of the late 1990s and 2000s was known as e-gold. Its customers, or users, sent their old jewelry, trinkets, and coins to e-gold’s warehouse, receiving digital “e-gold” – units of currency denominated in ounces of gold.

 

At its peak in the mid-2000s, e-gold had millions of active accounts and processed billions of dollars in transactions annually.

Future of Cryptocurrency

  • The cryptocurrency market, which trades various digital-based coins, can look exciting, scary, and mysterious all at once to the casual observer.
  • “Cryptocurrency is very much here to stay,” said futurist and author Thomas Frey, noting that he’s speaking to the Federal Reserve in September on the topic. He predicts that “cryptocurrencies are going to displace roughly 25% of national currencies by 2030. They’re just much more efficient, the way they run.”
  • “I see crypto investments similarly to how I see traditional investments in stocks and bonds, which go through cycles,” Canton said. While “there is more volatility in cryptocurrencies,” he added, “it’s a worthy area for people to experiment with their investment portfolios really carefully.” Frey added.
  • The rise of cryptocurrencies over the past couple years represents “the legitimization of a new asset class emerging alongside the traditional global economy,” according to Dr. James Canton of the Institute for Global Futures. “I’d say you can expect an exponential increase of new investment vehicles to come from crypto finance.”
  • According to Daniele Bianchi, Assistant Professor of Finance at Warwick Business School, we should expect a “great deal of diversity in the way regulators deal with cryptocurrency trading.”
  • “Increasing value and legitimacy of cryptocurrencies is not only good for investors but also brings attention from regulators and policymakers,” Bianchi told ZDNet
  • Simon Yu, CEO of blockchain startup StormX, says, “Millennials are particularly open to embracing new technology in order to create opportunities for themselves and blockchain, the tech behind crypto, is no different. As masters of the side hustle and challenges of the traditional 9-5 working lives of previous generations, millennials are welcoming blockchain with open arms.”

Top 10 Myths About Bitcoin and Cryptocurrency

Bitcoin is a very popular cryptocurrency, and has been around for about 10 years now.

But still, there are plenty of myths about Bitcoin and the technology behind it, among the general public all around the world.

There are the most popular ten different myths about Bitcoin
  • Bitcoin Is Not Secure:- There are many different stories crypto exchanges and the wallet to store the coins that these are easily hacked by the hackers So the users believe that investing in cryptocurrency is not secure. Bitcoin is the oldest cryptocurrency and the infrastructure behind bitcoin is very secure and never been hacked. There are different ways to secure storage of coin in form of online and offline swiss wallet.
  • Bitcoin Is Anonymous:-Bitcoin is also called anonymous cryptocurrency. In an easy way we can say that Bitcoin addresses are pseudonymous means there is an identifiable address for every user on the network but it’s not easy to know who is behind each address. The important thing to be remembered that In Bitcoin, All transactions are recorded on a public ledger and the transaction have been made are viewable to all on the network and many of these transactions have leaked their IP. Bitcoin is far from an anonymity 
  • Bitcoin’s Price Volatility:- The Most common myth about the Bitcoin is Price Volatility that makes It Useless. Its true the Bitcoin has a volatile history that’s the reason users define it as a store of value instead of a digital currency or commodity.
  • Bitcoin Is Transparent:-It’s also a very myth about the Bitcoin is about its transparency. It’s true that the actual identities of the user behind any specific address of Bitcoin are always hidden. And various exchange also pays attention to privacy-enhancing services and allow users to enhance the privacy of the blockchain. So we can say that it’s between the two extremes of completely anonymous or completely transparent. 
  • Bitcoin is only a Currency:-Currency is the exchange of value that is scare and divisible. Bitcoin is something simple and innovations in currency as its more than simply a currency. As bitcoins can be run used to send many forms of data such as contacts, messages, and more. It can be used to buy the goods and services. 
  • Bitcoin is not backed by anything:-People who don’t have an idea about the decentralization and digital payment system because they don’t have knowledge about the value of it they take it as worthless payment system because they aren’t backed by anything. There are different opinions about the bitcoin. Some people believe that the scarcity of bitcoin is the main attribute of its value some others say that bitcoins are useful because of world’s most prominent and secure decentralized ledger.
  • Bitcoin Is used for Illegal Purpose:- The fight is going on about the illegal and legal transactions. People believe that Bitcoin is used by many markets like drug market, the black market for trading as an ideal currency.
  • Bitcoin Is a Ponzi Scheme:-Most of the people call Bitcoin a Ponzi scheme but this is totally far away from the truth because a Ponzi scheme always requires new people to leave their money in order to pay other people who have already paid and are waiting for the payout. But Bitcoin is decentralized and work practically with any number of users. The network is stronger and more resilient when used by more people and no promises of profits are made by the network. 
  • Bitcoin Will Be Replaced By Altcoins:- It is true bitcoin is very popular cryptocurrency but after the launch of Altcoins people started assuming that the Bitcoins will be replaced by Altcoins as it is trying to serve different industries with the innovative schemes in different ways. But its true about Bitcoin that it can’t be replaced by any other coin as it has always positive feedback and never stuck in any loopholes. No doubt there are so many new coins but all are less secure and stable.
  • Bitcoin Is Dead:-The most common and usually repeated myth by people about Bitcoin is that Bitcoin is no longer used by anyone in the world. They declared it dead. But in reality, it is most successful cryptocurrency in the history of the world when it is measured by number of transactions.