Thursday, December 1, 2022

Cryptocurrency: The Beginning Of The Trade-For-Profit Coinage

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When you ask the online traders who engage in Cryptocurrency trading how it came about, majority do not know and just conclude that no one knows how it started. But this just raises questions, just as the existence of God which is said never to have a beginning raises questions and controversy, even among the believers.
Nothing could have started out of the blues, it must have begun from a single thought in the mind of an individual, metamorphosed into a series of thoughts and imagery before actions and then a global spread and the mind believed to have conceived Crypto is David Chaum’s.Cryptocurrency: The Beginning Of The Trade-For-Profit CoinageIn 1983, the American cryptographer conceived an anonymous cryptographic electronic money called Ecash and in 1995 – 12 years after – he implemented it and it became known as Digicash. This early form of electronic payment required user software in order 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 National Security Agency published a paper entitled How to Make a Mint: the Cryptography of Anonymous Electronic Cash, describing a Cryptocurrency system. Another description, this time of b-money was published by Wei Dai, a Chinese Computer Engineer in 1998. Wei’s description characterized cryptocurrency as an anonymous, distributed electronic cash system.
Shortly thereafter, Nick Szabo came up with bit gold, described as an electronic currency system which required users to complete a proof of work function with solutions being cryptographically put together and published. It should be noted at this point that ‘bit’ is derived from the words binary digit, which is the smallest digital unit via which data is stored and represented on a computer.The first decentralized cryptocurrency, Bitcoin, which has eventually become the most popular was created in 2009 by presumably pseudonymous developer Satoshi Nakamoto. At this point, traders began investing but a few. A couple of years after, cryptotrading and then forex became the order of the day and more got wind of the system, although still with doubts and fears of the system crashing like the Ponzi, MMM and other schemes that had been launched.
Gradually, it became a means of payment among people who is in the system and sooner than enough, many more people got in the system – investing and trading. As Bitcoin trading increased, its financial equity increased against the world trade currency – Dollar – and again, many more invested, strengthening its rise and the cycle goes on and on.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 and yet, another notable cryptocurrency, Peercoin used a proof-of-work/proof-of-stake hybrid.
The world saw that soonest, nothing would stop Cryptocurrency from blooming so big and then become a tool for cyber crime, as a result of its anonymity. On the 6th of August 2014, the United Kingdom announced its Treasury had commissioned a study of Cryptocurrencies, and the roles if any, they could play in the nation’s economy. The study was also to report on whether regulation should be considered. In March 2018, the word cryptocurrency was added to the Merriam-Webster Dictionary.With Cryptocurrency becoming a payment option, a quick one at that, another reason many love it is its non-tie to any Government authority. It is not stored in any bank or any regulated platform but stored in a digital wallet, either online, on your computer, or on other hardware. Cryptocurrency are usually traded either with a credit card or, in some cases, through a process called ‘mining’. It is also anonymously moved – all that is needed is the address – a couple of numbers – the funds are to be sent to and boom, gone – there is no need for a name or means of Government identification.
Aside the anonymity and non-regulation, Cryptocurrencies are also preferred as it does not involve transaction fees, unlike the pieces of naira here and there that banks and other financial platforms deduct.Just as it seemed to have appeared from the blues, cryptocurrency’s value can change by the hour. An investment that may be worth thousands of U.S. dollars today might be worth only hundreds tomorrow. If the value goes down, there’s no guarantee that it will go up again. Some might get cryptocurrencies as an investment, just hoping the value goes up.
Although cryptocurrency transactions are anonymous, the transactions may be posted to a public ledger, like Bitcoin’s blockchain. A blockchain is a public list of records that shows when someone transacts with cryptocurrency. Depending on the cryptocurrency, the information added to the blockchain can include information like the transaction amount. The information also can include the sender’s and recipient’s wallet addresses — a long string of numbers and letters linked to a digital wallet that stores cryptocurrency. Both the transaction amount and wallet addresses could be used to identify who the actual people using it are.

Photos Credit: Getty

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