Bitcoin has been making a name for itself since 2009. During this time there have been hundreds of cryptocurrencies, also known as ‘Altcoins‘ competing for the Bitcoin status. Was Bitcoin the first cryptocurrency on the market? According to Wikipedia, yes but according to bitcoinmagazine.com and The Merkle, no!
Here's why:
Bitcoin was not the first Cryptocurrency!
- 1983 – David Chaum, an American cryptographer invented the blinding formula, an algorithm still used in the web’s encryption today!
- Late 1980’s – an unknown computer scientist attempted to prevent late-night robberies taking place in petrol stations in The Netherlands. They created a way of transferring money on to ‘smartcards‘ which were being trialled locally at the time. Truck drivers started using these instead of cash. It was a success!
- During the same period a well-known retailer, Albert Heijn, was pushing the banks to create a way for shoppers to pay directly from their bank accounts, which eventually came to be known as POS (point-of-sale).
- 1990 – David Chaum set up a business called ‘Digicash’. Though initially successful, Chaum’s invention of the internet e-cash product was only to be sold to banks. This caused problems when trying to scale too quickly. Microsoft even offered a $180 million bail out and install digicash on every Windows computer. Chaum said that wasn’t enough and the company declared bankruptcy in 1998.
- 1992 – Hashcash is arguably one of the most influential cryptocurrencies to date. Surprisingly it was not originally designed as a cryptocurrency. Hashcash had different uses such as limiting email spam and preventing DDoS attacks. In 1997, scaling the cryptocoin side of the business was also unachievable, so the coin ceased to exist. A lot of Hashcash’s features ended up being used in the Bitcoin protocol developed by Satoshi Nakamoto.
- 1994 – The pioneer in digital money First Virtual was established as the first online payment company. The hype for First Virtual was relatively short-lived and the company have since filed for bankruptcy, renamed the business and have been acquired, twice. Things started going sour a few years down the line when a new competitor came along.
Introducing...
- 1998 – PayPal! PayPal essentially followed the same path as First Virtual, but with one significant difference; peer-to-peer transactions. Prior to this, online transactions could only occur with a merchant.
- 1998 – Nick Szabo designed a mechanism for a decentralized digital currency he called ‘Bit Gold‘. Szabo was the first to create a concept to avoid double spending of a currency and relying on central banks. He cryptographically solved solutions with publishings for the public, mimicking a modern blockchain. ‘Bit Gold‘ was never implemented, but has been widely recognised for similarities in protocols with Bitcoin.
- 1999 – e-Gold was the first business to buy your gold and credit you with e-gold virtual currency. e-Gold held good faith and allowed anyone to use their accounts. The company was successful until 2005 when several fraud scams attracted the attention of the Federal Reserve System. e-Gold’s offices in Florida were raided and e-Gold was no more.
10 years later... Was Bitcoin the first cryptocurrency?
Was Bitcoin the first Cryptocurrency?
Satoshi Nakamoto brought the world’s first decentralized digital currency using the revolutionary blockchain technology.
(What is blockchain technology?)
Blockchain technology has allowed complete transparency, security and decentralization on the internet.
As Satoshi essentially created decentralised finance with blockchain technology, you could argue that Bitcoin was the first cryptocurrency. Bitcoin has been a success, and due to the nature of the technology it can not be removed or banned by any governing body. Bitcoin is here to stay.
Are there other Cryptocurrencies beyond Bitcoin?
In 2013 Vitalik Buterin released the ‘Ethereum Project’. Ethereum is a network using blockchain technology that allows developers to build programs and decentralized applications (Dapps) in the same immutable, secure manner.
In 2015 Buterin released ETH, the the second-largest digital currency by market cap after Bitcoin.
Some of the most popular cryptocurrencies (Altcoins) on the market to date:
- XRP (Ripple)
- LINK (Chainlink)
- XTZ (Tezos)
- LTC (Litecoin)
- NEO (Neo)
- XLM (Stellar Lumens)
- TRX (Tron)
We have explained all you need to know about the Bitcoin vs Altcoin markets in a post here!
We hope we have explained both sides of the argument clearly and fairly. Was Bitcoin the first Cryptocurrency after all? Let us know your thoughts in the comments below!
Click here to read more about if Bitcoin is a safe investment…
DISCLAIMER: This is NOT financial advice. Beginners Crypto Guide does NOT OFFER formal nor informal financial advice and accepts no liability for such service. You should always do your own research before making any financial decisions.
