Cryptocurrency is a decentralised digital currency built on the blockchain, a revolutionary technology invented by cryptographers Scott Stornetta and Stuart Haber in 1991. It was established as a standard through which digital coins can be widely exchanged among individuals and stored in an electronic ledger existing in a computerised database. This electronic ledger technology stores data chronologically in segments known as Blocks, allowing information to be processed and transferred almost instantaneously. It uses cryptography protocols that encrypt sensitive data to secure transaction records.
On October 31 2008, a certain Satoshi Nakamoto (believed to be a pseudo-name for a group) released a whitepaper to several people on a mailing list titled, “Bitcoin: A Peer-to-Peer Electronic Cash System.” This proposed system would implement a blockchain system and solve the double-spend problem using the Proof of Work (PoW) consensus mechanism to show the amount of computational work expended. Bitcoin was the first successful implementation of cryptocurrency in 2009, and on May 22 2010, the first real-world transaction was made involving the exchange of two pizzas for 10,000 BTC. Sometime in early 2011, Satoshi Nakamoto disappeared, and no one knows who they were till today.
Over the years, Cryptocurrencies have increased in popularity, primarily due to the fact that they are decentralised and are not controlled by any government. The core significance of this is that these currencies cannot in a way be conferred value by government, are devoid of inflation and are acceptable across countries and continents. Its decentralised nature helps reduce the risk of theft from hacking the exchange. It allows users to remain anonymous and permits direct peer-to-peer transactions to take place online securely and without the need for an intermediary.
Though Bitcoin is regarded by most as the king of cryptocurrencies due to its being the first established crypto, several attempts were made before then to create online currencies with ledgers secured by encryption. Between 1998 and 2009, two such currencies (B-Money and Bit Gold) were proposed, but they never fully materialised.
Since the inception of cryptocurrency and the eventual introduction of Bitcoin, many other cryptocurrencies have entered the market. Altcoins, as they are collectively called, are more accessible alternatives to Bitcoin, borne out of the need to mitigate the deficiencies associated with Bitcoin. The deficiencies are its usability and transactional ease. A few of these are Ethereum, Litecoin, Ripple and Dogecoin (A joke currency that currently has 100 million mined coins). There are now over 1,500 cryptocurrencies online.
Some important cryptocurrency statistics
Below are some of the captivating cryptocurrency stats that are shaping the current global financial sector.
- As of February 2021, the global crypto market is capped at $1.48T, according to coinmarketcap.com
- The daily cryptomarket volume hovers around $171B
- Bitcoin alone accounts for about $6B of daily online transactions
- The global blockchain market will go up to $23.3B by 2023
- The cryptocurrency market is predicted to grow with a CAGR of 56.4%from 2019 to 2025
- Cryptocurrency users have exceeded 100 million globally, according to a report from exchange com
- Turkey has the highest adpoption rate of cryptocurrency (20%)
Bitcoin remains the most popular and valuable cryptocurrency, currently exchanging at $48,291.41(as of February 26, 2021) compared to its exchange rate of $196.02 as of October 2013; a massive 24,635% surge within this period.
Bitcoin has outperformed numerous exchange commodities such as Gold. In December 2017, 1 (one)Bitcoin was exchanged for $13,062.15, a huge increase, from the value of $921.35 at the beginning of the same year.
A recent cryptocurrency stat reveals that averagely, 28,866 posts on bitcoin surfaces online daily across all social media platforms. A rough calculation puts this at 1,203 posts hourly, about 20 posts per minute, and one post every 3 seconds.
Cryptocurrency exchanges around the world stand at over 500 currently. These Exchanges serve as brokers between buyers and sellers of cryptocurrencies. According to research, their services support both fiat-for-cryptocurrency transactions and crypto-to-crypto transactions.
Bitcoin ATMs are constantly on the rise due to the ease they avail users looking to buy, sell or exchange Bitcoin for Altcoins or other commodities. As of January 2021, there were over 14,000 ATMs all over the world. The United States has the highest concentration of Bitcoin ATMs to date in about 13,476 locations. In total, approximately 83% of global ATMs are concentrated in North America. Countries like Nigeria, New Zealand, Zimbabwe, India, and a few others have just one Bitcoin ATM each, according to cryptocurrency stats for 2021.
Crypto and Controversies
Even with the growing reception and acceptability cryptocurrencies have garnered worldwide, their emergence has not come without some controversies. Governments of some nations and top executives of some financial organisations are still struggling to recognise these digital currencies since their origin differ sharply from what they believe a legal tender should be. For example, Jamie Dimon, CEO of JP Morgan, claimed that the original cryptocurrency is a fraud and was quoted at a 2017 New York conference saying: “The currency isn’t going to work. You can’t have a business where people can invent a currency out of thin air and think that people who are buying it are really smart.”
While some countries have place outright bans on cryptos, Countries like China, Ecuador, Tunisia, Venezuela, Senegal, Sweden, Estonia, Singapore, etc., have either created their national cryptocurrency or are planning to launch one. In a country like Japan, laws have already been made to strengthen cryptocurrency adoption, and by the end of 2017 the country had more than 260,000 stores accepting bitcoin, according to bitcoin.com. Countries where cryptocurrency ban have been placed, are Russia, Vietnam, Bolivia, Columbia, Ecuador, and recently Nigeria.
Though many may not think that cryptocurrency is already widely used, they simply do not notice it in their everyday lives. From purchases on Amazon to Starbucks, payments on PayPal to Apple Pay, these virtual coins are being used, and much like contactless cards, it has the potential to quickly become another major payment method.
Written by:
Paschal Anuforo
Consultant
References:
How does a block chain prevent double-spending of Bitcoins
–By NATHAN REIFF – Understanding the Blockchain
“Satoshi Nakamoto is (probably) Nick Szabo”. LikeInAMirror. WordPress. Archived from the original on April 13 2014. Retrieved December 5 2013.
“21Shares brings first crypto-currency products on Bitcoin and Ethereum to the official market”. September 1 2020. Archived from the original on September 3 2020.
What is Bitcoin? Bitcoin Explained Simply for Dummies: