Cryptocurrency has had an interesting journey over the last few decades. We are going to explore the history of cryptocurrency and the history of cryptocurrency adoption. Starting from the beginning…
The History of Cryptocurrency
The ‘Almost’ First Cryptocurrencies
We all know that Bitcoin was the first established, decentralized cryptocurrency to be created. However, there were many that came before it, including eCash, created by David Chaum’s business - DigiCash, in 1990. Chaum is a well-known cryptographer from America, and it was with him that the known origins of cryptocurrency can be found.
Unfortunately, Chaum’s company went bankrupt in 1998 so eCash never continued on. The industry changing thing that happened because of Chaum and DigiCash is that they started the foundations of the technology of this electronic currency, and its encryption capabilities and clever formulas.
David Chaum opened the door to the to a breadth of innovative individuals and companies to look into this technology in order to make their own cryptocurrencies.
Various other cryptocurrencies were created before Bitcoin as well as eCash, but, most of them never became fully fledged, established cryptocurrencies. Some of the other potential cryptocurrencies before Bitcoin include - Bit Gold, Hashcash, E-Gold, B-Money and more.
None of these became established like Bitcoin though. Hashcash and E-Gold came close, they both attracted a good level of interest and attention, but ultimately neither gained enough traction to fully take off the way Bitcoin did.
The First Cryptocurrency
What was the first cryptocurrency to be created?
Bitcoin was the first cryptocurrency that was successfully launched to become an established digital currency in 2008. In 2008 the whitepapers for Bitcoin were released under the name Satoshi Nakamoto which is an anonymous identity for the creator or creators of Bitcoin.
In 2009 Bitcoin became publicly available to mine and the software was released for public use. So began the mining of Bitcoin! With a market cap of 21 million, there was plenty available to be mined by companies or individuals.
A market cap cannot be changed once set by the creator as well, not even by the creator themselves. This is where the main difference between cryptocurrency and gold comes in because Bitcoin has a set limit and once it is all mined there will never be anymore whereas more gold comes into the economy when new ore pockets are discovered and added to the market. To date roughly 18 of the 21 million Bitcoin in existence has been mined.
For its first year Bitcoin was mined and traded without anyone really knowing what these coins were worth. In 2010, the first recorded transaction occurred when an individual spent 10,000 Bitcoin on two pizzas. Nowadays that 10,000 Bitcoin could have made the individual a millionaire! With a value of over $200million!
Over the following years the value of Bitcoin fluctuated, as it does nowadays! The cryptocurrency saw a mixture of fast gains and crashes too, overall though the increase in value has continued to grow since the coin’s inception.
Bitcoin does have a sketchy history though! It has not always had the reputation and credibility that it does nowadays. From roughly 2012 to 2016 Bitcoin, and the other cryptocurrencies of the time, were taken advantage of for their use as an anonymous payment method.
Whether it was activity on the dark web, money laundering,or even something as small as a local drug deal, unfortunately it was used for the wrong reasons for some time. Activity like this even led to Bitcoin being banned completely in countries such as China.
Bitcoins blockchain technology started to inspire other creators to invent cryptocurrencies based off of Bitcoin called Altcoins. In 2011 Namecoin and Litecoin were created, the 2013 surge in crypto interest led to the creation of Dogecoin, and a few years later in 2016 Ethereum was created.
Stablecoins were also created to control the flow of purchasing power in cryptocurrency, these are designed to stay as level as possible with the value of fiat currencies to protect people. USDT otherwise known as Tether is the most popular stablecoin in the market and it generally stays level at a value of around $1.
Thousands of cryptocurrencies have since followed. In 2017 there was roughly 1000 cryptocurrencies in circulation. Today there are over 20,000 cryptocurrencies and over 500 exchanges you can trade on! The growth is phenomenal.
The environmental footprint of Bitcoin also led to many ‘environmentally friendly cryptocurrencies’ being created including XRP which consumers the least energy of any crypto per transaction. A few other good ‘green’ cryptocurrencies are Solana, Cardano and Nano.
Whether you believe Bitcoin or cryptocurrency is a scam, or you see it becoming the future of payments, regardless of opinions, Bitcoin and cryptocurrency is here to stay and the popularity is continuing to grow.
The History of Cryptocurrency Adoption
We have talked about how the first cryptocurrency came to be, now we need to look into the many factors that have influenced cryptocurrency adoption across the world!
We all know the story of the individual who bought pizza with 10,000 Bitcoin (if only they had hindsight!), and there will have no doubt been various other recorded transactions amongst individuals and small businesses, but it has taken quite some time for large corporations to feel comfortable with the concept of cryptocurrency, let alone adopting it as a method of payment.
2014 is the year on record that saw the first large corporations adopt cryptocurrency. Microsoft, Twitch, PayPal, and Overstock are alleged to be the first major corporations to adopt Bitcoin or cryptocurrency. Unfortunately, for cryptocurrency holders, Twitch went back on this in 2019, but is still looking into reintroducing it someday. Today PayPal has greatly diversified to allow its users to have a cryptocurrency wallet.
The Covid-19 pandemic had a very unexpected impact on the cryptocurrency industry in 2020. Economies across the world fell into severe decline due to the change in trade, industry supply and demand across the world was under extreme pressure, and subsequently, government policies that came from the pandemic helped to feed the rise of cryptocurrency. In fact, in 2020 alone, the value of Bitcoin increased by over 400%!
*Pictured above, Bitcoin's all-time price chart.
The way the world works had changed dramatically, economies had to adapt, governments, businesses, and individuals all changed the way they worked, spent money, travelled, everything changed.
One of the significant changes was the increase in digital spending due to the isolation rules that countries across the world enforced by law. Individuals became better educated on the variety of ways in which you could spend your money online, as well as investment and saving options.
Bitcoin reached its all-time high of $63,558 on April 12, 2021.
The First Country to Adopt Cryptocurrency
2021 was one of the best years on record for cryptocurrency and in particular for Bitcoin with it reaching its peak in April 2021. So, what was the first country to adopt cryptocurrency?
On 9 June 2021, El Salvador became the first country to adopt Bitcoin as legal tender!
El Salvador broke ground with this decision, it caused a positive flux in the market and has inspired more countries across the world to reconsider their legislations and rulings on Bitcoin and cryptocurrencies alike.
Malta is believed to be one of the most cryptocurrency-friendly countries and has reportedly been allowing trading for the longest. It is home to many crypto-friendly banks. Its regulations have made the island one of the leading countries in cryptocurrency regulations.
Canada is the largest Bitcoin-friendly country in the west with reportedly over 1,400 Bitcoin-friendly ATMs!
If you’re in Europe then Slovenia is the place to be as a crypto investor! Individuals who make money through trading Bitcoin or other cryptocurrencies are not subject to income taxation. Additionally, cryptocurrency mining is not considered a VAT transaction in Slovenia, either which makes crypto investing and mining plausible and profitable here.
Estonia, home to the headquarters of AutoCoinCars, is another European country leading the way in its open-mindedness to cryptocurrency. The country is also a hotspot for cryptocurrency firms, investors and traders thanks to crypto being legal and having a crypto-friendly economy and banking system.
AutoCoinCars - A World Leading Off Ramp Automotive Marketplace
We have now explored the history of cryptocurrency adoption and the journey it has been on through various businesses and countries. Now let’s look at how you can spend cryptocurrency.
Millions of people across the world own cryptocurrency, but how many of you are asking - How can I spend my cryptocurrency? Or - What can I buy with cryptocurrency?
We have mentioned a few businesses that are open to accepting cryptocurrency payments, and there are many more including Starbucks, Etsy and more!
One of the difficulties and pain points of cryptocurrency is that if you are not a resident in a cryptocurrency-friendly country it can be expensive and stressful to withdraw your cryptocurrency funds and exchange to fiat and back into your local currency.
Once you factor in exchange fees, banking or legal regulations it can feel overwhelming so many people don’t spend it and just stay in the trading game, only looking at their assets on a screen. Of course, you may keep your crypto on a cold wallet in which case this is a little different, but it's still hastle to convert none the less!
However, there is an increasing number of places where you can spend those cryptocurrency profits! For more information on how to spend your cryptocurrency profits read here.
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