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Crypto, The Theft. The Scandal
Crypto Scams and Theft (2014 – 2015)
Bitcoin had become a hit among the users due to its anonymity. The decentralization meant it had no central controlling authority. These are the same features that made it attractive to criminals.
Mt. Gox, the largest crypto exchange, went offline in January 2014. The prominent exchange by then was running more than 70% of the crypto trades. It applied for bankruptcy within the year, citing hacking. Traders lost more than 850,000 BTC in the process. The investigations following the fall of the exchange never amounted to anything. The money lost by today's standards would be 15,300,000,000 USD.
Several other cases of scams and Ponzi schemes were prevalent at this point. Most people joined the schemes with making quick money in mind.
The Emergence of Ethereum and ICOs (2016 – 2017)
In the history of cryptos, only Ethereum gives Bitcoin a run. The crypto's token Ether is the second most traded in the crypto exchanges. It is also the second most valuable.
The rise of the coin was due to its supporting role. Bitcoin might have been valuable but only as a medium of exchange. Ethereum otherwise provided for a platform for developing other crypto projects.
It made it possible for developers to create decentralized applications. It would also support other financial crypto projects.
The platform was breaking the monopoly of the play stores. It was also liberalizing the other traditional financial services and institutions.
Ethereum also introduced the age of Initial Coin Offering (ICO). Before, fintech projects relied on private investors. The process would favor established companies offering shares through Initial Public Offering (IPO). It was hectic as it involved documentation with regulators and auditors. ICOs allowed upcoming projects to gain funding beforehand. It is easy to create and is not limiting on prospective investors.
Crypto Boom and Fall (2017 – 2018)
The market became crypto-friendly, and several virtual currencies were gaining value. Bitcoin was still leading as it rose to hit the highs of $20,000. All the other markets had a good run during the crypto boom until May of 2018.
The market then started correcting as the prices fell again.
The Launch of Central Bank Digital Currencies (2020 – Onwards)
The cryptos are in the latest growth trajectory. The governments have realized they cannot fight the crypto growth. For that, they are looking to join the blowing sector. It seeks to gain a foothold through the central bank digital currencies (CBDCs).
The CBDCs remains the sure way for the governments to keep their influence. It is more like traditional currencies online. The central bank would still manage the supply of the coins. The commercial banks remain the distributors and money retailor.
Experts have expressed the possibility of CBDCs overtaking digital currencies. The traditional economy operates on the trust of the traders. The centralization means there is always someone responsible. It can thus solve the cryptocurrency volatility and security issues.
The CBDCs are also a result of the growing distributed ledger technology. It means they will provide the very best in transactions.
Countries like the Bahamas have already released their national digital currency. Several other countries are in the advanced stages of releasing theirs. China looks to become a world superpower through digital yuan. Within a few years, all coins will be digital.
Bottom Line
The history of cryptos is ever-evolving. This brief history of cryptos shows how much it has changed over the years. It's also a sign to expect more in the future.
Crypto Scams and Theft (2014 – 2015)
Bitcoin had become a hit among the users due to its anonymity. The decentralization meant it had no central controlling authority. These are the same features that made it attractive to criminals.
Mt. Gox, the largest crypto exchange, went offline in January 2014. The prominent exchange by then was running more than 70% of the crypto trades. It applied for bankruptcy within the year, citing hacking. Traders lost more than 850,000 BTC in the process. The investigations following the fall of the exchange never amounted to anything. The money lost by today's standards would be 15,300,000,000 USD.
Several other cases of scams and Ponzi schemes were prevalent at this point. Most people joined the schemes with making quick money in mind.
The Emergence of Ethereum and ICOs (2016 – 2017)
In the history of cryptos, only Ethereum gives Bitcoin a run. The crypto's token Ether is the second most traded in the crypto exchanges. It is also the second most valuable.
The rise of the coin was due to its supporting role. Bitcoin might have been valuable but only as a medium of exchange. Ethereum otherwise provided for a platform for developing other crypto projects.
It made it possible for developers to create decentralized applications. It would also support other financial crypto projects.
The platform was breaking the monopoly of the play stores. It was also liberalizing the other traditional financial services and institutions.
Ethereum also introduced the age of Initial Coin Offering (ICO). Before, fintech projects relied on private investors. The process would favor established companies offering shares through Initial Public Offering (IPO). It was hectic as it involved documentation with regulators and auditors. ICOs allowed upcoming projects to gain funding beforehand. It is easy to create and is not limiting on prospective investors.
Crypto Boom and Fall (2017 – 2018)
The market became crypto-friendly, and several virtual currencies were gaining value. Bitcoin was still leading as it rose to hit the highs of $20,000. All the other markets had a good run during the crypto boom until May of 2018.
The market then started correcting as the prices fell again.
The Launch of Central Bank Digital Currencies (2020 – Onwards)
The cryptos are in the latest growth trajectory. The governments have realized they cannot fight the crypto growth. For that, they are looking to join the blowing sector. It seeks to gain a foothold through the central bank digital currencies (CBDCs).
The CBDCs remains the sure way for the governments to keep their influence. It is more like traditional currencies online. The central bank would still manage the supply of the coins. The commercial banks remain the distributors and money retailor.
Experts have expressed the possibility of CBDCs overtaking digital currencies. The traditional economy operates on the trust of the traders. The centralization means there is always someone responsible. It can thus solve the cryptocurrency volatility and security issues.
The CBDCs are also a result of the growing distributed ledger technology. It means they will provide the very best in transactions.
Countries like the Bahamas have already released their national digital currency. Several other countries are in the advanced stages of releasing theirs. China looks to become a world superpower through digital yuan. Within a few years, all coins will be digital.
Bottom Line
The history of cryptos is ever-evolving. This brief history of cryptos shows how much it has changed over the years. It's also a sign to expect more in the future.
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