In 1983, David Chum, a researcher, laid the groundwork for the concept of digital money, which remained theoretical until 1990. In Amsterdam, Digikash founded an electronic payment company aimed at implementing Chum’s research ideas. The transition towards digital transactions gained momentum when, in 1997, Coca-Cola allowed customers to purchase products through vending machines using mobile phones. By 1998, PayPal entered the market, marking a significant stride in the evolution of digital payments. Simultaneously, several companies introduced e-mail-based payment options, setting the stage for further advancements. In 2008, Bitcoin, a decentralized digital currency, emerged, altering the landscape of financial transactions.
Bitcoin, launched in 2009, rapidly gained popularity, witnessing its value surge from $1 to over $16,000. This surge is evident in countries where Bitcoin ATMs are commonplace, and online businesses increasingly accept digital currency as a means of payment.
Building on the success of Bitcoin, Litecoin, introduced in 2011, positioned itself as the second-largest cryptocurrency. Created by MIT graduate and former Google engineer Charlie Lee, Litecoin operates on an open-source global payment network, similar to Bitcoin, utilizing blockchain for encryption and ledger purposes.
The cryptocurrency landscape continued to expand with the establishment of Ethereum in 2015. Ethereum is a decentralized platform facilitating the use of smart contracts, ensuring protection against fraud and third-party control. Its applications extend to blogging, decentralized mining operations, and trade.
The evolution of cryptocurrencies has resulted in a diverse array of options, including PayPal, Icash, Web Mane, Pioneer, Kasho, Vian, Bitcoin, Letsuan, Ripple, Dogsuan, Munero, Zakash, Utah, and Ethereum. Consumers can choose from various digital wallets stored on their mobile phones, streamlining payment processes.
While governments initially exhibited a negative attitude towards cryptocurrencies, some refusing to recognize them as a financial form, others implemented prohibitions and restrictions. Despite these challenges, the future of cryptocurrencies appears promising. It seems only a matter of time before governments acknowledge the inevitability of digital currencies and make decisions regarding their usage.
The benefits of Bitcoin, such as decentralization and anonymity, have been exploited in transactions associated with illegal activities like money laundering, drug sales, smuggling, and arms purchases. Countries allowing cryptocurrency trading have responded by issuing subpoenas to emerging electronic payment companies, emphasizing measures to prevent money laundering and ensure consumer protection.
Governments’ concerns about digital currencies are rooted in the potential for money laundering offenses. However, as time progresses, these concerns are being refuted, and the outlook for digital currencies remains positive and promising.
Predicting the future of cryptocurrencies, with over 740 species currently in existence, poses a challenge for individuals and economists alike. Nonetheless, the continued growth of cryptocurrencies, coupled with the advancements in Artificial Intelligence and the shift towards a knowledge economy, underscores their significance. The emergence of these currencies during various global financial crises, coupled with growing distrust in traditional banking systems, highlights people’s preference for a currency not controlled by any central authority. In this context, digital currencies provide a secure and uncensored avenue for transactions, offering individuals autonomy over their wealth and monetary value.
As economic risks persist, cryptocurrencies act as a buffer against the collapse of traditional currencies. Although their widespread adoption may occur gradually rather than abruptly, the popularity of these currencies is expected to continue flourishing. People’s adaptive nature, coupled with technological advancements and developer resilience, positions cryptocurrencies as a resilient and transformative force in the financial landscape.
Author : Manahel Thabet
Published December 25, 2017
Al Bayan Newspaper
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