Hey guys and girls! Welcome back to the history of digital currencymini-series, this is Part 2.
Just a recap into last weeks episode, we learnedabout David Chaum, a computer scientist and cryptographer who introduced the idea of digitalcurrency in a research paper he wrote in 1983 which I've added a link to it in the descriptionbelow if you're interested.
Then he went onto found DigiCash in Amsterdam.
However, that filed for bankruptcy in 1998the reason for he says was because e-commerce hadn't been fully integrated into the internetyet.
We then went onto talking about E-Gold, whichis a digital currency backed by real gold to secure its monetary value.
However, that was shut down by the UnitedStates government (Hey Uncle Sam!) when the platform was exploited by the underworld.
We then talked about Liberty Reserve whichwas again shut down by the United States government for the same reason as E-Gold, having toomuch illegal activity on the platform.
And I pointed out that the biggest problemfor digital currencies in the rise of E-Gold and Liberty Reserve was the fact that it wasa centralised ledger which meant it could be shut down unlike the cryptocurrencies wehave today.
We also touched on QQ coin from China andPayPal.
Alright, that's enough of an introduction.
My name is Jake Owens and this is MillionaireMindset Hub.
Alright, lets get into it.
So, we talked about what we discussed lastweek in the introduction to this video.
And now, our mini-series leads us to 9 yearsago in 2008, just as the financial world was melting down around us, something beautifulshined.
A paper describing digital currencies andthe foundations of a new currency appeared by an unknown person or group who goes bythe name of Satoshi Nakamoto.
Just an FYI, if you're interested in thatpaper I've linked to it in the description box below.
This paper described a currency that wouldn'thave a centra ledger system.
This feature would completely disable thegovernments ability to shut it down just like how they did with E-Gold and Liberty Reserve.
The new currency would also be able to processtransactions within 10-Minutes between accounts which was unheard of in the central ledgersystem world as these same transactions would usually take days or weeks to send money aroundthe world.
The new currency was designed so that everyonehad the same rights under the new financial system where their account couldn't be shutdown, there would be no delay in transactions taking place and that no one could tamperwith or influence the system.
This currency was made by the people for thepeople.
This currency also didn't incur additionalfees as there was no need for a middle man such as VISA or banks which are both knownto cripple businesses in retail for their outrageous additional fees.
So, what was the currency they envisioned? Well, that currency is Bitcoin.
Bitcoin was conceptualised in and put togetherin 2008, however the currency wasn't actually developed and didn't come out until 2009.
And after it came out in 2009, for years thecurrency was only talked about and used within high level thinkers such as mathematiciansand also the underworld such as hackers and people who used Bitcoin for dark web markettransactions to buy services and products such as illegal drugs and weapons online becauseit is difficult to trace those transactions.
Bitcoin didn't really take off until late2016, 8 years after Bitcoin was conceptualised but 7 years after being built when the massmarket and investors poured in.
We won't go into the details of why the currencyexploded and people started to throw money at it in this video because it's such a bigtopic but we're going to be going into that within a seperate video.
If you'd like to check out the graph thatshows Bitcoins explosive growth since 2016 I've put a link to it in the description below.
It's important to mention that Bitcoin doeshave some significant issues, such as privacy since transactions can be traced and anotherissue is its high volatility of its value.
Because of these two reasons, and becausepeople simply thought that they could do better, people started to create their own currencieswhich are called alt-coins.
In 2011, the first alt-coin which was namedNamecoin was created.
It's unique difference is that it was ableto store data within its blockchain.
Some other alt coins which you might be familiarwith is Dogecoin, Monero and Ethereum.
In fact, Vladimir Putin and the Russian governmentendorsed Ethereum's blockchain technology which just shows how powerful these currenciesand blockchains are becoming, not only to high level mathematicians and hackers butto major world governments and the financial market.
Hey guys and girls! Thanks for watching 🙂 I hope you enjoyed the episode! If it provided you with any value, and youfeel that way inclined please hit that subscribe button and like the video If you've got any questions or just want toreach out and say "Hi!" feel free to comment below or PM me 😀 Again, thanks a ton for watching! I'll see you guys in the next episode Cheers :-).