As a whole, humanity has progressed. From getting things done manually to finishing tasks in a matter of minutes with the help of modern technology, a lot of things have changed over the years. People now live in an age where almost everything can be done digitally. No matter what you are looking for, everything can be found and done with just a single click on your phone or computer.
The internet has opened a lot of opportunities for everyone and unlimited access to a lot of information. Things that used to sound impossible can now be done in a matter of minutes through the use of technology. Who would have thought that buying necessities and leisure goods can be done with just a few clicks? People used to go out for these activities, but now shopping online is more convenient. Especially with the world’s current situation, choosing to do things online seems to be more practical than going out.
Among the other advances of technologies came the emergence of online currencies, specifically cryptocurrency. The global economy is slowly evolving and transitioning towards a digital ecosystem, and soon everything will be paperless. Given the current pandemic going on, opting for cashless transactions is much more practical and safe.
A lot of people have already taken interest in cryptocurrency. Not only do they use it for online transactions, but there are also some who invest in it and do trade-ins. However, the rates of cryptocurrency frequently fluctuate. What is the current state of cryptocurrency, and is it still safe to get into the world of cryptocurrency?
A Brief History of Cryptocurrency
Before getting into details about the current situation of cryptocurrency, it is important to know where and how cryptocurrency started before deciding to invest in it. Knowing the foundation of this currency is very essential, especially with beginners, because you cannot simply dive into something without knowing how it began.
It all started back in 1998, where there were attempts to make a digital currency with encrypted ledgers. Two of these attempts were named Bit Gold, and B-Money. These currencies were formulated, but none were fully developed.
In 2008, ten years after the failed attempts, an article entitled “Bitcoin – A Peer to Peer Electronic Cash System” was posted on a mailing list on cryptography. This paper was posted by a certain Satoshi Nakamoto, whose true identity still remains anonymous up to this day. This gave birth to Bitcoin, the pioneering and most well-known cryptocurrency.
Bitcoin officially started its operations in 2009, and this was also the time when mining began. Mining, in cryptocurrency terms, is the process where Bitcoins are generated and transactions are recorded in blockchains.
In the year 2010, Bitcoin was officially valued. Since it was only being mined and never traded, it never had a monetary value until someone decided to trade 10,000 of their Bitcoins for two pizzas. If that certain trader held on to those Bitcoins, they could trade them today for a value of $100 million. Sounds insane, right?
Bitcoin remained the superior cryptocurrency until 2011, where alternative cryptocurrencies or “altcoins” started emerging in the market. These alternatives challenged the increasing popularity of Bitcoin by offering users more security and anonymity along with other advantages that Bitcoin lacked. Some of the first of these so-called altcoins were Litecoin and Namecoin.
It was not until 2013 when Bitcoin’s price crashed. After it reached a price of $1000 per coin, its prices started declining. A lot of people who invested in this suffered major losses. Experts predicted that it would take two years or more before the prices go back up to $1000.
In the following year, scams and theft started emerging in the world of cryptocurrency. Due to its immense popularity, Bitcoin became an attractive target for online hackers. Mt. Gox, the world’s largest Bitcoin trader, suddenly went offline. The 850,000 Bitcoins invested in the company were never returned to its rightful owners. Today, those coins would be equivalent to $4.4 billion.
Shortly after, Ethereum and ICOs came to steal the spotlight from Bitcoin. Ethereum uses a cryptocurrency known as “Ether”. The emergence of Ethereum made way for Initial Coin Offerings (ICO), which is a group of fundraising platforms that trade shares in startup businesses.
It was not until 2017 that Bitcoin reached the price of $10,000. As more people got interested, more money was being invested in Bitcoin and into the cryptocurrency ecosystem. It was also at this time where the market cap of crypto coins went from $11 billion up to a whopping $300 billion. Truly, it is undeniable that Bitcoin has started the cryptocurrency revolution.
Cryptocurrency in 2021
Now that a brief timeline of cryptocurrency has been discussed, it is time to talk about its current state. Is it still a good idea to get into cryptocurrency this year? Here are some of the notable events that happened recently in the world of cryptocurrency.
Bitcoin has been on a stable rise as of December 2020. It has reached an all-time high of $20,000 per coin, but it has also been fluctuating at times. To understand these fluctuations better, a good example would be the BItcoin crash of 2018. During this year, Bitcoin crashed to $13,500 after reaching $19,783.06 in December 2017, losing about three-quarters of its value. In the same year, Ethereum fell from $1,300 to $91 before reaching $450 towards the end of 2020.
Despite these frequent crashes and alterations in these platforms, Bitcoin and Ethereum have proved themselves to be highly adaptable to the sudden changes in the cryptocurrency market. Many early investors have given up on these currencies, but due to the “cryptocurrency craze”, these two currencies have still attracted a lot of new investors over the past year. This has given investors more hope in the cryptocurrency industry.
Aside from these two popular platforms, Stablecoins have also emerged in the market. These are digital coins that have flat currency, which serves as a hedging mechanism against possible crashes. Analysts believe that this would be the new trend in 2021. Stablecoins might grow in popularity this year as a result of the instability of tokens that are non-centralized. Its current pioneer, the Tether (USDT), is set to be overthrown due to the number of instabilities it has undergone while the sub-industry was being developed. This will soon be dethroned by the other types of Stablecoins that have slowly become popular.
Bitcoin and Ethereum have recovered from their previous crashes, and have reached an all-time high during 2019-2020. Due to the unpredictable fluctuations, you might ask, “when is the right time to buy cryptocurrencies?” There is no “right time” when it comes to investing since the cryptocurrency market is very unpredictable. Investing in it has its fair share of pros and cons. At the end of the day, it is still up to you if you want to get into this cryptocurrency craze.
Now, the question is, will this “all-time high” last, or will the market experience a great crash again that will greatly affect its value? There is no definite answer to this question, but one thing’s for sure, cryptocurrency has stepped the financial system’s game up, and it is here to stay.