Cryptocurrency before bitcoin

Judy Rubio

Bitcoin is undoubtedly the king of tokens. Needless to tell why it is claimed to be digital gold. However, limiting the booming industry only to one token seems ignorant. It is not the first system of digital money on which research has been conducted. It was preceded by B-money and Bit Gold. 

Even people who are in the gray about crypto market, have certainly heard of Bitcoin. We do not want to dim its light, but it is pretty obvious that the market offers a wide variety of other ambitious and useful tokens. And the crypto history began long before 2008. Let’s explore where it all started.

The first attempts to create a cryptocurrency

Wei Dai in 1998 created the concept of digital money called B-money. His goal was to find a way to reduce the influence of the state and exempt citizens from taxation. Wei Dai failed to execute his vision in real life.

The next attempt belongs to programmer Nick Sabo, who developed the Bit Gold system. His goal was to create a virtual currency based on tasks completion. It could be the solution of cryptographic equations with the subsequent sending of results to other participants of system. This concept formed the basis of bitcoin and other cryptocurrencies. Though, Sabo's project had a number of weaknesses. For example, it was not anonymous and was vulnerable to "double charge".

It wasn't until 2008 that a technology combining anonymity, independence and security was announced. That's when the mysterious Satoshi Nakamoto unveiled blockchain-decentralized networks. On the basis of this technology, the virtual currency bitcoin was created. This marked a new era of payment independence and financial security. In the article "What is blockchain" you can learn more about the technology itself.

History of cryptocurrencies

Some experts distinguish four main stages of digital coins development:

  • Stone Age. Period from 2009 to 2010. At this time, Bitcoin appears. Users start making first purchases with its help. Computer owners understand that they can earn coins directly with their equipment.
  • Bronze Age. The period from 2011 to 2013. At this time, bitcoin is actively increasing capitalization, Mt.Gox begins to work, cryptocurrency exchanges appear, traders develop various strategies for trading.
  • Time for riots. The period from 2014 to 2016. The era is known for massive hacker attacks, manipulators in the market show interest in blockchain technologies, but only secretly.
  • Gold rush. Time after 2017. The unprecedented growth of cryptocurrencies helps to attract a huge number of newcomers: miners, traders and investors to this young market.

Bitcoin with the rest of cryptocurrencies experienced the consequences of their soaring popularity. Many investors dared to call it bubble or even a scam. It actively grew, capitalization just soared, and the industry was flooded with crazy money. Bitcoin's reputation has suffered a damage caused by people who treated crypto industry like a gold mine and a way to make a quick money.

Many compare cryptocurrencies to the dot-com era. There are more and more coins; each of them has its own characteristics, strengths and weaknesses. Some coins have ceased to exist. This field no doubts has future. All we need to do is closely monitor it and look for profitable opportunities. Why not create your own investment portfolio of digital coins? You may start small and gradually master the basics to experience all benefits of cryptocurrency investments.