Welcome to Back to Crypto — a Throwback Thursday with BTCMEX. Every week we will publish big life stories from the past of digital currencies, crypto exchanges, blockchain and Fintech. Dive in the past of innovations and breakthroughs in traditional and decentralized finance with us!
Today crypto is on everyone’s lips. Maybe we don’t ask “what is Bitcoin?” anymore, yet many are still confused about decentralized technology, blockchain and how exactly crypto won the ground in finance of today. Back to Crypto is here to cast light on the major events and fascinating facts about cryptocurrencies… yes! there are more than one.
11 years ago, on October 31, Satoshi Nakamoto’s Bitcoin whitepaper was released, started the crypto Big Bang and took us to a new decentralized universe. Every year the crypto community celebrates the birthday of Bitcoin — the first successful digital currency. We went through 11 years of Bitcoin earlier. Today BTCMEX is turning its head in a different direction. Let’s jump back to 2013 and see what Ethereum is!
Although commonly associated with Bitcoin, blockchain technology has many other applications that go beyond digital currencies. Ethereum is one of them. It is an open software platform, which provides web developers tools to build decentralized applications. You thought Ethereum is a cryptocurrency? Well, yes and no. Unlike Bitcoin, which serves as a peer-to-peer cash system, Ethereum focuses on running code for any decentralized application on its network. On the Ethereum blockchain, Ether, or ETH, is the cryptocurrency that fuels the network.
After Satoshi released Bitcoin to the world in 2008, a community of blockchain developers and researchers started to take shape around it. The media started writing about a new idea in space. One of the members of a crypto community was a Canadian teenager Vitalik Buterin, who worked as a writer at Bitcoin Magazine. He noticed a common problem among projects — they all needed to start their own blockchain. He introduced the idea of building one blockchain which everybody can use to build their projects on, as simple as making a new website.
In late 2013, Vitalik published the Ethereum whitepaper. It’s available today on github.com. The document introduced a new cryptocurrency — Ether and a new environment for Smart Contracts — the Ethereum Virtual Machine, or EVM. Ethereum blockchain can be described as a world computer, in which you pay for building your application with Ether. That simple!
Ethereum uses a similar mining algorithm as Bitcoin, but it’s slightly modified. The main difference is that Bitcoin is capped at 21 million coins forever, Ethereum has no such limit. Instead, it has an annual cap — only 18 million Ether can be created in one year.
Just like Bitcoin, Ether saw a huge volatile move in 2017, when it’s almost lost all its value in a single day in a June “flash crash”. It went from $319 to 10 cents in seconds on one exchange before covering all its loss.
The major breakthrough Ethereum made was the introduction of Smart Contracts. With Smart Contracts, it became possible to exchange not only digital assets but property, stock — really anything, without even going to a lawyer!
So far, Ether is Ethereum’s native cryptocurrency, that enables all the operations on the blockchain. It is the second most valued, stable and well-known digital currency behind Bitcoin. The majority of the exchanges offer an ETH/USD pair.
Dive in crypto life stories with Back to Crypto by BTCMEX