This week on Crypto--Talk With Chris Mentillo, I wish to talk about the history of Cryptocurrency so you can have a better understanding of what exactly it is -- especially if you are just starting out. Nonetheless, even if you are not new to cryptocurrency, please read anyway because this is a more updated version of crypto-history:
A cryptocurrency is a digital asset constructed to work as a medium of exchange that uses powerful cryptography to acquire financial transactions, manage the production of added units, and confirm the transfer of assets. Cryptocurrencies use decentralized control as opposed to centralized digital currency and central banking systems.
The decentralized control of each cryptocurrency operates through categorized ledger technology, typically a blockchain, that labors as a public financial transaction database.
Bitcoin, first issued as open-source software in 2009, is generally considered the first decentralized cryptocurrency. Since the release of Bitcoin, [BTC] over 4,000 altcoins (alternative variants of Bitcoin, or other cryptocurrencies) have been formulated.
History of CRYPTO-CURRENCY
In 1983, the American cryptographer David Chaum invented an anonymous cryptographic electronic money called ecash. Later, in 1995, he implemented it through Digicash, an early form of cryptographic electronic payments that demanded user software to withdraw notes from a bank and designate specific encrypted keys before it can be sent to a recipient. This allowed the digital currency to be untraceable by the issuing bank, the government, or any third party.
In 1996, the NSA published a paper entitled How to Make a Mint: the Cryptography of Anonymous Electronic Cash, describing a Cryptocurrency system first publishing it in an MIT mailing list and later in 1997, in The American Law Review (Vol. 46, Issue 4).
In 1998, Wei Dai published a description of "b-money", characterized as an anonymous, distributed electronic cash system. Soon thereafter, Nick Szabo defined bit gold. Like Bitcoin and other cryptocurrencies that would follow it, bit gold (not to be confused with the later gold-based exchange, BitGold) was described as an electronic currency system that challenged users to finish a proof of work function with solutions being cryptographically put together and published. A currency system based on a reusable proof of work was later created by Hal Finney who followed the work of Dai and Szabo.
The first decentralized cryptocurrency, bitcoin, was created in 2009 by pseudonymous developer Satoshi Nakamoto. It used SHA-256, a cryptographic hash function, as a proof-of-work scheme. In April 2011, Namecoin was created as an attempt at forming a decentralized DNS, which would make internet censorship very difficult. Soon after, in October 2011, Litecoin was released. Another notable cryptocurrency, Peercoin was the first to use a proof-of-work/proof-of-stake hybrid.
On 6 August 2014, the UK announced its Treasury had been commissioned to do a study of cryptocurrencies, and what role, if any, they can play in the UK economy. The study was also to report on whether regulation should be considered.