A history of cryptocurrency, from gaming token up to a $ 2 trillion market

Facebook's decision last month to rename yourself to Meta is actually pretty retro. The metaverse may look like a state -of -the -art concept in which humans create digital versions of themselves to interact with other avatars in a virtual world, but this is an almost 20 -year -old idea that has only been easily updated.

The origins of digital assets - such as Bitcoin and Ether, not fungible tokens, Smart Contracts and the thousands of "shitcoins" out there - can be attributed to video games in which avatars have played and sometimes worked to live out imaginative life that they imagine human creative.

It may seem unlikely that their ancestors are World of Warcraft and second life , the once popular virtual reality games today. In the early 2000s, the former children's actor Brock Pierce, a US presidential candidate in 2020, recognized that players like to buy tokens to reach the next level instead of doing tasks to earn them.

"Just because something is not tangible, it does not mean that it is worthless," says Pierce, telling how he employed hundreds of people in China and South Korea to play video games and earn the game marks, which he then sold to lazybones in the West.

Together with William Quigley, today CEO of Worldwide Asset Exchange, the greatest non-funnibular token (NFT) platform, created a marketplace for in-game token worth $ 200 billion. They laid the foundation for the cryptocurrency industry.

"According to World of Warcraft gold, the intellectual jump that was necessary to recognize the value of Bitcoin was very low," adds Pierce.

pierce was an early user of Bitcoin after an unknown author published a paper in October 2008 under the pseudonym Satoshi Nakamoto in which suggestions for a new technology called Blockchain were outlined based on the consent of the user instead of working as a centralized unit. It would be the basis for a digital currency called Bitcoin, which can be "gemined" by using computers to solve puzzles. Bitcoin's offer is limited to 21 million units.

NAKAMOTO then ducked the first Bitcoin in January 2009 and marked the date of the blockchain network and the digital coin went live. In May 2010, a man in Florida paid 10,000 Bitcoin (this corresponds to more than $ 600 million at today's prices) for two pizzas, the first purchase with the digital coins.

to say that this caused a sensation would be exaggerated. The interest rates had collapsed in the course of the global financial crisis and the central banks had put on massive bond attributes to support their economies. But against this shaky macroeconomic background, interest in Bitcoin began.

First came libertarians and computer freaks, followed by foreign exchange dealers and the broader financial trade community, some of which were fascinated by the fact that the technology made it impossible to change or delete past transactions. Others, like the billionaire Michael Novogratz, were attracted to Bitcoin's 21 million unit limit because of his scarcity.

Until 2011 Bitcoin had become so popular that trading platforms gained traction. These early stock exchanges-for example Mt.Gox-were based in Asia and was aimed at small investors in the region who had developed appetite for the asset due to their gaming background. They allowed Early Adopters to mine their own coins and act with them.

The introduction of trading platforms triggered the first bladder in the Bitcoin price when the exchange rate rose to $ 32 before collapsing about $ 2 in 2011. The short -lived price increase brought Bitcoin to the map, said Max Boons, the founder of B2C2. One of the largest trading companies for crypto today. He realizes that the coin has gone through a number of blisters, with each tip higher than the previous one.

"The big names we know as 'whales' [Owners of Large Holdings] Today, shortly before the bladder from 2013, Bitcoin got on," says Bonen. He notes that Greece's debt crisis and the subsequent rescue operation prompted many wealthy investors to buy digital coins as the last means. "It was the first time that Bitcoin was influenced by macroeconomic events, so it was quite important."

But the world still showed little interest and largely ignored the introduction of Tether, the first stable coin that was created to combine the world of digital currencies and Fiat money. It was also the time of the very first initial coin offer, from Mastercoin.

The first submission of a stock market-traded Bitcoin fund-from the Winklevoss brothers-remained almost unnoticed in the mainstream finance system in 2013, despite its key role today on the cryptoma markets.

The ability of Ethereum to carry data in its code was an important innovation and forms the basis for decentralized financial markets in which algorithm transactions as well as handling and other functions perform. This market has a value of $ 236 billion and is the leading financial market for many.

The Bitcoin profile then rose in 2017 when small investors suddenly showed interest around the world when the price rose over 20,000. Initial coin also offers offers popular. The following year marked the largest crash to date and heralded the so-called crypto winter, in which Bitcoin was written off by many as a gimmick without a future.

An influx of hedge funds and family offices in Bitcoin made it a digital equivalent of gold

for some

The crypto mood became more positive in March last year when the pandemic met and caused an influx of hedge funds and family offices in Bitcoin, which were attracted to its limited offer. This shifted the story of Bitcoin as an unsuccessful currency to a digital equivalent of gold for some. Billionaires hedge fund managers then reinforced the rally of the Bitcoin price and attracted other institutional investors as well as banks and the Tesla electric carcoon Elon Musk.

In the past 18 months, cryptocurrency markets have gained popularity and have thrived new assets such as NFTs. The hype has produced thousands of alternative coins such as Dogecoin, some of which have questionable promises. On the other hand, blockchains such as Cardano, Solana and Polkadot were also created with the aim of making technology more efficient.

Bitcoin has a bumpy journey behind and remains exceptionally volatile. But the general direction is directed upwards: Bitcoin achieved a maximum of just under $ 67,000 in October this year of around $ 0.08 in 2010. Not bad for a 13-year-old.