After the financial crisis of 2008, the need for decentralized currency arose due to the fact that centralized control over economy led to its fall. In November 2009, Santoshi Nakamoto published a whitepaper explaining the concept of decentralized currency built on a decentralized, immutable ledger that was maintained by people.
Unlike the centralized currency, this new digital currency’s value was dependent on its demand in the market. Also, the maximum number of Bitcoin that was considered valid were decided in advance to avoid flooding the market with an oversupply of the same. This virtual currency is generated through mining, a process that involves a miner solving a cryptographic problem to validate a transaction.
Bitcoin was made available to the open source community in 2009. At that time, a guy named Kristoffer Koch bought 5000 bitcoins for $27. Bitcoin’s highest price was recorded to be $19, 783. 06 in December 2017.
It was Bitcoin’s underlying technology, Blockchain that captured entrepreneurs’ interests. People could see the potential solution that Blockchain could provide to digital trust issues that prevailed in the system. The technology records crucial data in a public ledger and doesn’t allow any party to make alterations to the system.
In Sally Davies’ words, the FT Technology reporter, “Blockchain is to Bitcoin, what the internet is to email. A big electronic system, on top of which you can build applications. Currency is just one.”