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Updated by Franco Bagaglia on Mar 16, 2022
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A History of Money, Cryptocurrency, and Blockchain

Blockchain is the technology that powers cryptocurrencies like Bitcoin. It’s also the technology behind other recent innovations, like digital identity systems and decentralized applications. Cryptocurrencies and blockchain are rising rapidly in popularity and are expected to become a mainstream technology over the next decade. But the technology is complex, and even the most dedicated blockchain experts still don’t understand it all.

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Blockchain and cryptocurrencies

Blockchain and cryptocurrencies

The concept behind establishing a permanent, decentralized ledger, like blockchain, was first discussed in 1991. However, the first actual blockchain implementation was designed in 2008, by Satoshi Nakamoto. It was his initial design that was used as the underpinning technology that runs the digital currency known as bitcoin.

The blockchain that was engineered by Mr. Satoshi serves as the public ledger for all bitcoin transactions. Bitcoin, if you don’t already know, is a Cryptocurrency, that is now worth roughly $38,000, that runs on blockchain technology. The most wellknown blockchain on the market today is that for Bitcoin, with the Ethereum blockchain coming in a close second.

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Digital Currency

Digital Currency

The technology that allows bitcoin to serve as a digital currency, as a store of value, and as a medium of exchange is blockchain because bitcoin transactions are recorded in a blockchain ledge.

This means blockchains are not limited to running bitcoin; rather blockchain application can span the entire gamut of trade, finance, healthcare, legal operations, records management, gaming, online exchanges, probability, and more.

Before you can get started understanding blockchain technology, you have to know how it fits in with our current currency and digital currency.

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Money

Money

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Money

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Money is nearly as old as humanity. Many books have been written on the subject. One that is worth checking out if you are interested in the matter is The Ascent of Money:

A Financial History of the World by Niall Ferguson. Money, to work, has to be both a store of value as well as a means of exchange. In the past, we’ve used many different items for money, including gold, silver, cattle, beads, and salt. No matter the form it takes, money has to execute these two essential functions. Also, there has to be trust that these roles can be fulfilled by the money.

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Cryptocurrencies

Cryptocurrencies

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Cryptocurrency

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A cryptocurrency is a form of currency that has become popular over the last several years. Cryptocurrency is created by using the encryption techniques of computing and mathematics. These techniques allow us to transfer funds and verify that the transfer did, in fact, occur. Another essential aspect of cryptocurrency is that it is independent of governments and central banks, making them decentralized.

These days, many important banks are becoming increasingly involved with the same kind of technology that underlies cryptocurrency. However, it is essential to understand that any currency that arises from their endeavors won’t be true cryptocurrency because it will be controlled by the banks. The most reliable and most dedicated advocates of cryptocurrency are
determined that it will not be centralized.

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How Did Cryptocurrencies Develop?

How Did Cryptocurrencies Develop?

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How Did Cryptocurrencies Develop?

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Bitcoin is the most well-known cryptocurrency on the market. It has been the recipient of hype, fame, and publicity. The general public has been fascinated by its extraordinary increase in value over the last several years. They have been awe-struck by the tales of significant wealth that has been generated with bitcoin, for those who acquired it in its infancy, when it was cheap.

Despite its novelty, people quickly realize that bitcoin is genuine money. In addition to bitcoin, there are many other cryptocurrencies, who like bitcoin, have had massive increases in their dollar value. Legitimate government and businesses are pursuing an increasing involvement in cryptocurrency.

Despite critics, the market for these currencies is thriving.

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Cryptocurrencies, Fiat Currencies, and Stocks

Cryptocurrencies, Fiat Currencies, and Stocks

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Cryptocurrencies, Fiat Currencies, and Stocks

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Fiat currencies are the currencies we use daily, like the dollar, yen, euro, and renminbi. Despite having the word currency in the word cryptocurrency, they are more similar to stocks and shares of the stock market than between fiat currencies and cryptocurrency.

When you purchase cryptocurrency, you get some of the coins for that cryptocurrency, which acts like a technology stock and a digital entry into a ledger, known as a blockchain.

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Blockchain

Blockchain

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Blockchains

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Blockchains are digital ledgers and can be formally defined as a continuously-growing list of records that are linked tougher and secured using advanced cryptography. In more simple terms, a blockchain is literally a chain of blocks. Each record in the list of a blockchain’s chain is called a block that contains specific types and pieces of information. Each block will usually include some sort of pointer as a link to the previous bock, transaction data, and a timestamp, which can take a variety of forms.

Another way to look at is that a blockchain is much like a database where each entry is linked to the previous and next entry.

This means that the information contained within the blockchain can’t be changed, once a block with specific data is added to the chain. Depending on the chain that you are looking at, there are often useful tools for exploring that will allow you to scan the transaction data.