The History Of Digital Currency – Part 2

Hey guys and girls! Welcome back to the history of digital currency
mini-series, this is Part 2. Just a recap into last weeks episode, we learned
about David Chaum, a computer scientist and cryptographer who introduced the idea of digital
currency in a research paper he wrote in 1983 which I’ve added a link to it in the description
below if you’re interested. Then he went onto found DigiCash in Amsterdam. However, that filed for bankruptcy in 1998
the reason for he says was because e-commerce hadn’t been fully integrated into the internet
yet. We then went onto talking about E-Gold, which
is a digital currency backed by real gold to secure its monetary value. However, that was shut down by the United
States government (Hey Uncle Sam!) when the platform was exploited by the underworld. We then talked about Liberty Reserve which
was again shut down by the United States government for the same reason as E-Gold, having too
much illegal activity on the platform. And I pointed out that the biggest problem
for digital currencies in the rise of E-Gold and Liberty Reserve was the fact that it was
a centralised ledger which meant it could be shut down unlike the cryptocurrencies we
have today. We also touched on QQ coin from China and
PayPal. Alright, that’s enough of an introduction. My name is Jake Owens and this is Millionaire
Mindset Hub. Alright, lets get into it. So, we talked about what we discussed last
week in the introduction to this video. And now, our mini-series leads us to 9 years
ago in 2008, just as the financial world was melting down around us, something beautiful
shined. A paper describing digital currencies and
the foundations of a new currency appeared by an unknown person or group who goes by
the name of Satoshi Nakamoto. Just an FYI, if you’re interested in that
paper I’ve linked to it in the description box below. This paper described a currency that wouldn’t
have a centra ledger system. This feature would completely disable the
governments ability to shut it down just like how they did with E-Gold and Liberty Reserve. The new currency would also be able to process
transactions within 10-Minutes between accounts which was unheard of in the central ledger
system world as these same transactions would usually take days or weeks to send money around
the world. The new currency was designed so that everyone
had the same rights under the new financial system where their account couldn’t be shut
down, there would be no delay in transactions taking place and that no one could tamper
with or influence the system. This currency was made by the people for the
people. This currency also didn’t incur additional
fees as there was no need for a middle man such as VISA or banks which are both known
to 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 together
in 2008, however the currency wasn’t actually developed and didn’t come out until 2009. And after it came out in 2009, for years the
currency was only talked about and used within high level thinkers such as mathematicians
and also the underworld such as hackers and people who used Bitcoin for dark web market
transactions to buy services and products such as illegal drugs and weapons online because
it is difficult to trace those transactions. Bitcoin didn’t really take off until late
2016, 8 years after Bitcoin was conceptualised but 7 years after being built when the mass
market and investors poured in. We won’t go into the details of why the currency
exploded and people started to throw money at it in this video because it’s such a big
topic but we’re going to be going into that within a seperate video. If you’d like to check out the graph that
shows Bitcoins explosive growth since 2016 I’ve put a link to it in the description below. It’s important to mention that Bitcoin does
have some significant issues, such as privacy since transactions can be traced and another
issue is its high volatility of its value. Because of these two reasons, and because
people simply thought that they could do better, people started to create their own currencies
which are called alt-coins. In 2011, the first alt-coin which was named
Namecoin was created. It’s unique difference is that it was able
to store data within its blockchain. Some other alt coins which you might be familiar
with is Dogecoin, Monero and Ethereum. In fact, Vladimir Putin and the Russian government
endorsed Ethereum’s blockchain technology which just shows how powerful these currencies
and blockchains are becoming, not only to high level mathematicians and hackers but
to 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 you
feel that way inclined please hit that subscribe button and like the video If you’ve got any questions or just want to
reach 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 🙂

1 thought on “The History Of Digital Currency – Part 2

  1. First Like and Comment! Great video as always. Keep up the great content! Can you please do a video on mining Monero (XMR) with MinerGate

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