History of Cryptocurrency

History of Cryptocurrency

Inception of an idea

The history of cryptocurrency began long before the first full-fledged cryptocurrency, Bitcoin. In the 1980s and 1990s, scientists and cryptographers worked to create digital currencies that were fully encrypted and secure for use on the internet. One of the first projects that preceded the creation of modern cryptocurrencies was DigiCash, founded by David Chaum in 1989. Although DigiCash was not a huge success, it laid the groundwork for future developments in digital money.

The birth of Bitcoin

In 2008, a person or group of people under the pseudonym Satoshi Nakamoto published a document describing the protocol and a working version of the Bitcoin currency. In January 2009, the first block (called the genesis block) was mined and Bitcoin began its existence. Bitcoin offered a solution to the double-spending problem without the need to trust a third party, using blockchain technology.

Development and take-off

After Bitcoin emerged, other cryptocurrencies began to develop, such as Litecoin in 2011 and Ripple in 2012. These and many subsequent cryptocurrencies tried to improve various aspects of Bitcoin, such as transaction speed or energy efficiency. In 2013, the price of Bitcoin reached $1,000 for the first time, which was a significant moment for the whole industry and attracted the attention of the general public.

The era of ICOs and regulation

In 2017, the cryptocurrency market experienced an ICO (Initial Coin Offering) boom, when many new projects started raising capital through issuing their own tokens. This led to a dramatic increase in the number of cryptocurrencies and a significant rise in investor interest. However, along with the rise in popularity, the number of frauds also increased, which necessitated the need for governments to regulate the market.

Current state and prospects

Today, the cryptocurrency market continues to evolve despite its volatility and various challenges such as legal regulation and technical issues. Besides the financial aspect, blockchain technology is finding applications in many other fields, from logistics to voting. Projects such as Ethereum enable the creation of decentralised applications and smart contracts, opening up new opportunities for innovation.

Cryptocurrencies and blockchain technology continue to generate lively debate about their future in the financial system and beyond. While some see them as a revolution in the world of finance, others approach them with caution, emphasising the risks and challenges associated with their use.

The history of cryptocurrencies is a story of innovation, testing and controversy that will certainly continue to evolve in the future, contributing to the evolution of the digital economy.

The History of Cryptocurrency

What is cryptocurrency?

Cryptocurrency is a medium of exchange based on blockchain technology and cryptography to record transactions and control the creation of new units. Cryptocurrencies are a subtype of alternative digital currencies. The first decentralised cryptocurrency was bitcoin in 2009. Since then, many other cryptocurrencies have been created. They are often called altcoins as an abbreviation for the phrase alternative to bitcoin.

Unlike digital currencies in centralised banking systems, control in cryptocurrencies is decentralised. For example, in bitcoin, decentralised control is exercised using blockchain, i.e. the transaction database is maintained as a distributed electronic ledger.

Due to large price spikes and emerging fraud, financial regulators are attempting to restrict or regulate cryptocurrencies and all related services and products in various ways. Large advertisers such as Google and Facebook are also acting in this direction, trying to restrict cryptocurrency-related advertising.

Units of cryptocurrency are produced throughout the cryptocurrency system by calculating a commonly known exchange rate. Unlike a centralised banking system such as the Central Bank or Federal Reserve, corporate boards or governments control the supply of currency either by printing fiduciary money or through digital bank registries. In a decentralised cryptocurrency, companies or governments cannot produce units of cryptocurrency. The basic technical system for cryptocurrency was created by Satoshi Nakamoto of Japan.

As of 2024, there are hundreds of cryptocurrency specifications. Most are similar to or derived from the first fully accepted cryptocurrency, bitcoin. The security, integrity, and balance of the ledgers in cryptocurrency systems are maintained by a group of independent people called miners, who use their computers to confirm the date and time of transactions according to a certain scheme, adding them to the ledger. The security of the ledger is based on the assumption that most miners honestly try to maintain it because they have a financial incentive to do so.

Most cryptocurrencies are arranged in such a way that the rate of mining decreases as the process progresses, limiting the total number of units. This mimics the scarcity of precious metals that serve as the basis for traditional money. Compared to conventional money held in banks or cash, cryptocurrencies are less susceptible to confiscation by law enforcement. They are all pseudo-anonymous, although variants, such as Zerocoin, have been proposed to allow true anonymity. Cryptocurrencies also come in a variety of forms.

According to PricewaterhouseCoopers (PwC), most cryptocurrencies have the following attributes:

  • The code is tamper-resistant.
  • There are mechanisms in place to prevent the expenditure of units that the user does not own.
  • Limited supply combined with the market’s ability to break down units in circulation into smaller pieces if necessary.
  • Lightning-fast and irreversible transfer of real value over the Internet without the intervention of financial intermediaries.
  • A decentralised exchange network that provides security and verification of transactions.
  • Internal mechanisms that encourage new participants to join the network through their computers, providing the computing power to keep the network running.
  • Publicly available transaction information stored in a global public registry, the equivalent of a general ledger.
  • Personal security provided by public and private cryptographic keys.
  • An existing core of programmers and volunteers who develop code, ensuring the stability and security of the network

Cryptocurrency creation

In 1998, computer engineer Wei Dai published a description of “b-money”, an anonymous distributed electronic money system. Shortly thereafter, Nick Szabo created BitGold. Like bitcoin and other cryptocurrencies created after it, BitGold is a system of electronic currencies in which users are required to perform the function of proving work and posting encrypted solutions.

The first decentralised cryptocurrency, bitcoin, was created in 2009 by a developer under the pseudonym Satoshi Nakamoto. It uses the SHA-256 cryptographic hash function. As of 2023, there are about 19 million bitcoins in circulation. In April 2011, the cryptocurrency Namecoin was created as an attempt to form a decentralised domain name system to make it harder to censor the Internet. Shortly after, in October 2011, the Litecoin cryptocurrency was released. It was the first successful cryptocurrency to use a script as a hash function instead of SHA-256. Another significant cryptocurrency is Peercoin. It was the first to use a hybrid proof-of-work and proof-of-assignment function. Many cryptocurrencies have been created, but few of them have been successful because they did not offer technical innovation.

After 2014, so-called “second generation” cryptocurrencies such as Monero, Ethereum, Dash and NXT emerged. They have advanced features such as address masking, smart contracts, sidechains or assets.

Central bankers argue that the adoption of cryptocurrencies such as bitcoin significantly limits their ability to influence the cost of credit in the economy. They also argue that the more popular cryptocurrency trading becomes, the more consumer confidence in fiat money will erode. According to Gareth Murphy, an official at a central bank, “the widespread use of cryptocurrencies will make it much more difficult for statistical agencies to gather the information on economic activity that governments need to manage the economy.” In his view, virtual currencies represent a new challenge to the important monetary and exchange rate policy functions of central banks.

Jordan Kelly, founder of Robocoin, launched the first bitcoin ATM in the US on 20 February 2014. The device, installed in Austin, Texas, features a document scanner to verify users’ identities. Dogecoin Foundation, a charitable organisation associated with the Dogecoin currency, donated the equivalent of more than US$30,000 in cryptocurrency to support the Jamaican bobsleigh team’s participation in the 2014 Olympic Games in Sochi, Russia.

Since the mid-2010s, a number of countries around the world have begun to recognise cryptocurrencies as legal means of payment on their territories.

Benefits of cryptocurrency

One of the main differences between cryptocurrencies and other payment methods is that there is no need to involve third parties, i.e. financial organisations, in settlements. For consumers, cryptocurrencies offer fast and cheap payments between people and businesses without the involvement of intermediaries (with the exception of internet service providers) and without the need for parties to provide their personal data or information about the origin of funds. This does not mean that transactions cannot be traced in the event of an investigation by the authorities. If necessary, the location of a transaction can be traced by referring to an electronic public registry, which is an analogue to the general ledger. From a business perspective, cryptocurrencies represent a low-cost way to conduct financial transactions because of the low risk associated with instant settlement and the lack of possibility of refunds due to disputed or fraudulent credit card transactions.

According to the PwC survey, 81% of respondents used the currency for online shopping, with another 17% preferring it for its anonymity. Cryptocurrency was also used to make payments for other purposes, such as playing online games – 17% and paying off credit card debts – 14%.

Due to the low liquidity of cryptocurrencies, there is a significant cost of exchanging fiat money for cryptocurrencies and vice versa. In addition, the high volatility (variability) of the price of a unit of cryptocurrency against other currencies creates large risks for consumers and businesses, so these types of currencies in most cases are still not preferred for long-term “cash” positions.

Crypto investors

Cryptocurrencies are gaining popularity as a means of payment because they offer quite interesting opportunities for investors, especially those with short-term investment intentions or even those engaged in financial speculation – again due to volatility. As PwC notes according to one study, the volatility of bitcoin against the US dollar is 5-7 times greater than the volatility of fiat money in forex trading. Investors have a different perspective: some appreciate the value of the technology itself, the integrity of the cryptographic code and the decentralised network. Cryptocurrencies are mostly used outside of existing banking and government institutions. Although these alternative decentralised modes of exchange are at an early stage of development, they have significant potential to compete with existing payment systems. To date, there are more than 200 digital currencies in existence. Networks play an important role in analysing the development of cryptocurrency markets. As each currency grows in value as the number of its users increases, some of them have achieved tremendous success. Some of the earliest cryptocurrencies to hit the market include Bitcoin, Litecoin, Peercoin, and Namecoin.

Cryptocurrency market capitalisation

For historical reasons, Bitcoin dominates the market capitalisation of all cryptocurrencies, accounting for at least 50%. The other cryptocurrencies rise or fall depending on the value of Bitcoin, which is largely determined by speculation on other, limiting factors of the technology, known as blockchain rewards encoded in the Bitcoin architecture itself.

By mid-June 2021, cryptocurrencies are considered highly unpredictable and risky assets in terms of diversifying investment portfolios. However, such an opportunity is offered by some investment companies in the United States.

Cryptocurrency status

The legal status of cryptocurrencies varies significantly from country to country and in many countries is still undefined or changing. In some countries, their use and trading is permitted, while in others it is prohibited or restricted. Different government agencies, departments and courts categorise bitcoin in different ways. In China, a period of extremely rapid adoption of cryptocurrencies in early 2014 was followed by a ban on bitcoin transactions by the Bank of China. In early September 2017, initial cryptocurrency offering (ICO, the equivalent of an initial public offering) transactions were also outlawed in China. The paper, published by academics at Oxford and Warwick, notes some features similar to the precious metals market and that bitcoins offer more than traditional currencies. Countries such as Singapore, Australia and Canada have issued or are in the process of issuing guidelines on the handling of cryptocurrencies, and the UK government has announced that it will begin legislating against criminal behaviour in relation to new types of currencies. Internationally, the Financial Action Task Force (FATF) is discussing financial offences related to cryptocurrencies.

Cryptocurrencies also raise purely legal issues unrelated to government policy. The cryptocurrency Coinye, originally called Coinye West, used rapper Kanye West as its logo without permission, which constitutes malicious trademark infringement, unfair competition and cyber piracy.

The growing popularity and demand for cryptocurrencies since 2009 has raised concerns that their unregulated use could become a threat to society and the global economy. It is also feared that altcoins could become a tool for committing anonymous Internet crimes. Altcoin transactions are independent of official banks and could therefore facilitate tax evasion. Since taxable income is determined based on an individual’s income, it becomes extremely difficult, and in some cases impossible, to account for cryptocurrency transactions.

Cryptocurrency networks are characterised by their lack of regulation and anonymity, which attracts many users seeking just that. The lack of regulation means that potential criminals can attempt tax evasion and money laundering. Rather than operating through a complex network of financial structures and offshore bank accounts, altcoin money laundering takes place outside of institutions and can be done through anonymous transactions.

History of the first cryptocurrencies

Cryptocurrencies became the talk of the town after 2008 with the emergence of bitcoin. However, digital assets existed for decades before BTC. The term “cryptocurrency” appeared in 1989, when American computer scientist David Lee Chaum invented digital money. He used cryptography to protect and validate transactions.

It was not until the early 1990s that cryptographic methods and software were successfully developed. This made it possible to create a fully decentralised electronic currency. In 1998, computer engineer Wei Dai, published a paper in which he introduced “b-money”. He introduced the concept of an anonymous distributed electronic money system.

Many people are convinced that the world’s first cryptocurrency was called Bit Gold. Such a currency did exist and was created by blockchain pioneer Nick Szabo in the same year as b-money. Bit Gold was inspired by the inefficiencies of the old banking system and the need to reduce the level of trust required for transactions.

While none of these cryptocurrencies ever became official, they served as inspiration for the modern cryptocurrencies that are on the market today.

First cryptocurrency

The first cryptocurrency is bitcoin (ticker BTC). It was developed by an anonymous programmer, or a group of people, under the pseudonym Satoshi Nakamoto. The unknown developer’s goal was to create a decentralised alternative to the traditional financial system that caused the global financial crisis in 2008.

Since the creation of BTC, new digital currencies have emerged and exist in the market, some of which replicate bitcoin’s mission, while others offer very different use cases. For example, Ethereum, the second largest cryptoasset by market capitalisation, was launched in 2015 to create an ecosystem for decentralised applications (dApps) and smart contracts.

As the market has grown and matured over the past decade, BTC has gone through many up and down cycles. Since this asset is very young, investor sentiment towards it tends to fluctuate. Therefore, the cryptocurrency has gained a reputation as a highly volatile asset.

Why did cryptocurrencies appear?

The main purpose of digital assets is to decentralise finances. Let’s consider the pros and cons of cryptocurrencies.

The merits of digital assets:

  • Supporters see cryptocurrencies such as bitcoin as the currency of the future and are looking to buy them now, presumably before they become more valuable.
  • Some crypto-enthusiasts like the fact that cryptocurrency removes central banks from managing the money supply, as over time these banks tend to reduce the value of fiat through inflation.
  • In communities that have been left out of the traditional financial system, some people see cryptocurrencies as a promising springboard. Pew Research Center data from 2021 showed that Asians, blacks and Hispanics “are more likely than white adults to say they have ever invested in, traded or used cryptocurrency.”
  • Other users like the blockchain technology behind cryptocurrencies because it is a decentralised system for processing and recording data and can be more secure than traditional payment systems.
  • Some cryptocurrencies offer their owners the opportunity to earn passive income through a process called steaking.

Disadvantages of cryptocurrencies:

  • Many cryptocurrency projects are untested, and blockchain technology in general is not yet widespread. If the idea behind digital assets fails to realise its potential, long-term investors may never see the returns they were hoping for.
  • There are other risks for short-term crypto investors. The prices of virtual currencies tend to change rapidly. This means that users can both make money quickly by buying assets at the right time and lose their investments by doing so just before the crypto market collapses.
  • The significant environmental impact of bitcoin and other projects using the Proof-Of-Work (PoW) consensus algorithm. For example, a study conducted by the University of Cambridge found that BTC mining consumes more than twice as much electricity as all residential lighting in the United States. That said, some cryptocurrencies use a different technology that requires less energy, called Proof-Of-Stake.
  • Governments around the world have not yet fully decided how to treat cryptocurrencies, so regulatory changes and restrictions could affect the market in unpredictable ways.

First altcoins

Cryptocurrencies that have emerged after BTC are called altcoins. Most altcoins try to address the shortcomings that bitcoin has and come up with competitive advantages in new versions.

The term “altcoin” is a combination of two words: “alt” and “coin”, where alt means “alternative” and coin means “cryptocurrency”. Together, they refer to a category of cryptocurrency that is an alternative to the digital currency Bitcoin. After the success of Bitcoin, many other peer-to-peer digital currencies emerged that attempted to replicate the success of BTC.

Many altcoins are built on the basic structure embedded in bitcoin. Therefore, most such assets are peer-to-peer and use PoW. However, altcoins, even with many overlapping characteristics, are very different from each other.

Let’s take a look at the oldest cryptocurrencies that were launched after bitcoin.

  1. Litecoin (LTC). Founded by former Google employee Charlie Lee in October 2011, Litecoin was originally designed to reduce transaction time from 10 minutes to 2.5 minutes. LTC used the Scrypt hashing algorithm rather than SHA-256 like bitcoin. It is one of the first cryptocurrencies launched after bitcoin.
  2. Namecoin. Inspired by a discussion on Bitcointalk regarding the BitDNS system, Namecoin was introduced by Vincent Durham in April 2011. It is a fork of bitcoin. The altcoin was launched to serve as a decentralised name registration service, similar to the Ethereum Name Service (ENS).
  3. SwiftCoin. The cryptocurrency was developed by Daniel Bruno’s team in 2011. It includes a proof-of-work (PoW) algorithm and a blockchain concept. Altcoin provides dynamic circulation, which allows you to keep volatility under control. It is worth noting that the blockchain of this cryptocurrency is not public.
  4. Bytecoin. Designed to provide anonymous money settlements and privacy, the altcoin uses the Cryptonote It allows for instant payments worldwide, and transactions take about 2 minutes on average to verify.
  5. Peercoin. The first cryptocurrency to incorporate both the PoW and PoS algorithm, it has no limited market capitalisation but has a constant inflation rate, which is set at 1% per year. Peercoin is one of the first ten cryptocurrencies launched after bitcoin. Inspired by the concept of bitcoin, its white paper was released in August 2012 and the authors are Scott Nadal and Sunny King. Transaction volume is self-regulated, as the transaction fee received is destroyed by the system automatically.
  6. Dogecoin. Launched in December 2013, DOGE, based on the famous internet meme of a Shiba Inu dog, suddenly became widespread and reached a market capitalisation of $16 million by January 2016. Previously, the market capitalisation was set at 100 billion, but founder Jackson Palmer later decided to set an unlimited market capitalisation. As of 21 November, Dogecoin is ranked ninth in the global cryptocurrency rankings.
  7. Feathercoin. Peter Bushnell’s first blog post about Feathercoin on bitcointalk is dated 16 April 2013. Feathercoin, as one of the oldest altcoins, has stood the test of time. It is also still being actively developed by its founder and a small but strong community. Feathercoin is an improved and adapted version of BTC. Users have access to two wallets (FeathercoinCore and Electrum) that work just like Bitcoin, but with faster block processing. In addition to these wallets, the altcoin is supported by various mobile wallets and blockchains
  8. Gridcoin. It is a cryptocurrency that uses blockchain technology for crowdsourced settlement of scientific projects. The Gridcoin protocol was published on 16 October 2013, and is structured in such a way that proof of ownership is applied to the issuance. A key feature of Gridcoin is that issuance is linked to participation in scientific distributed computing, meaning users are rewarded for “computational contributions” to science. Gridcoin seeks to differentiate itself from BTC by adopting “green” approaches to issuing new coins and securing the network. In particular, Gridcoin has implemented a new Proof-of-Research (POR) scheme that rewards Gridcoin users for performing useful scientific computations on BOINC (Berkeley Open Infrastructure for Network Computing).
  9. Primecoin. It is a blockchain-based cryptocurrency that uses proof-of-work technology to generate new blocks and manage transactions. The Primecoin system is different in that it uses the computation of undiscovered prime numbers as a complex mathematical problem that needs to be solved to create new blocks. In this way, the computing power and energy consumed by the cryptocurrency fulfils a useful scientific function.
  10. Ripple. It is a payment protocol that was introduced back in 2013. It provides for a real-time gross settlement system that is effectively used by some of the most prominent centralised financial institutions around the world. The XRP token is one of the leading tokens launched after bitcoin. The protocol is inherently designed to address scalability and can validate 1,500 transactions per second and can reach 50,000 transactions per second. XRP is ranked seventh in the cryptocurrency rankings.

Capitalisation table of the ten most expensive cryptocurrencies

Cryptocurrency Total gross value
Bitcoin (BTC) $50 858 454 095
Ethereum (ETH) $24 200 184 304
Tether USDt (USDT) $99,535,528,084
BNB (BNB) $2,578,745,869
Solana (SOL) $6,067,624,005
XRP (XRP) $2,523,069,524
USDC (USDC). $10,156,845,916
Cardano (ADA) $952,647,152
Dogecoin (DOGE) $3,000,810,029
Shiba Inu (SHIB) $4,164,884,123

Bitcoin history

In order to better understand the origins of bitcoin, it’s worth starting a little further back. In the 1980s, an informal group of young idealistic cryptographers and computer scientists formed in the United States. The participants were obsessed with the idea of anonymity and digital freedom, which they planned to achieve through the use of cryptography and technologies that enhanced online anonymity.

Even though the web was not as advanced as it is today, or even much like today’s Internet, the cypherpunks foresaw the problem of online privacy and were in many ways ahead of their time. Today, we often unknowingly share a huge amount of personal information and metadata with commercial organisations and governments. The world is gradually turning into a kind of digital concentration camp. The task of its creators is to make this transformation gradual and imperceptible to the majority of the population. The cypherpunks anticipated this and fought against these trends.

A seminal influence on the formation of the group was the early work of mathematician and inventor David Chaum on the topics of digital identification, blind signatures, and digital untraceable payments. David Chaum made a huge contribution to the development of cryptography, and his ideas and developments had a profound impact on young enthusiasts, in many ways forming the basis around which the crypto community took shape.

It must be said that in those days, no one but special services were involved in encryption on the network. Nevertheless, the methods were becoming available, and the cipherpunks were popularisers of the use of these methods against the “all-seeing eye of Big Brother”. They wanted to turn complex and highly specialised, but in their opinion necessary for the development of a free society, technologies into a convenient and indispensable toolkit for the average network user.

Cipherpunks (from the word cipher and punk/cyberpunk) communicated at that time through mailing lists, so-called remailers. These were systems that sent messages received from authors to a certain list of addresses (participants of correspondence), something like a forum, but when forums didn’t exist yet.

Gilmore’s band

In 1992, John Gilmore, Eric Hughes, and Timothy May created their own mailing list. The founders met monthly at Cygnus, a company founded by Gilmore (absorbed by Red Hat in 1999), and discussed mathematics, cryptography, computer science, politics and philosophy. In 2 years, their mailing list grew to 700 members and became one of the largest and most active in the community. New members learnt about this group through word of mouth. Satoshi Nakamoto, the future mysterious creator of bitcoin, was on this mailing list.

Satoshi Nakamoto is a pseudonym, the identity of the person (or group of people) hiding behind it is not known, although the community has guessed who it is with a high degree of probability by now.

On the mailing list, the Cipherpunks not only gave the theoretical arguments concerning privacy and the extent of de-anonymisation, which were recurring themes, but also exposed and dissected various covert government spying initiatives. In particular, the Cipherpunks exposed the design of the Clipper phone chip, which the US government intended to be embedded in the equipment of telecoms companies. The chip provided encryption of telephone conversations to protect conversations from fraudsters, but not only. It also provided the intelligence services with all possibilities for covert wiretapping of any number. As you can see, this was probably the main task of the new chip. As a result of a great public outcry and long discussions, the project was closed.

Table with Bitcoin value as of 1 January from 2012 to 2024

Year Cost as of 1 January (USD)
2012 5.27
2013 13.30
2014 770
2015 315
2016 434
2017 998
2018 13412
2019 3740
2020 7200
2021 29374
2022 47738
2023 16500
2024 44172

 

The creation of Bitcoin

The story of Bitcoin begins long before its actual creation, in a world where the idea of digital money has been in the air for a long time. Scientists and cryptographers have been working for decades to create a secure digital currency. Projects like Wei Dai’s b-money and Nick Szabo’s Bit Gold proposed concepts very similar to what later formed the basis of Bitcoin, but were never put into practice.

In October 2008, a mysterious figure (or group of individuals) under the pseudonym Satoshi Nakamoto published a white paper entitled “Bitcoin: A Peer-to-Peer Electronic Cash System”. The paper presented the concept of a decentralised currency that does not require trust in a central authority or intermediaries to secure transactions. Satoshi described a system using blockchain, a decentralised transaction database maintained by a network of nodes.

In January 2009, Satoshi Nakamoto mined the first Bitcoin block, the genesis block, and from that moment Bitcoin began its existence. From that point on, Satoshi and early members of the network began using and improving Bitcoin, discussing it in forums and on the crypto mailing list.

Initially Bitcoin had no real value in conventional currencies and the first transactions were more of an experiment. The historic moment was the purchase of two pizzas for 10,000 BTC in May 2010, which is now considered one of the first real uses of Bitcoin as a medium of exchange.

Satoshi Nakamoto remained active in the development of Bitcoin until late 2010, after which he handed over management of the project to Gavin Andresen and disappeared, leaving behind many unresolved questions about his identity and motives.

After Satoshi’s departure, Bitcoin began to attract more and more attention. Its value began to rise, attracting investors, speculators and, unfortunately, criminals who saw it as a tool for money laundering and other illegal transactions, especially on the dark web, on platforms like Silk Road.

However, along with the negative attention, Bitcoin’s popularity as an alternative to traditional financial systems grew, especially during financial crises when people were looking for more stable stores of value.

Over the years, Bitcoin and blockchain technology have become recognised not only as an investment tool, but also as the basis for new financial and technological innovations. The creation of smart contracts, decentralised finance (DeFi), and non-fungible tokens (NFT) has shown that the blockchain’s potential is much broader than just a medium of exchange.

The story of Bitcoin’s creation is a story of innovation, mystery and inevitable challenges. Bitcoin has not only survived against scepticism and opposition, but has become a leading cryptocurrency that continues to inspire the creation of new technologies and change the understanding of the financial system as a whole. While remaining a hotly debated topic, Bitcoin has certainly left an indelible mark on the history of finance and technology.

Bitcoin history in numbers

In January 2009, Nakamoto created the first block on the bitcoin network, known as the “genesis block” or “block #0”. This is where the history of BTC begins. In its early days, bitcoin had no practical value and was mainly used to test the network and demonstrate the principles of blockchain technology. However, as time went on, more and more people began to learn about bitcoin and its potential.

In 2010, the first bitcoin exchange, Bitcoin Market, was opened and the bitcoin exchange rate was set for the first time: 1 bitcoin was worth about 0.003 USD. In the same year, the first real purchase using bitcoin was made: user Laszlo Hanech bought two pizzas for 10,000 BTC.

In 2011, bitcoin began to attract more attention and interest. It became more popular after the emergence of Silk Road, an anonymous marketplace on the “dark side” of the Internet where bitcoin was used as the main means of payment. This led to an increase in demand for bitcoin, resulting in its value gradually rising.

In 2013, the price for 1 BTC exceeded $100. In November of the same year, bitcoin reached a value of $1000 for the first time. During this period, there was a significant inflow of investments into the bitcoin industry, and new cryptocurrencies also appeared.

In 2014, there was a lull: the price of bitcoin fell significantly due to various problems, including the hacking of the major exchange Mt. Gox. However, by 2016, BTC recovered and continued to grow, strengthening its position as the world’s leading cryptocurrency.

From 2017 to 2018, bitcoin experienced incredible ups and downs. In December 2017, the bitcoin price reached an all-time high, surpassing $19,000 per unit. However, a sharp drop followed, and by the end of 2018, the price had fallen to $3,000.

In 2019, bitcoin began to show signs of recovery after a precipitous drop in price in 2018. Key trends this year included increased interest from institutional investors, the adoption of bitcoin as a means of payment by leading technology companies, and growing acceptance by regulators around the world. By the end of 2019, the price of the first cryptocurrency had recovered to ~$7,000.

The year 2020 was a special year for BTC. This was the year of the halving, which occurs every four years and halves the reward for mining new blocks. Halving leads to a reduced supply of new bitcoins and could theoretically lead to higher prices. In addition, the global COVID-19 pandemic has triggered a worldwide economic crisis and many investors have turned to bitcoin as “digital gold” – a safe haven in times of uncertainty. By the end of 2020, the bitcoin price had surpassed its previous record, reaching $20,000.

In 2021, bitcoin continued its surge, reaching new all-time highs. Companies such as Tesla announced large investments in bitcoin and began accepting it as payment, raising BTC’s status as the world’s leading cryptocurrency. In addition, several bitcoin-ETFs were launched at that time, making it easier for institutional investors to access BTC. In October 2021, the price of bitcoin surpassed $60,000.

And in 2022, a bear cycle began, during which the price of BTC fell to $16,000.

By mid-2023, the bear cycle is gradually coming to an end with the next halving and the arrival of large investment funds in the crypto market. Also, the emergence of stricter regulatory measures in different countries leads to further development of the cryptocurrency ecosystem and increased transparency.

Today, bitcoin is actively used as a means of investment, speculation and, in some cases, for transactions. Its influence extends beyond the financial sector and is driving the development of new technologies and concepts such as blockchain and decentralised finance.

Bitcoin price 2012 – 2024

Bitcoin price 2012 - 2024

Blockchain history

The history of blockchain begins long before Bitcoin and related cryptocurrencies. The concept of a distributed ledger that does not require a central governing body was proposed back in 1991 by Stuart Haber and W. Scott Stornetta. Their work was aimed at creating a system that could securely store time-stamped documents that could not be altered or tampered with. This idea became fundamental to future developments in blockchain.

Bitcoin and the first practical blockchain

In 2008, a person or group of people under the pseudonym Satoshi Nakamoto published a white paper describing the digital currency Bitcoin and its supporting blockchain technology. This was the first practical application of blockchain, where it was used as a decentralised and distributed registry of all transactions on the Bitcoin network. The concept of Proof of Work allowed the network to achieve consensus in a decentralised manner, ensuring a safe and secure system.

Expanding blockchain’s capabilities

With the success of Bitcoin, attention to blockchain has increased dramatically. Developers and researchers began exploring other potential applications of the technology beyond cryptocurrencies. In 2013, Vitalik Buterin proposed the creation of Ethereum, a platform that expanded the blockchain’s uses by introducing “smart contracts.” These self-executing contracts encoded in the blockchain allowed for the automated execution of agreements without the need for intermediaries, paving the way for the creation of decentralised applications (DApps).

Blockchain beyond finance

Since then, blockchain has found applications in a wide variety of fields, including logistics, healthcare, identity, real estate and many others. Companies and governments around the world have begun to explore how blockchain can make their operations more transparent, secure and efficient. For example, the use of blockchain for supply chains can track the origin of goods, ensuring their authenticity and preventing counterfeiting.

Issues and challenges

Despite its significant potential, blockchain faces a number of challenges, including scalability, energy consumption (especially for proof-of-work systems) and data privacy issues. Addressing these challenges is the subject of active research and development in cryptography and information technology.

The future of blockchain

The future of blockchain looks promising, with continued innovation and research aimed at overcoming existing obstacles. Second- and third-generation technologies, such as the Lightning Network for Bitcoin and various Ethereum scaling solutions, promise to make blockchain more accessible and suitable for a wide range of applications.

The history of blockchain is a story of continuous innovation and the search for new ways to use the technology to create a more secure, open and fair digital future. From a simple mechanism to back cryptocurrencies to the foundation for a new generation of internet technologies, blockchain continues to transform the way we interact and conduct business on a global scale.

 

History of blockchain by year

1991-2008: the early years of blockchain technology.

How did blockchain come to be? Stuart Haber and W. Scott Stornetta introduced what many people have come to call blockchain in 1991. Their first work involved working on a cryptographically secure blockchain in which no one could tamper with the timestamps of documents.

In 1992, they modernised their system to include Merkle trees, which improved efficiency, allowing more documents to be collected on a single blockchain. However, it was in 2008 that the blockchain story begins to gain relevance, thanks to the work of one person or group of people named Satoshi Nakamoto.

Satoshi Nakamoto is considered the brain behind blockchain technology. Very little is known about Nakamoto, as people believe he may have been the person or group of people who worked on Bitcoin, the first application of digital ledger technology.

Nakamoto conceptualised the first blockchain in 2008, from where the technology evolved and found its way into many applications beyond cryptocurrencies. Satoshi Nakamoto released the first white paper on the technology in 2009. In this paper, he detailed how the technology was well equipped to increase digital trust, given the decentralisation aspect which meant that no one would ever control anything.

Nakamoto conceptualised the first blockchain in 2008, from where the technology evolved and found its way into many applications beyond cryptocurrencies. Satoshi Nakamoto released the first white paper on the technology in 2009. In this paper, he detailed how the technology was well equipped to increase digital trust, given the decentralisation aspect which meant that no one would ever control anything.

Blockchain structure

Simply put, a blockchain is a distributed peer-to-peer ledger that is protected and used to record transactions across many computers. The contents of the ledger can only be updated by adding another block linked to the previous block. It can also be thought of as a peer-to-peer network running on top of the Internet.

From a layman’s or business perspective, blockchain is a platform on which people are allowed to conduct any transaction without the need for a central or trusted arbiter.

The created database is shared among the network members in a transparent way, so that everyone can access its contents. The database is managed autonomously using peer-to-peer networks and a time stamp server. Each block in the blockchain is organised in such a way that it refers to the contents of the previous block.

The blocks that make up a blockchain contain transaction packets approved by the participants in the network. Each block comes with the cryptographic hash of the previous block in the chain. Learn more about what a blockchain is.

Blockchain technology

Bitcoin emerged in 2008 as the first application of blockchain technology. Satoshi Nakamoto described it in his white paper as an electronic peer-to-peer system. Nakamoto formed a genesis block, from which other blocks linked together were mined during the mining process, resulting in one of the largest chains of blocks carrying various information and transactions.

Since Bitcoin, the blockchain application, went live, several applications have emerged that seek to utilise the principles and capabilities of digital ledger technology.Thus, the history of blockchain contains a long list of applications that have emerged with the development of this technology.

In a world where innovation is on the doorstep of the day, Vitalik Buterin is among the list of developers who believe that Bitcoin has not yet reached the point where it can utilise the full potential of blockchain technology.

Concerned about the limitations of Bitcoin, Buterin began working on what he believed would be a flexible blockchain that could perform a variety of functions in addition to a peer-to-peer network. Ethereum was born as a new public blockchain in 2013 with additional functionality compared to Bitcoin, and was the development that proved to be a turning point in blockchain history.

Buterin differentiated Ethereum from the Bitcoin blockchain by including a feature that allows people to record other assets such as slogans as well as contracts. The new feature expanded Ethereum’s functionality from a cryptocurrency to a platform for developing decentralised applications.

Officially launched in 2015, the Ethereum blockchain has become one of the largest applications of blockchain technology, given its ability to support smart contracts used to perform various functions. The Ethereum blockchain platform has also managed to gather an active developer community that has created a real ecosystem.

The Ethereum blockchain handles the largest number of daily transactions due to its ability to support smart contracts and decentralised applications. Its market capitalisation has also increased significantly in the cryptocurrency space.

The history and development of blockchain does not end with Ethereum and Bitcoin. In recent years, a number of projects have utilised the full capabilities of blockchain technology. New projects have sought to address some of the shortcomings of Bitcoin and Ethereum in addition to new features that take advantage of the blockchain’s capabilities.

Some of the new blockchain applications include NEO, announced as the first open-source decentralised blockchain platform launched in China. Despite the fact that this country has banned cryptocurrencies, it remains active when it comes to blockchain innovation. NEO is positioning itself as China’s Ethereum, having already received support from Alibaba CEO Jack Ma as it plans to make the same impact as Baidu in the country.In the race to accelerate the development of the Internet of Things, some developers, have utilised blockchain technology and in the process, came up with IOTA. The cryptocurrency platform is optimised for the Internet of Things ecosystem as it aims to provide zero transaction fees as well as unique verification processes. Some scalability issues associated with Blockchain1.0 Bitcoin are also discussed.

In addition to IOTA and NEO, other second-generation blockchain platforms are also making ripple effects in the sector. The Monero Zcash and Dash blockchains have emerged as a way to address some of the security and scalability issues associated with early blockchain applications. Named Altcoins, these blockchain platforms aim to provide a high level of privacy and security in transactions.

The blockchain story discussed above involves publicly available blockchain networks, whereby anyone can access the contents of the network. However, as the technology has evolved, a number of companies have begun to adopt the technology internally as a way to improve operational efficiency.

Large enterprises are investing heavily in hiring specialists as they seek to gain an edge in utilising this technology. Companies such as Microsoft appear to have taken the lead in exploring blockchain technology applications, leading to what has become known as private, hybrid and federated blockchains.

Blockchain programming

In 2015, the Linux Foundation introduced the open source blockchain project to Umbrella. They continued to call it Hyperledger, which to date has acted as a distributed ledger development collaborative.Under the leadership of Brian Behlendorf, Hyperledger aims to foster cross-industry collaboration for blockchain and distributed ledger development.

Hyperledger focuses on encouraging the use of blockchain technology to improve the performance and reliability of existing systems to support global business transactions.

EOS, the brainchild of private company block.one emerged in 2017 when a white paper was published detailing a new blockchain protocol that runs on EOS as a native cryptocurrency. Unlike other blockchain protocols, EOS attempts to emulate the attributes of real computers, including CPUs and GPUs.

For this reason, EOS.IO becomes both a smart contract and decentralised application platform. Its main objective is to encourage the deployment of decentralised applications through an autonomous decentralised corporation.

The future of blockchain technology looks bright partly because governments and businesses are investing heavily in an effort to drive innovation and applications.

It is becoming increasingly clear that one day there will be a public blockchain that everyone can use.Blockchain proponents expect the technology to help automate most tasks performed by professionals in all sectors. The technology is already finding widespread use in supply chain management as well as in the cloud computing business. In the future, the technology should also find use in basic elements such as internet search engine.

As the technology evolves, Gartner Trend Insights expects at least one blockchain-based business to be valued at more than $10 billion by 2022. The research firm expects the value of businesses due to the growth of digital ledger technology to exceed $176 billion by 2025, and be worth more than $3.1 trillion by 2030.

Investments in cryptocurrencies

Investing in cryptocurrencies has attracted widespread investor attention over the past few years, offering both significant profit opportunities and unique risks. This article is intended to provide an overview of the cryptocurrency market, an understanding of its fundamentals, and risk management strategies for investors.

Cryptocurrency Basics

Cryptocurrencies are digital or virtual currencies that use cryptography to secure transactions and control the creation of new units. Bitcoin, launched in 2009, was the first cryptocurrency and is still the best known and most valuable. Since then, thousands of alternative cryptocurrencies (altcoins) have been created, each with their own unique characteristics and uses.

Why invest in cryptocurrencies

  1. High Yield Potential: Some cryptocurrencies have shown exponential growth in value, offering significant returns to investors.
  2. Portfolio diversification: Cryptocurrencies have a low correlation with traditional financial assets, making them a good tool for diversification.
  3. Innovative financial technologies: Investing in cryptocurrencies provides an opportunity to support the development of new financial technologies and decentralised applications.

Risks of investing in cryptocurrencies

  1. High volatility: Cryptocurrency prices can fluctuate wildly, which presents both opportunities and risks for investors.
  2. Regulatory uncertainty: The legal status of cryptocurrencies continues to evolve and future regulatory changes could impact the market.
  3. Technological and operational risks: Security issues such as hacker attacks and loss of access to wallets can result in loss of funds.
  4. Market manipulation: Smaller market size and lack of regulation can facilitate price manipulation.

Risk management strategies

  1. Diversification: Investing in different cryptocurrencies and other asset classes can reduce risk.
  2. Cautious investing: Invest only the amount you can afford to lose.
  3. Research and Education: Constantly research the market, technology and specific cryptocurrencies before investing.
  4. Use trusted platforms: Trade and store cryptocurrencies only on trusted and reliable platforms.
  5. Long-term investing: Consider cryptocurrencies as a long-term investment given their future growth potential.

Conclusion

Investing in cryptocurrencies offers unique opportunities and risks. Successful investors approach the market with caution, basing their decisions on thorough research and risk management. With the right approach, cryptocurrencies can be a valuable addition to an investment portfolio, offering both diversification and the potential for high returns.

What is crypto trading?

Cryptocurrency trading has become one of the most popular ways to invest and profit in the digital age. With the emergence of Bitcoin in 2009 and the subsequent development of thousands of alternative cryptocurrencies (altcoins), the market has provided traders with unprecedented opportunities for speculation. This article will examine key aspects of cryptocurrency trading, including strategies, risks, and best practices.

Cryptocurrency trading basics

Cryptocurrency trading involves buying and selling digital currencies through exchange platforms in order to profit from changes in their value. The main advantages of cryptocurrency trading are high market volatility, 24/7 trading, and accessibility to traders from all over the world.

Cryptocurrency trading strategies

  1. Long-term investing (HODLing): Buying and holding a cryptocurrency for a long time based on a belief in its long-term growth.
  2. Daytrading: Short-term trading in which traders buy and sell cryptocurrency within a single trading day to profit from short-term price fluctuations.
  3. Swing trading: A strategy focused on capturing trends and price fluctuations over the medium term, usually a few days to a few weeks.
  4. Scalping: Extreme short-term trading in which traders seek to profit from very small price changes by making many trades in a day.

Risks of cryptocurrency trading

  1. Market Volatility: Cryptocurrencies are subject to sudden and unpredictable price fluctuations, which can lead to both significant gains and losses.
  2. Regulatory risks: Governments and regulators around the world treat cryptocurrencies differently, which can affect their value and the legality of trading.
  3. Security: Hacker attacks on exchanges and wallets pose a significant risk of losing funds.
  4. Market manipulation: Small market size and lack of regulation can favour manipulation and arbitrage.

Cryptocurrency trading best practices

  1. Education and Analysis: Constantly study the market, analyse charts and follow the news to make informed decisions.
  2. Risk Management: Use risk management tools such as stop-loss orders to protect your capital.
  3. Diversification: Don’t put all your eggs in one basket. Spreading your investments across different assets can reduce risk.
  4. Mental preparation: Cryptocurrency trading requires equanimity and discipline. Do not give in to emotions and follow your trading plan.

Conclusion

Cryptocurrency trading offers significant profit opportunities, but comes with high risks. Success requires in-depth knowledge of the market, strict discipline and effective risk management. Beginning traders should approach trading with caution, investing only what they can afford to lose.

What is blockchain?

Blockchain, the technology behind cryptocurrencies like Bitcoin, has become one of the most talked-about innovations of the past decade. Its principles and capabilities extend far beyond finance, promising to radically change a host of industries, from banking to supply chains. In this article, we’ll dive into understanding what blockchain is, how it works, and what prospects it holds.

What is Blockchain?

A blockchain is a distributed database or digital ledger that stores data in blocks linked and protected by cryptography. Each subsequent block contains a hash (unique cryptographic code) of the previous block, creating a chain. This ensures data immutability and transparency, as changing information in one block will require changes to all subsequent blocks, which is virtually impossible without detection.

Key Features of Blockchain

  1. Decentralisation: Unlike traditional databases managed by a central authority, blockchain is distributed among all participants in the network. This reduces the risk of centralised failures and attacks.
  2. Transparency: While participants may remain anonymous, all transactions are fully open for all network members to view, ensuring a high level of transparency.
  3. Immutability: Once data is added to the blockchain, it cannot be changed without simultaneously changing all subsequent blocks and obtaining the consent of the majority of the network participants.
  4. Censorship-resistant: Blockchain ensures that data cannot be unilaterally altered or deleted.

Applications of Blockchain

  1. Cryptocurrencies: The best known application of blockchain, where it is used to create and manage digital currencies such as Bitcoin.
  2. Smart Contracts: Automatically enforceable contracts whose terms are written into the blockchain, providing security and reducing the need for intermediaries.
  3. Supply chains: Blockchain enables transparent tracking of the origin and movement of goods from producer to consumer.
  4. Identification: Provides a secure and immutable way to verify identity and achievements.
  5. Voting: Potential for secure and genuine voting systems.

Challenges and Prospects

Despite its significant benefits, blockchain faces a number of challenges, including scalability, energy consumption (especially for Proof of Work protocols) and regulatory issues. Nevertheless, ongoing research and development efforts are aimed at overcoming these obstacles, paving the way for wider acceptance and application of the technology in various spheres of life.

Conclusion

Blockchain offers an innovative approach to recording data securely and transparently that has the potential to radically change many industries, from finance to data management. As the technology continues to evolve and improve, we can expect to see it increasingly used in our society.

Cryptocurrency with highest value

The cryptocurrency market continues to capture the attention of investors and enthusiasts around the world. With thousands of cryptocurrencies available, some stand out due to their high market capitalisation, which indicates investors’ confidence and their appreciation of the currency’s potential. In this article, we take a look at the largest capitalisation cryptocurrencies, their features and their importance in the market.

  1. bitcoin (BTC)

Bitcoin is undoubtedly the leader among cryptocurrencies in terms of market capitalisation. Created in 2009 by a mysterious developer (or group of developers) under the pseudonym Satoshi Nakamoto, Bitcoin introduced the world to the concept of blockchain and decentralised digital currencies. Not only does it remain the most widely recognised cryptocurrency, but it often serves as an “entry gate” for new entrants into the cryptocurrency market.

  1. Etherium (ETH)

Efirium is the second largest by market capitalisation and is a platform for creating decentralised applications (DApps) and smart contracts. Thanks to its flexibility and extensive programming capabilities, Efirium has become the basis for numerous projects in the field of decentralised finance (DeFi) and non-fungible tokens (NFT).

  1. Binance Coin (BNB)

Binance Coin is a utility token of the Binance exchange, one of the largest cryptocurrency exchanges in the world. BNB was originally launched on the Etherium blockchain, but has since migrated to Binance Chain’s own blockchain. The token is used to pay commissions on the exchange, participate in tokensales and as a medium of exchange in the Binance ecosystem.

  1. Cardano (ADA)

Cardano is a blockchain platform that focuses on security and sustainability through a multi-layered architecture. The project is designed with a focus on a scientific approach and formal code verification, which makes it one of the most interesting projects in the field of developing decentralised solutions and smart contracts.

  1. Ripple (XRP)

Ripple aims to simplify and cheapen international payments with its XRP token. Unlike most cryptocurrencies, Ripple is focused on co-operation with banks and financial institutions, offering them a fast and reliable alternative to traditional payment systems.

Market Capitalisation: Trust Indicator

The market capitalisation of a cryptocurrency is a key indicator reflecting investor confidence and the overall value attributed by the market to the cryptocurrency. It is calculated as the product of the current token price by the total number of tokens in circulation.

Conclusion

The largest capitalisation cryptocurrencies continue to dominate the market, offering innovative solutions to financial and technological challenges. Their success and popularity demonstrate the growing recognition of cryptocurrencies as a significant part of today’s economy and investment landscape. While the cryptocurrency market remains volatile, these currencies demonstrate the blockchain’s potential to change the world we live in.

What is ERC-20?

ERC-20 (Ethereum Request for Comments 20) is the technical standard used for all smart contract tokens on the Ethereum blockchain. Since its proposal in 2015 by Fabian Vogelsteller and other Ethereum participants, ERC-20 has become the primary standard for token creation and issuance in the Ethereum ecosystem. This standard defines a set of rules that all tokens on the platform must follow, ensuring their interoperability with other contracts and applications, including wallets and exchanges.

Main Features of the ERC-20

ERC-20 defines six mandatory features that must be implemented in a token, as well as three optional features:

  1. totalSupply: Returns the total number of tokens in circulation.
  2. balanceOf: Returns the number of tokens belonging to a certain address.
  3. transfer: Allows you to transfer tokens from one address to another.
  4. transferFrom: Allows contracts to transfer tokens on behalf of the owner.
  5. approve: Allows one address (owner) to authorise another address (delegate) to use a certain number of tokens on its behalf.
  6. allowance: Returns the number of tokens that the delegate is authorised to use on behalf of the owner.

Optional features include token name, character, and number of possible decimal places.

The importance of ERC-20 to the Ethereum Ecosystem

The ERC-20 standard plays an important role in the Ethereum ecosystem by enabling interoperability between tokens and other smart contracts. This makes it easier to integrate new tokens into existing applications and services such as wallets, exchange platforms and decentralised financial applications (DeFi).

Examples of ERC-20 Applications

ERC-20 tokens are used for a wide variety of purposes, including:

  • Utility tokens: provide access to certain functions of a decentralised application (DApp).
  • Management tokens: give a voice within the management of a project or platform.
  • Security tokens: represent rights to share in the profits or revenue of a project.
  • Stablecoins: pegged to the value of a fiat currency or other asset, offering price stability.

Challenges and Limitations

Despite its popularity, the ERC-20 standard has some shortcomings, such as the lack of a standardised mechanism to prevent erroneous transfers of tokens to contracts that cannot process them. This has led to the development of new standards, such as ERC-223 and ERC-721 (for non-interchangeable tokens), which seek to address some of these limitations.

Conclusion

ERC-20 remains one of the most important and influential standards on the Ethereum blockchain. It has underpinned countless projects and tokens, contributing to the growth and development of decentralised finance and applications. Despite its limitations, ERC-20’s popularity and versatility make it a key component in the cryptocurrency ecosystem.

What is TRC-20?

TRC-20 is a token standard on the TRON blockchain that was designed to enable the creation and deployment of decentralised applications (DApps) and smart contracts in the TRON ecosystem. Similar to ERC-20 in Ethereum, TRC-20 defines a set of rules that tokens must follow to ensure interoperability within the TRON blockchain. This standard ensures uniform interoperability between different decentralised applications, games, exchanges, wallets and other services.

Features and Benefits of the TRC-20

  • High Performance: TRON is designed for high performance and scalability, making TRC-20 tokens ideal for mainstream use in applications requiring fast transactions.
  • Ethereum Compatibility: Due to the similarities with ERC-20, developers can easily migrate their projects from Ethereum to TRON, facilitating the growth and diversity of the TRON ecosystem.
  • Low Transaction Costs: One of the key advantages of TRC-20 is its low transaction costs, making the use of tokens cost-effective for users and developers.

Technical Details

The TRC-20 standard defines a set of functions and events similar to ERC-20, including:

  • totalSupply: Returns the total number of tokens in circulation.
  • balanceOf: Shows the balance of tokens at a specific address.
  • transfer: Allows tokens to be transferred between addresses.
  • transferFrom, approve, and allowance: Manage tokens on behalf of other addresses, enabling complex financial mechanisms such as automated management and decentralised exchanges.

Application of TRC-20

TRC-20 tokens are used in a wide range of applications within the TRON ecosystem, including:

  • Decentralised Finance (DeFi): The creation of stablecoins, control tokens, and other financial instruments.
  • Decentralised Applications (DApps): Tokens can serve as an internal currency in games, social networks, and other applications.
  • Digital Assets and Collectibles: Although a different standard (TRC-721) is used for non-fungible tokens (NFTs), TRC-20 tokens can play a role in ecosystems related to trading and exchanging digital assets.

Challenges and Prospects

Like other blockchain platforms, TRON and the TRC-20 standard face challenges, including issues of scalability, security and decentralisation. Despite these challenges, the continued development of the technology and a growing community of developers and users are strengthening TRON’s position as a significant platform for the creation and use of decentralised applications and financial services.

Conclusion

TRC-20 is a key component of the TRON ecosystem, providing a standardised and efficient way to create tokens for a wide range of applications. With its performance, low transaction costs and interoperability with other standards, TRC-20 plays an important role in the development of blockchain and decentralised technologies.

What is cryptocurrency mining?

Cryptocurrency mining is the process of confirming transactions and adding them to a publicly available ledger known as the blockchain. It also involves releasing new coins into circulation as a reward for work done. Mining is a critical element of the security and operation of many cryptocurrencies such as Bitcoin, Ethereum (before the move to Proof of Stake) and many others.

How mining works

  • Consensus Algorithms: The basis of mining is a consensus algorithm, which determines how the participants in the network agree on the current state of the blockchain. The most common are Proof of Work (PoW) and Proof of Stake (PoS), although mining is directly related mainly to PoW.
  • Proof of Work (PoW): In PoW networks, miners compete to solve complex mathematical problems that require significant computational resources. The first miner to find a solution gets the right to add a new block to the chain and is rewarded with cryptocurrency.
  • Mining difficulty: The mining difficulty is automatically adjusted based on the total processing power of the network to keep the average time to find a new block constant.

Mining equipment

  • ASIC (Application-Specific Integrated Circuit): Specialised chips designed exclusively for mining a specific cryptocurrency. They offer the highest efficiency for mining, but their cost and specialisation limit their use.
  • GPU (Graphics Processing Unit): Video cards that can be used to mine various cryptocurrencies. They are less efficient than ASICs, but more versatile.
  • CPU (Central Processing Unit): CPU-based mining is now virtually unused due to its low efficiency and high competition from ASICs and GPUs.

Environmental impact

Mining, especially PoW-based mining, requires significant energy resources, raising concerns about its environmental impact. Finding alternative, less energy-intensive consensus algorithms such as PoS and utilising renewable energy sources is becoming a priority to reduce the carbon footprint of cryptocurrencies.

The future of mining

Given the environmental, technical and economic challenges, the future of cryptocurrency mining is likely to involve a shift to more sustainable forms of mining and maintaining blockchain networks. There is already a trend to move away from PoW to PoS and other alternative algorithms that require less energy.

Conclusion

Mining plays a key role in the functioning and security of blockchain networks, but also faces criticism due to its environmental impact. Finding a balance between security, efficiency and sustainability remains a major challenge for the cryptocurrency community.

What is Bitcoin halving?

Bitcoin halving is an event in which the reward for mining a new block in the bitcoin blockchain is halved. This mechanism was built into the bitcoin protocol by its creator (or group of creators) under the pseudonym Satoshi Nakamoto. Halving occurs every 210,000 blocks, which roughly corresponds to four years. The purpose of halving is to control inflation and gradually reduce the number of new coins put into circulation until the limit of 21 million bitcoins is reached.

How halving works

  • Frequency: Halving occurs approximately every 4 years. The first bitcoin halving occurred in 2012, the second in 2016, and the third in 2020.
  • Mechanism: At the moment of halving, the reward for each new block found by miners is halved. For example, if before the halving, miners received 12.5 bitcoins per block, then after the halving they receive only 6.25.

Impact on the bitcoin ecosystem

  • Inflation: Halving helps control inflation within the bitcoin ecosystem by gradually reducing the rate of increase in coin supply.
  • Bitcoin price: Historically, each halving has been accompanied by an increase in interest in bitcoin and a rise in its price. This is due to expectations of a reduced supply of new coins on the market.
  • Mining: For miners, halving means a decrease in bitcoin revenue per block found. This can lead to less efficient miners going out of business and an increase in the concentration of hashrate in the hands of big players.

Prospects after the 21 million limit is reached

  • Transaction fees: When the last bitcoin is mined, miners’ income will depend entirely on transaction fees. This should provide them with the motivation to continue supporting the network.
  • Impact on price: A limited supply of bitcoins could lead to an increase in its value in the long run, given the growing demand.

Conclusion

Bitcoin’s halving is a key event in the life of the cryptocurrency that affects many aspects of its ecosystem, from inflation to price dynamics. It emphasises the deflationary nature of bitcoin in contrast to the inflationary policies of traditional fiat currencies. While the short-term effects of halving can vary, the long-term impact is generally considered positive for bitcoin’s value and its attractiveness as an investment asset.

What is a cold wallet?

In the world of cryptocurrencies, security of funds is one of the top priorities for investors and users. Cold wallets are a cryptocurrency storage tool that provides a high level of security by not having a constant internet connection. This is in contrast to hot wallets, which, while offering the convenience of fast transactions, are at risk of hacking attacks. In this article, we will look at what a cold wallet is, its advantages and disadvantages, and what types of cold wallets exist.

What is Cold Wallet?

A cold wallet is a physical device or storage medium, not connected to the internet, used to store cryptocurrency assets. Its main purpose is to provide protection against online attacks and unauthorised access to funds. Cold wallets can be in the form of USB devices, paper wallets or even specialised hardware devices.

Advantages of Cold Purses

  • Security: Not having a constant internet connection greatly reduces the risk of cyber attacks and hacking.
  • Control: The user has full control over their cryptocurrency assets as the keys are stored offline.
  • Virus Resistant: Since data is not transmitted over the internet, cold wallets are not at risk of viruses or malware.

Disadvantages of Cold Purses

  • Usability: Transactions require funds to be transferred from a cold wallet to a hot wallet, which may be less convenient than the hot wallets that are always available.
  • Risk of loss: If a physical device is lost or damaged, it may be difficult or impossible to regain access to funds.
  • Start-up costs: Some hardware cold wallets can be expensive to purchase.

Types of Cold Purses

  1. Hardware wallets: These are specialised flash drive-like devices that allow you to store cryptocurrency keys offline and make transactions by connecting to a computer when needed.
  2. Paper wallets: These are physical documents containing public and private keys in the form of QR codes or other formats. Paper wallets are considered one of the most secure wallets because the information on them cannot be stolen online.
  3. Metal wallets: These are devices for storing key information on metal plates, making them resistant to physical wear and tear, water and fire.

Conclusion

Cold wallets are an important tool for securing cryptocurrency assets. When choosing between hardware, paper, and metal wallets, users should consider their needs for security, convenience, and cost. Despite some inconveniences in use and risks associated with losing the device, the benefits of cold storage make it the preferred choice for long-term preservation of significant cryptocurrency assets.

How many bitcoins can you mine?

The maximum number of bitcoins that can be mined is strictly limited by the Bitcoin algorithm to 21 million coins. This limit was set by Bitcoin’s creator, known as Satoshi Nakamoto, and is a key part of Bitcoin’s monetary policy to prevent inflation. As it approaches this limit, the reward for mining new blocks will be halved roughly every four years in a process known as halving. The last bitcoin is expected to be mined around 2140, after which miners will be rewarded solely for processing transactions and maintaining the blockchain through transaction fees.

How much has been mined now?
As of the beginning of 2024, approximately 19,361,400 bitcoins have been mined. This number is based on the assumption that a halving occurs every four years and the initial block reward was 50 bitcoins, which is halved with each halving

Where can I buy cryptocurrency safely?

Buying cryptocurrency has become commonplace, but it’s always important to approach the process with due caution to ensure the safety of your investment. Here are a few key points to consider when choosing a platform to buy cryptocurrency:

  1. Platform reputation

Choose exchanges and platforms with a good reputation, which have been on the market for a long time and have positive feedback from users. Conduct research on the internet, read reviews on forums and specialised sites.

  1. safety

Make sure the platform you choose offers advanced security measures such as two-factor authentication (2FA), storing most funds in cold wallets (not connected to the internet) and other data protection protocols.

  1. Regulation

Preference should be given to platforms that are regulated in a jurisdiction with clear rules for cryptocurrencies, as this can offer an extra layer of protection and reliability.

  1. Fees and commissions

Carefully review the fee structure on the platform. Fees can vary widely and include transaction fees, withdrawal fees, and currency exchange fees.

  1. Ease of use

The platform should be clear and easy to use, offer an easy registration and verification process, and an intuitive interface.

Examples of popular and reliable platforms:

  • Coinbase: One of the largest and most well-known cryptocurrency exchanges in the world, offers a wide range of cryptocurrencies for buying and selling.
  • Binance: The world’s largest cryptocurrency exchange by trading volume, offers a large number of cryptocurrencies and various financial services.
  • Kraken: Known for its strict security measures and wide range of cryptocurrencies offered.
  • Bitstamp: One of the oldest cryptocurrency exchanges, known for its reliability and ease of use.

Before choosing a platform, it is advisable to do your own research and compare the conditions and security of different platforms. It is also always a good idea to keep in mind that investing in cryptocurrencies involves high risks, including the possibility of losing your investment.

How can you buy cryptocurrency?

Buying cryptocurrency has become affordable and relatively easy thanks to various online platforms and services. Here is a step-by-step guide on how you can buy cryptocurrency:

Step 1: Choosing a cryptocurrency exchange or broker

The first step is to choose a platform to buy cryptocurrency. It can be a cryptocurrency exchange such as Binance, Coinbase, Kraken, or a cryptocurrency broker. It is important to choose a reliable and safe platform with a good reputation.

Step 2: Account registration and verification

After selecting a platform, you will need to create an account. The registration process usually requires you to confirm your email and provide personal information. Most platforms also require you to go through a KYC process, which may include uploading a photo ID and possibly confirming your residential address.

Step 3: Deposit funds

To buy cryptocurrency, you will need to deposit fiat money (such as USD, EUR) into your account at an exchange or broker. This can be done in a variety of ways, including bank transfer, payment cards (debit or credit cards) or through other payment systems.

Step 4: Buying cryptocurrency

After funding your balance, you can buy cryptocurrency. On the platform, select the cryptocurrency you want to buy and specify the purchase amount in fiat currency or the amount of cryptocurrency you want to buy. Confirm the transaction according to the platform’s instructions.

Step 5: Cryptocurrency Storage

Once purchased, you can store the cryptocurrency directly on the exchange or transfer it to an external wallet for added security. There are different types of wallets, including hot (online) and cold (offline) wallets.

Important considerations:

  • Security: Always use two-factor authentication and make sure your personal information and funds are protected.
  • Commissions: Take into account all transaction fees and exchange rates, which can vary significantly between platforms.
  • Taxes: Keep in mind that income from trading cryptocurrencies may be taxed in your country.
  • Risks: The cryptocurrency market is very volatile and investing in cryptocurrencies carries a high risk of losing your investment.

By following these steps, you will be able to buy cryptocurrency safely and efficiently on the platform of your choice.

What is Bitcoin ATM?

A Bitcoin ATM (Bitcoin ATM) is a physical terminal that allows users to buy or sell bitcoin and, occasionally, other cryptocurrencies for cash or with bank cards. These devices make the process of exchanging cryptocurrencies more accessible to the general public, offering a simple and fast way to conduct transactions without having to go through the complicated procedure of registering with cryptocurrency exchanges.

The main features of Bitcoin ATM:

  • Accessibility: Bitcoin ATMs are located in various public places such as shopping centres, airports, cafes and so on, making it convenient for a wide audience to buy and sell cryptocurrencies.
  • Ease of use: Just follow the instructions on the device screen to complete a transaction. The buying or selling process usually takes only a few minutes.
  • Anonymity: While some ATMs require identity verification, such as scanning an ID card or entering a phone number, many offer the ability to make transactions anonymously, especially for small purchases.
  • High fees: Using Bitcoin ATMs often comes with high exchange fees, which can be significantly higher than those charged by cryptocurrency exchanges. Commissions can vary, but often range from 5% to 10% or even more of the transaction amount.

How Bitcoin ATMs work:

  1. Buying cryptocurrency: To buy bitcoin, a user deposits cash at an ATM, scans the QR code of their bitcoin wallet on their mobile device, and the ATM transfers the purchased amount to the wallet.
  2. Selling cryptocurrency: To sell bitcoin, the user specifies the amount to be sold and provides the QR code of his wallet to receive the funds. After confirming the transaction with bitcoins, the ATM dispenses cash.

Using Bitcoin ATMs provides a convenient way to access cryptocurrencies, especially for those who prefer to make transactions in cash or who wish to buy or sell small amounts of cryptocurrency quickly. However, it is important to consider the high fees and potential identification requirements before using these devices.

Also, lawyers from Regulated United Europe provide legal services for obtaining a crypto license.



RUE customer support team

Milana
Milana

“Hi, if you are looking to start your project, or you still have some concerns, you can definitely reach out to me for comprehensive assistance. Contact me and let’s start your business venture.”

Sheyla

“Hello, I’m Sheyla, ready to help with your business ventures in Europe and beyond. Whether in international markets or exploring opportunities abroad, I offer guidance and support. Feel free to contact me!”

Sheyla
Diana
Diana

“Hello, my name is Diana and I specialise in assisting clients in many questions. Contact me and I will be able to provide you efficient support in your request.”

Polina

“Hello, my name is Polina. I will be happy to provide you with the necessary information to launch your project in the chosen jurisdiction – contact me for more information!”

Polina

CONTACT US

At the moment, the main services of our company are legal and compliance solutions for FinTech projects. Our offices are located in Vilnius, Prague, and Warsaw. The legal team can assist with legal analysis, project structuring, and legal regulation.

Company in Lithuania UAB

Registration number: 304377400
Anno: 30.08.2016
Phone: +370 661 75988
Email: [email protected]
Address: Lvovo g. 25 – 702, 7th floor, Vilnius,
09320, Lithuania

Company in Poland Sp. z o.o

Registration number: 38421992700000
Anno: 28.08.2019
Phone: +48 50 633 5087
Email: [email protected]
Address: Twarda 18, 15th floor, Warsaw, 00-824, Poland

Regulated United Europe OÜ

Registration number: 14153440–
Anno: 16.11.2016
Phone: +372 56 966 260
Email:  [email protected]
Address: Laeva 2, Tallinn, 10111, Estonia

Company in Czech Republic s.r.o.

Registration number: 08620563
Anno: 21.10.2019
Phone: +420 775 524 175
Email:  [email protected]
Address: Na Perštýně 342/1, Staré Město, 110 00 Prague

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