The Crypto trading industry has been around for a decade now. But, relatively, that’s a short span of time. Yet despite being recent in terms of emergence, a lot has been achieved. There has been a great boom around Crypto and, as things stand, there is no sign of its popularity subsiding or drizzling out anytime soon. In fact, statistics shows an upward trajectory that picks up more and more traction. As such, the evolution of the industry that Crypto brought about is something every financial buff should know.
Birth of the first Cryptocurrency: Bitcoin
Up until January, 2009, “Cryptocurrency’’ was not part of the financial vocabulary that goes around in the context of trade and exchange. It was a pseudonymous name that goes by Nakamoto that was behind the birth of the first Cryptocurrency. On the 12th of January 2009, Nakamoto sent 10 Bitcoins to Hal Finney, a transaction that set in motion the birth of a new finance counterculture. This transaction was followed by Laszlo Hanyecz who purchased two pizzas for 10,000 bitcoin, the then equivalent of $30. From that point the first digital currency took off with skyrocketing values over the years.
Since the arrival of Bitcoin, several hundreds of other cryptocurrencies have entered the market. These new digital currencies following the inception of Bitcoin have proven to be a more accessible alternative as they are available at a cheaper rate. Some popular alternatives include Litecoin, Ethereum and Dogecoin. This electronic payment system is based around mathematical proof and the result is a decentralized currency (independent from central authorities) and instantly transferrable with a very low transaction cost.
The early years of bitcoin exchanges
The pioneer of early bitcoin exchanges was Bitcoin Market. On the 5th of January, 2010, Bitcoin Market announced that it was engaged in the process of building an exchange. It pointed out that the motive behind the venture was the concept of a real market where people would be able to buy and sell bitcoins with each other. It also announced that a website would soon be in place. Subsequently, on March 17 the same year BitcoinMarket.com went live. Those days even PayPal was serving as a means of exchanging BTC for fiat. What caused the eventual breakaway of PayPal from Bitcoin Market was the rise of scammers in the space due to the growth and success of bitcoin.
A few months after Bitcoin Market’s launch, several other exchanges emerged on the horizon and the financial world witnessed a wave of exchanges hitting the market. Amongst the many exchanges that followed, Mt. Gox that went live in June 2010 was the most notable one.
DEX
The year 2014 marked the launch of one of the first decentralized exchange systems. On the 3rd of January that year NXT announced their intention to build a decentralized exchange. NXT asset exchange used the NXT digital currency as the fuel for the NXT ecosystem using it to create assets that represented the likes of bonds or network storage. Later, the term “coloured coins” found its use to imply this system of creating assets on pre-existing blockchains. But, in the early days of DEX, the assets could only be traded for the NEXT coin and direct asset-t-asset trading was not yet feasible.
However, innovation and evolution propelled DEX to a new level. Counterparty launched their DEX and took it a notch higher. Though trading was limited Counterparty related assets, it was an improvement on the coloured coins as Counterparty tokens were not tied to the BTC balance of any given address. As the year 2014 drew to a close, Blocknet announced their intention to create the first truly decentralized exchange and took peer-to-peer trading a notch higher.
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