The concept of a digital currency secured by cryptography has existed since at least as early as 1983 when American cryptographer David Chaum introduced ecash. However, the first cryptocurrency to truly achieve mainstream recognition was Bitcoin (BTC), which launched in January 2009.
Bitcoin’s main innovation was the use of blockchain — a distributed, cryptographically secured ledger of all BTC transactions that have ever taken place. The use of the blockchain allows the Bitcoin network — which consists of numerous independent nodes all of which choose to participate on a voluntary basis — to effectively function without requiring a central authority, like a bank, to enforce the rules.
Bitcoin’s blockchain is maintained and updated through the use of the proof-of-work — a computationally intensive consensus algorithm based on cryptographic hash functions, which ensures that no new Bitcoin can be created without spending considerable effort and that all BTC transactions are faithfully and permanently recorded.
Bitcoin’s appearance inspired further growth of the cryptocurrency industry, which by 2020 consists of tens of thousands of cryptocurrencies of various types, collectively worth hundreds of billions of dollars.
Some of those are, similarly to Bitcoin, fully decentralized proof-of-work coins, such as Bitcoin Cash (BCH), Litecoin (LTC) or Monero (XMR). Others use different consensus algorithms, such as Tron (TRX), Tezos (XTZ) or Dash (DASH), which all use proof-of-stake. Others still are based on private blockchains that are operated by companies for internal use and are inaccessible to the general public. But all of them have at least one thing in common: the operation of their networks is secured by cryptographic algorithms.
Related Articles
Crypto Debit Card
A crypto debit card is a type of debit card that allows its holder to pay for goods and services using cryptocurrencies like Bitcoin (BTC), Litecoin (LTC) and Ethereum (ETH). Most crypto debit cards in use today are powered by Visa and MasterCard, ...
Crypto Invoicing
Crypto invoicing allows you to create different itemized bills and invoices for the products or services you offer. It enables you to bill clients in crypto via email, without the hassle of switching between wallets and apps. As cryptocurrencies ...
Crypto Address
A crypto address is a string of characters that represents a wallet that can send and receive cryptocurrency. It is akin to a real-life address, email or website. Every address is unique and denotes the location of a wallet on the blockchain. Most ...
Cryptojacking
Some cryptocurrencies are mineable, meaning that people can choose to expend their computational resources to secure the operation of the blockchain and earn newly created coins in exchange; the coins can later be traded on crypto exchanges for ...
Cryptoasset
Cryptoassets leverage cryptography, consensus algorithms, distributed ledgers, peer-to-peer technology and/or smart contracts to function as a store of value, medium of exchange, unit of account, or decentralized application (DApp). There are four ...