How cryptocurrencies emerged

Image source: express.co.uk

Everyone living in the wired world today has probably heard or read about cryptocurrency. Although this digital alternative to traditional currencies wasn’t generally accepted years ago since it was invented, it eventually managed to establish enough following in order to become one of the most innovative methods of exchange or payment in the modern era.

The history of cryptocurrencies goes way back in the 1980s. Even then, people started toying with the concept of non-physical cash, a digital currency that can be an equal physical cash alternative to be used for different financial transactions.

David Chaum, an American cryptographer, invented the first form of digital cash, aptly named as DigiCash when he was in the Netherlands. The invention was an extension of the once popular encryption algorithm, the RSA.

Some technology giants were attracted to the very concept of DigiCash that even Microsoft was ready to hand in $180 million to Chaum’s company so that the cryptocurrency’s application program, eCash, will be made available on every Windows PC in the world. Unfortunately, Chaum rejected the offer and this was followed by another misfortune when the Netherland’s central bank expressed hostility towards the company.  In 1998, Chaum’s firm suffered a tragic bankruptcy.

Today, the rise of the popular cryptocurrencies like Bitcoin and the blockchain technology seems to be unstoppable ever since it was recognized publicly in 2009. The digital cash fever was followed by other digital currencies that are slowly making their name in this emerging industry so that over 850 cryptocurrencies are being traded not just in the U.S. but across the globe.

While many investment experts applaud this interesting innovation, financial analysts, on the other hand, remain skeptical.