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An Extremely Brief History of Cryptocurrency

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While the practical applications of cryptocurrencies date back a mere 7 years,
the technical aspects actually date back a further 30 years to the 1980s.
Cryptographer David Chaum was the first to theorize a cryptocurrency when he
invented an encrypted computer algorithm that allowed secure, unalterable
exchanges between two parties.
Chaum later founded DigiCash, one of the first companies to produce units of
currency based of his algorithm. It’s important to note that only the DigiCash
company, could produce the currency, which is a model unlike Bitcoin and other
cryptocurrencies where anyone can mine the currency (providing they have the
necessary computing power). After running into legal problems and rejecting a
partnership with Microsoft that would have seen DigiCash paired with every
home Windows operating system, the company went bankrupt in the late 1990s.
Chinese software engineer Wei Dai published a white paper on “b-money”,
which laid the foundations for the architecture behind the cryptocurrencies that
we know today. The paper included information on complex algorithms,
anonymity for purchasers and decentralization. However the currency itself
never came to fruition.
US based E-Gold was another failed attempt at creating a cryptocurrency in the
1990s. The Florida based company gave customers e-gold “tokens” in exchange
for their jewelry, old trinkets and coins. These tokens could then be exchanged
for US dollars. The website was initially successful and there were over 1
million active accounts by the mid-2000s. One of E-Gold’s pioneering strategies
was that anyone could open an account. However, this led to a number of scams
being run through the website. In addition, poor security protocols led to large
hacking incidents and the company went out of business in 2009.
The modern cryptocurrencies that we know today began with Bitcoin, which was
first outlined by anonymous entity (the identity has never been confirmed as a
single person or group) Satoshi Nakamoto. Bitcoin was released to the public in
early 2009 and a large group of enthusiasts began mining, investing in, and
exchanging the currency. The first Bitcoin market was established in February
In late 2012 Hosting and website development platform WordPress became the
first major retailer to support payment in Bitcoin. This step was key as it gave
the currency real world credibility and showed that large corporations had
confidence in it as a currency.

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