Bitcoin to Ethereum: The Growth of Cryptocurrency
When Wei Dai published an article in 1998 about what he described as b-money, a digital cash fortress cryptocurrency, some scholars called him a madman. It was believed that this technology was not possible.
Then, Nick Szabo, a cryptographer took it upon himself and designed a mechanism which probably became the first digital currency, “bit gold,” but it was never implemented.
Just eleven years after “Bit Gold”, Bitcoin was created by an anonymous figure who goes by the name Satoshi Nakamoto. It became the first digital cryptocurrency, which eventually opened the way for other cryptocurrencies to come on board. The word “Bitcoin” became synonymous with cryptocurrency.
THE DIGITAL BITCOIN
Bitcoin, since its inception, has dominated the digital currency market so much that it has become a brand to be reckoned with, thereby giving dollars a run for its value.
According to financial author and columnist, Mark T. Williams in 2014, Bitcoin has appreciated seven times greater than gold, eight times greater than S&P 500 and 18 times greater than the almighty US dollar.
Just like the paper currency, bitcoin has also gone through the cycle of appreciation and depreciation as it experienced the latter during the 2012-2013 Cypriot financial crisis. But later, it rose to a value of approximately 266 dollars on 10 April 2013 before eventually crashing to 50 dollars.
Bitcoin still remains the number one valued virtual currency with a market value of over seventy-one billion dollars as of August 2017.
Even with its great success, Bitcoin has been met with criticisms over Ponzi schemes. Various journalists, economists and the Central Bank of Estonia have voiced concerns that bitcoin is a Ponzi scam but 2014 reports by both the World Bank and Swiss Federal Council have come to the conclusion that it is not.
AND THEN CAME ETHEREUM
To remain at the top, you need to have a rival and the arrival of Etherum has also sent warning shots that in due time it might become a cryptocurrency to rule them all.
Unlike the anonymous founder of Bitcoin, Ethereum developers are Vitalik Buterin, Mihai Aisie, Anthony Di Lorio and Charles Hoskinson and in 2015, this currency was launched to become an active player in the cryptocurrency market. Its admission also brought great value to the Etherum brand.
Its dominance has put Etherum as the second most valued cryptocurrency with a value of about thirty-two billion dollars according to coinmarketcap.com.
As of 2017, Etherum supply rate has been projected to increase by 14.75%.
Entherum has had its own share of criticisms too as a finance blogger on FT Alphaville has accused this virtual currency as a hub for criminals using it to run Ponzi schemes and other forms of investment fraud.
A WORLD OF VIRTUAL CURRENCY
Looking at the 21st century and beyond, can a world of cryptocurrencies such as Bitcoin and Ethereum eventually dominate the paper currency? Will the world just simply get tired and abandon the virtual currency and return to the traditional means of means of exchange the paper currency?
Only time can tell. For now, the world is slowly embracing the use of virtual currency.