Though the concept of cryptocurrency was present even in the 19th century, however, it came into being only in 2009.
However, the need to have cryptocurrency only increased when the world was faced with the financial crisis in 2008.
The impacts of the crisis were so severe that the economies of all the countries were simultaneously affected. It was then when a handful of people stressed the need to introduce alternative sources to help deteriorating economies.
The idea of cryptocurrency was duly turned into reality by a mysterious person called Satoshi Nakamoto. Nakamoto is known to be the creator and inventor of the first-ever cryptocurrency called Bitcoin. Nakamoto in 2008 issued the concept paper of Bitcoin and the next year Bitcoin was officially launched.
Nakamoto’s concept of Bitcoin was not only unique but it was based entirely on the concept of “self-sovereignty”.
Bitcoin is classified as an asset but it is not issued by any governmental authority nor is there an institution which manages it. Instead, it is a sort of asset which does not put any liability towards anyone.
It is a digital currency that has no face or physical existence. By structure, Bitcoin is decentralized meaning thereby that no central authority has any control over it. What this decentralization does is that it eliminates the need to have intermediaries for sending or receiving funds.
On the contrary, the fiat currencies are though assets yet they pose liabilities upon central banks of governments. While Bitcoin or any other cryptocurrency is reinforced at an exclusive network known as Blockchain. On the other hand, this blockchain network is operated by highly advanced/modern computers which are all interlinked through transactional ledgers.
Today, cryptocurrencies are well-recognized as a distinct asset class that is used for sending and receiving money. The transactions done through the blockchain are not only efficient but much cheaper than that of conventional methods.
Since the launch of Bitcoin, there are more than a thousand cryptocurrencies available today but the leader of them all is still Bitcoin. Apart from Bitcoin, other major and highly in-demand cryptocurrencies are Ethereum (ETH), Bitcoin Cash (BCH), Litecoin (LTC) etc.
The growth of Bitcoin and other digital currencies is phenomenal since 2009. For instance, when Bitcoin was launched it was purchasable only for few cents of a dollar. However, today the value of each Bitcoin is above US$ 50,000 while Ethereum is traded for over US$ 2,000.
The concept of cryptocurrency worked well against the 2008’s financial crisis as well as in the present pandemic crisis.
When the Covid-19 virus struck globally, many individuals along with institutions started to invest into the digital currency industry. Again, cryptocurrencies provided an antidote against pandemics which otherwise devastated the global economy.
Now the central banks of the world are thinking to launch their own version of digital currencies called CBDCs. A few countries such as China and Sweden have already done that while others are still in the process.