Cryptocurrency is the new buzzword in the digital sphere for a quite long time and many people around us believe that it emerged out of nowhere and became a driving force in the technological and financial world. However, this is not the case. Cryptocurrencies, aka digital coins, can make a paradigm shift to the way we deal with existing payment methods and since its inception, cryptocurrencies are evolving and becoming huge with each passing day. Cryptocurrencies with centralized exchange solutions, enable users to store and share digital currencies in a secured and highly protective environment.
In the meantime, Cryptocurrency is a relatively new medium of exchange in that it is a digital or virtual currency that leverages encryption to facilitate the transfer of funds. On the other hand, blockchain is a shared, digital public ledger on which transactions of cryptocurrencies are carried out. The two terms, Cryptocurrency and Blockchain, are used interchangeably because they share a very unique relation but they are not synonymous in any way. Blockchain is the medium on which Cryptocurrency is operated while Cryptocurrency, per se, is the means or instrument of exchange. In other words, Blockchain is the ecosystem that lays the foundation for Cryptocurrency related activities. Which means the latter cannot exist independent of the former. Blockchain, however, can operate as a separate and distinct entity since it has other industry applications apart from facilitating Cryptocurrencies.
The circumstances that led to the rise of Cryptocurrency is an interesting one. Several decades went into the realization of a finally viable digital currency. The noteworthy part of it all is that Cryptocurrency was nothing more than a concept for quite a long time. Digital currencies entered the domain of human interest with some early proponents in the 80s and 90s mooting the notion of a currency that departs from the institutionalized conventions of traditional fiat currency.
Then several attempts were made to realize the concept but they were to no avail until Satoshi Nakamoto entered the scene in the year 2008. The same year, a paper called Bitcoin – A Peer to Peer Electronic Cash System surfaced under the pseudonym of Satoshi Nakamoto. This signalled the birth of Bitcoin, the first viable digital currency, followed by the likes of Ethereum. Despite the limited number of takers in the initial years, Cryptocurrencies became a big hit with the financial world overtime.
In retrospect, the year 2009 marked the induction of Bitcoin into the blockchain ecosystem. For the first time, mining of Bitcoin took place. Bitcoin scaled a notch higher in the following year, that is, 2010, by acquiring a bona fide monetary value and becoming traded. As the narrative goes, a Bitcoin bluff swapped 10,000 Bitcoins for two pizzas and laid the foundation for a series of similar transactions that led to the mass reception of Cryptocurrencies as we know it. As such, with the inception of Bitcoin, the notion of a decentralized and encrypted currency gained more and more traction and materialized with the rise of alternative currencies, aka altcoin, each one better than the previous. And we can say that the integration of Cryptocurrency into the financial world is nearing maturity.
The second generation of cryptocurrency
In the initial days, some people came up with cryptocurrencies other than bitcoin which were doing the same thing as bitcoin did, but in some different ways. However, technology giants came to realize that the Blockchain technology has more potential and the versatility than that and can be used to create centralized cryptocurrency exchanges to validate and mediate other Peer-to-Peer transactions.
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