Contrary to many people’s beliefs, bitcoin was not the first cryptocurrency to be created alongside other, even less successful, currencies that lasted more than a decade before bitcoin crashed on the scene for the first time in 2008.
If these digital currencies were overwhelmed by the success of bitcoin (currently priced at more than $ 39,000), they paved the way for Satoshi Nakamoto’s creation.
So here is everything you need to know about the origins of cryptocurrencies.
What was the first cryptocurrency before bitcoin?
To see the inspiration for bitcoin, two names are mentioned: DigiCash and HashCash.
Ultimately, the various codes for DigiCash are broken, and given that DigiCash was a private digital currency, it is different from the open source cryptocurrencies currently available, meaning that it could not be extended in an earlier Internet -era. The company declared itself willing in 1998.
Apart from DigiCash, Hashcash is considered as an important influence for bitcoin. Created by Adam Back in 1997, Hashcash uses job algorithms, also used in bitcoin for transactions. The main use of Hashcash in the early years was unwanted post-filtering and prevention of DoS attacks. Hashcash has had such a huge impact on bitcoin that Satoshi Nakamoto mentioned it in the bitcoin white paper.
What is exchanged for older cryptocurrencies?
When Bitcoin was first launched, transactions were not made through an exchange of cryptocurrencies, but through Bitcoin-centric forums, including Bitcointalk, which was created by Satoshi Nakamoto.
As the first bitcoins exchange, bitcoinmarket.com has become the most popular way to trade outside the forums. The website went live in March 2010 after it was suggested to ‘dwdollar’ on Bitcointalk in January 2010. The user stated:
Hi every one. I’m in the process of building an exchange. I have big plans for it, but I still have a lot of work to do. It will be a real market where people will be able to buy and sell Bitcoins between them. In the coming weeks, you should have a website with a basic brand installed. Please be patient with me.
The previous exchanges existed before the Bitcoin market, although they were not centered on cryptocurrency transactions before Bitcoin gained popularity. The now infamous Mt.Gox, Magic the Gathering Online Exchange, was first established in 2007 as a trading card game exchange before switching to bitcoin in 2010.
Mt.Gox and the Bitcoin Market are no longer commercialized, and Mt.Gox declared bankruptcy in 2014 after a series of much-publicized infiltrations that resulted in the robbery or loss of more than $ 450 million in bitcoin.
Of the existing and active exchanges, Kraken and Bitstamp are the oldest cryptocurrency exchanges. The Kraken was launched on July 28, 2011 and Bitstamp was formed a month later. Both were formed as alternatives to Mt.Gox, which had suffered its collapse just a month ago.
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[Featured Photo by Executium on Unsplash]
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