Hello Readers,

Most of us have been around in this amazing cryptocurrency world for quite some time, but have you been curious about where it all begins? Nowadays we see hundreds of crypto blockchains and thousands of crypto related projects in existence and more new projects are given birth to almost every day, but this wasn’t the case even a decade ago. The world of crypto is comparatively newer to us compared to other financial systems and while this young sector is only in its emerging state, it has already made an impact on millions of people to believe, interact and do investment in this realm. In this post I will try to shed to shade some light upon where it all began from, so without further ado, let us start.

Ecash - first Cryptographic currency

Not many of us know the fact that while bitcoin is the first bedrock for the crypto realm, it is not the very first cryptocurrency. The first ever digital currency was made back in 1983 by a brilliant mind named David Chaum who was a cryptographer from the States. He was an inventor who gave birth to the concept of anonymous cryptographic electronic money, which was named ecash. This innovative idea of digitalization of money eventually got upgraded over time and in 1995, the world witnessed its very first cryptographic e-payments known as Digicash. While Digicash required specially made software, encrypted keys and currency notes in order to make transactions, the revolutionary part about this newly formed financial system was that it allowed users for the very first time to execute digital transactions without leaving a trace for banks, government or anyone else.

Bitcoin - the Father of Blockchain and decentralisation

However, Digicash may be the first ever cryptographic electronic money transaction system but there was no existence of decentralization or blockchain technology until 2009 when an anonymous individual named Satoshi Nakamoto introduced bitcoin to the world. This event for the very first time ignited a spark of the beginning of the cryptocurrency revolution and from that time onwards, cryptocurrencies gained momentum across the world and started attracting more people and investments into this sector. With the introduction of Bitcoin, the decentralization system also came into existence where no single entity or institution will control the whole system and rather, a large group of people will and thereby distribute the power in a decentralized manner so no one can create a monopoly or threaten the system. On the other hand, blockchain technology was also introduced with the birth of Bitcoin where the transactional data produced will be linked to each other like a chain and in order to edit, update or delete any existing data in the chain became impossible therefore making a very secure system impossible to hack or harm.

Understanding Cryptocurrency

There are always new people entering this advanced world and when encountered for the first time, they always get curious and ask the very first question - what exactly is cryptocurrency? Well in layman's terms, it is a digital form of money that is not dependent on banks, governments or any other financial institutions to exist. Instead, it exists and operates on a decentralization manner system that records and executes transactions and also manages the creation or burning of its currency. Generally, all of this happens in a very secure environment through the power of cryptography and blockchain technology right from the beginning. In other words, A cryptocurrency is any form of currency that exists only digitally and not physically like bank notes or coins. They usually neither have any singular authority like other existing financial systems in this world nor do they have a singular issuing or regulating authority but instead, they use a decentralization system to execute and record transactions, which generally relies on blockchain technology with the help of cryptography in order to prevent hacking or fraudulent transactions.

Technology Behind Blockchain

cryptocurrency are generally built upon and using blockchain technology, a revolutionary digital system that ensures better security and transparency than any other existing technology. A Blockchain system runs like a chain of transactions, where each new transaction operation creates a new block in the chain and is attached to the previous one and that previous one is connected to the one prior to it just like a chain. The main feature of this technology is its unmatchable immutability as once information is stored in a block, it cannot be tampered with or removed and hence eliminates the possibility of false information.

The Core Principles

Like any other currency system, any cryptocurrency also has to meet certain key conditions to be considered a cryptocurrency which is beautifully explained by Jan Lansky, a well-known cryptocurrency researcher, who has defined six key conditions that a system must meet to be considered a cryptocurrency:

1. No central authority is required, the system relies on a distributed consensus mechanism to ensure transparency and security.

2. It maintains an overview of cryptocurrency units and their ownership.

3. It defines the creation of new cryptocurrency units and the circumstances surrounding their origin.

4. Ownership of cryptocurrency units can be cryptographically proven.

5. It allows transactions where ownership of cryptographic units can change.

6. If conflicting instructions for changing ownership are given, the system executes at most one of them.

I hope you liked reading my post about the existing journey of cryptocurrency and if it adds even a little information to you, I will be very happy to know that. So Please let me know your thoughts in the comment section below and I will be seeing you all in my next post!