Did you know that the first Bitcoin was created back in 2009? Just a little bit more than one decade later, Bitcoin is worth hundreds of billions of dollars!
It is amazing to think about how quickly the value of cryptocurrencies has changed. Even now, most people don’t know very much about cryptocurrencies. However, such currency will be a big part of the future, and people will have to learn more about it sooner or later.
Read on to learn a little bit about the history of cryptocurrency and where its future may lead!
What Is Cryptocurrency?
Cryptocurrencies are digital currencies. They are not backed by any government or real-world assets. Instead, they are valuable only because they can be used as mediums of exchange, and because of the financial tools that they provide.
Bitcoin was the first cryptocurrency. It is still the biggest. However, since Bitcoin was invented, many other cryptocurrencies were created.
Among other cryptocurrencies, some of them are basically just like Bitcoin but with different names. On the other hand, many cryptocurrencies can be used to create powerful financial tools.
For example, most societies rely on trustworthy companies to provide insurance. If a country does not have insurance companies with a long history of reputable behavior, then nobody knows if they can trust them. As a result, farmers and other people simply live without powerful Financial tool of insurance.
However, cryptocurrencies can provide smart contracts. These smart contracts will pay out automatically. That means that financial tools like insurance are available without having to place trust in any specific person or agency!
Which Cryptocurrency Will Be the Most Valuable?’
Right now, Bitcoin is still the most popular cryptocurrency. But since it is the oldest cryptocurrency, it does not provide any useful financial tools.
Ethereum
The second largest cryptocurrency is called Ethereum. It provides a huge list of financial tools. However, it is extremely expensive to use.
The main functionality that Ethereum provides is called the smart contract. Smart contracts are called smart because they execute themselves, without requiring any person to take it upon themselves to execute them.
For example, an insurance company might have a contract that says that they will give somebody money under certain circumstances. But at the end of the day, when those circumstances arise, it is up to certain people to remember their agreement, honor it, and execute it.
One of the side effects of this system is that it cannot exist without trustworthy people. The mere existence of a contract does not do anything unless it exists in an ecosystem of trust or enforcement by law.
This is extremely relevant to the power of smart contracts. There are all kinds of contracts which simply cannot exist in certain parts of the world. The ecosystem of trust and law is not sufficiently developed to allow for them.
For example, farmers in certain parts of the world cannot enjoy the benefits of crop insurance. If they have an unusually bad year, they just have to suffer through the consequences. They could try to buy insurance from a local provider, but those providers simply don’t have a track record of reliability.
The smart contracts that Ethereum provides are the solutions. They allow anyone in the world to make a contract with anybody else in the world. And they don’t require anybody to figure out how trustworthy anybody else is.
Smart contracts have also been applied to create many other financial tools and solve many other financial problems. There are dozens of applications that depend on Ethereum smart contract functionality.
Cardano
Cardano is a cryptocurrency that is hoping to become the new biggest cryptocurrency. It’s much cheaper than Ethereum and is about to start offering smart contracts. Hopefully, this combination will allow it to beat both Ethereum and Bitcoin.
On the other hand, Ethereum is changing its software to make itself more affordable. It is possible that it will maintain its lead by adapting to the desires of the marketplace.
Dogecoin
Although we have already talked about what are the most popular cryptocurrencies, there are many other crypto coins that have made their mark in the history of crypto. One of the most unusual cryptocurrency futures is Dogecoin.
Dogecoin was just a joke. It is named after a meme that features a fat, round dog. And its design was also made as a joke.
Dogecoin was designed so that it could inflate forever. So the Dogecoin that you bought today could become devalued over time.
To everyone’s surprise, Dogecoin is now the seventh largest crypto coin in the world. It is worth tens of billions of dollars. How did this happen?
Everybody loves the joke. So many loved the joke that they bought more and more Dogecoin, driving up demand for it.
On top of that, although Dogecoin will continue to inflate, it will do so quite slowly. In fact, it will not inflate any faster than normal currencies like the United States dollar.
One of the richest men in the world, Elon Musk, is even supporting Dogecoin. He has talked about partnering with the creators of Dogecoin to change its programming and turn it into a useful coin. If that happens, then Dogecoin could theoretically end up as the top cryptocurrency in the world!
In the history of the blockchain, Dogecoin is an anomaly. It started as a joke, but has turned into one of the more popular cryptocurrencies. Check out this link to learn more about Bitcoin vs Dogecoin!
Be Educated in the History of Cryptocurrency
We hope that you were able to learn something helpful from this brief history of cryptocurrency. We are at a time in history where we can watch the world change around us in real-time. Very soon, it is probable that everybody will know about cryptocurrency and it will be a major part of financial life.
To keep up-to-date on the latest developments and finance, world technology, and more, take a look through our other articles!
