Cryptocurrency first became known and gained public interest when Nakamoto (2008) introduced Bitcoin to the world in 2008. Satoshi Nakamoto's goal in creating Bitcoin was to decentralize a payment system free from central control or any third-party intermediaries.
Until early 2010, Bitcoin was still the only cryptocurrency on the market. At that time, its price was only a few cents. Several years later, new digital currencies entered the market, but their prices were also volatile, such as Bitcoin. Nakamoto (2008) attempted to create a blockchain system to protect every transaction. The blockchain system guarantees the security of cryptocurrency transactions, disrupting the conventional financial industry.
After experiencing various failures, Nakamoto (2008) finally launched a coin called Litecoin. This coin was the first financial currency to use a proof-of-work or proof-of-stake system.
Proof-of-work is a system whose primary purpose is to prevent cyberattacks, such as sending malicious emails and spam. Meanwhile, proof-of-stake is a concept in crypto assets that explains that you, as a user, can mine or validate your crypto asset transactions, based on the number of coins you hold. To illustrate, the more crypto assets a miner owns, the greater their bargaining power in mining a crypto asset. Cryptocurrency is actually a derivative of digital currency.
Cryptocurrency has a key feature: decentralized transactions, meaning that transactions are not controlled by a single entity but managed by many participants known as miners. The most well-known cryptocurrency is Bitcoin, but there are many other cryptocurrencies such as Ethereum, Dogecoin, Cardano, Monero, Tron, and others.
It turns out that cryptocurrency technology began in 1983. In that year, David Chaum, a cryptographer, created a cryptographic electronic currency called e-cash. In 1995, David Chaum11 implemented this through Digicash, an early form of cryptographic electronic payment. Digicash required user software to retrieve bank notes and designate a specific encrypted key before sending them to the recipient. This prevented the government, issuing bank, or any third party from tracking the transaction. In 1996, the US National Security Agency (NSA) published a paper titled "How to Make a Mint: The Cryptography of Anonymous Electronic Cash," which explored the cryptography of electronic cash. In the late 1990s, scientists such as Wei Dan, Hal Finney, and Nick Szabo created cryptocurrency systems, but none of their creations achieved widespread success. Nevertheless, their work, along with that of David Chaum, became the cornerstones of this currency system.
