The Evolution of Cryptocurrency Series: The Progress

The Concept of Cryptocurrency

The idea of a cryptocurrency first started in the late 1980s, it was for a currency that could be sent untraceable and in a way that didn't require “Centralized Entities” (Or in short: Banks). In 1995, American cryptographer David Chaum implemented an anonymous cryptographic cryptocurrency called Digicash. It is a form of cryptographic electronic payment that initially requires the user's software to withdraw funds from the bank and requires specific encrypted keys before it can be sent to the recipient.

Bit Gold, often referred to as the direct predecessor of Bitcoin, was designed in 1998 by Nick Szabo. It requires participants to devote computer power to solve cryptographic puzzles, and those who succeed receive a reward. If you put the concepts of Chaum and Szabo together, you would have something similar to Bitcoin now.


But Szabo couldn't solve the puzzle of double-spending (digital data can be copied and pasted) without using a central authority. It wasn't until a decade later that someone or a group of mysterious people, using the pseudonym Satoshi Nakamoto, published a white paper called Bitcoin - A Peer-to-Peer Electronic Cash System. And so the history of Bitcoin in particular and other cryptocurrencies in general has begun.

The Evolution of Cryptocurrency

Maybe in our subconscious mind now the crypto is a huge and complicated world. But who knows that in the beginning it was so simple that it struggled to prove its worth?

Let’s look at all the stages of Crypto evolution

Stage 1: The “Stone Age” of Bitcoin (2008-2010)

On October 31, 2008, Satoshi Nakamoto published the white paper called Bitcoin – A Peer to Peer Electronic Cash System, describing the functionality of the Bitcoin blockchain network. Satoshi formally began work on the bitcoin project on August 18th, 2008, when they purchased While it is not the subject of this article, it is worth noting that Bitcoin, and all cryptocurrencies, would not be possible without blockchain technology.


The history of Bitcoin was now underway. Satoshi Nakamoto mined the first block of the Bitcoin network on January 3, 2009. Satoshi embedded the headline of the newspaper The Times on the first block in order to permanently refer to the economic preconditions that lead to the technology of Bitcoin. This first block of 50 Bitcoins is now referred to as the Genesis Block. Bitcoin had almost no value for the first few months of their existence. Six months after they started trading in April 2010, the value of one Bitcoin was less than 14 cents. In May the pizza was bought, and by early November it surged to 36 cents before settling in at around 29 cents.

Stage 2: Here comes the market (2010-2014)

While it was not worth much yet, Bitcoin was showing it had real world value. In February 2011 it rose to $1.06 before coming back down to 87 cents or so. In the spring, in part due to a Forbes story on the new “crypto currency,” the price took off. From early April to the end of May, the cost for a Bitcoin rose from 86 cents to $8.89.

On June 1, after Gawker published a story about the currency’s appeal in the online drug dealing community, the price more than tripled in a week to about $27. The market value of bitcoins in circulation was nearly $130 million. By the time September 2011 came around though, the value had dropped back down to around $4.77. In October 2011, Litecoin appeared, as had other spin-off conceptualizations of Bitcoin, often referred to as altcoins. Litecoin was second in market cap with Namecoin and 7 others trailing in the distance.


In 2012, Bitcoin prices grew steadily, and in September of that year the Bitcoin Foundation was founded to promote Bitcoin’s development and uptake. Ripple, another new cryptocurrency, is financed by venture capitalists.

In 2013, amid federal, criminal, regulatory, and software related issues, Bitcoins price constantly rose and crashed. On November 19 its price reached $755 just to crash down to $378 the same day, and by November 30 it was all the way up to $1,163 again. This was the beginning of another long-term crash that ended with Bitcoin dropping back down to $152 by January 2015.

Stage 3: The Dark Ages: Scam, scam everywhere! (2014-2016)

Though intentional, anonymity and lack of centralized control make digital currency a lucrative venture and opportunity for criminals. In January 2014, Mt.Gox, the world’s largest Bitcoin exchange at the time, collapsed and declared bankruptcy, having lost 850,000 Bitcoin. While it’s not known exactly what happened, it is likely that the Bitcoin were actually stolen slowly over time, beginning in 2011, and resold on various exchanges for cash, Mt.Gox included, until one day Mt.Gox checked their wallets and found they were empty.


While the hack was not a singular event, it has served as a cautionary tale, and security on exchanges is much improved. Though 7 major cryptocurrency exchanges were hacked in 2019, exchanges now provide more guarantees on their reserve holdings in case of hacks, such as Secure Asset Fund for Users (SAFU) on Binance, which is an emergency insurance fund. Crypto traders are advised to use a hardware or software wallet to safely store their cryptocurrency rather than storing them on an exchange. Wallets such as these were not as easily accessible during this period in the history of cryptocurrency.


Stage 4: Seeing the light when Bitcoin is hotter than Gold (2016-2018)

Bitcoin prices rose steadily year over year, going from $434 in January 2016, to $998 in January 2017. In July 2017, a software upgrade to Bitcoin was approved intending to support the Lightning Network as well as improve scalability.

A week after the upgrade was activated in August, Bitcoin was trading at around $2700, and by December 17, 2017, Bitcoin reached an astronomical all time high of just under $20,000.


During this same time, a new blockchain project called Ethereum was making noise in the cryptocurrency sphere and was the number two cryptocurrency on the market. It brought smart contracts to cryptocurrency, opening a wide array of potential use cases and generating over 200,000 different projects and counting. All of them use the Ethereum blockchain. All these projects have their own cryptocurrencies with their own purposes and goals which are often different from Bitcoin’s. There are now also other blockchains trying to compete with Ethereum, such as Cardano, or Tezos, and the cryptocurrency world continues to expand and grow in market cap.

Stage 5: Crash, then the return of the King and Queen (2018-2020)

Bitcoin and Ethereum have been unable to sustain All-time-highs after hitting prices of $20,000 and $1,400 in January 2018. Financial regulation and security institutions concerned due to exchange hacks Continuous shifts contributed to the decline. The peak was at the end of 2018, Bitcoin dropped to around $3,700. However, the decline just stops there. Since the end of 2018, Bitcoin, Ethereum along with most other cryptocurrencies have risen again. And until the end of 2020, Bitcoin took the crypto market to a brand new high.

While the volatility of cryptocurrencies is both fascinating and potentially devastating, the underlying technology behind them all – blockchain – is what has the power to change many factors of our society. Now the crypto world has more applications than ever: Whether it's providing accessible and affordable financial exchange options, securing your own funds so that no one but you can access them or providing accurate data for your insurance quotes. Without a doubt, blockchain technology can be used in almost any area of our daily lives.

In parallel with the market becoming more stable as investors have really broadened their horizons, the introduction of concepts like stablecoins and decentralized finance (DeFi) makes the financial game even more intriguing. Investors will now have more options to invest in an area they really enjoy and understand the potential of technology. At this stage, the market is changed from “Exchange Asset” to “Crypto Multichain”. The emergence of many different blockchains will promote competition, eliminate weak projects and help the crypto market to become more and more complete.

Stage 6: Rise and Shine, but still immature (2020-Now)

“To the moon”, that’s the thing we heard the most in this stage. Bitcoin exploded from the so-called all-time-high of $20.000, to nearly $70.000, followed by many altcoins with thousands percent of growth. Along with the presence of Non-fungible tokens, the market has now evolved from “Crypto Multichain” to a new form called “Crypto Metaverse” - immersive virtual worlds with immense social and financial potential. Their use of blockchain infrastructure enables them to tap into the wider crypto economy, making virtual items exchangeable for real economic value beyond the confines of the metaverse.

The DeFi sector is the one that has had massive growth, it has shown us that it can “mix” with any element possible. And the DeFi sector is now so big that it splitted into 3 “hot” sub-categories at the moment: GameFi (DeFi x NFT), SocialFi (DeFi x Web3) and PaymentFi.


2021 also is the year we witnessed the broader institutional cryptocurrency adoption. Mainstream companies across industries have taken interest - and in some cases themselves invested in - cryptocurrency and blockchain in 2021. AMC, for example, recently announced they have accepted Bitcoin and Ethereum payments. Fintech companies like PayPal and Square are also betting on crypto by allowing users to buy on their platforms. Tesla continues to go back and forth on its acceptance of Bitcoin payments, though the company holds billions in crypto assets.

The Future of Cryptocurrency

It's impossible to say exactly what will happen to the cryptocurrency market in 2022 and beyond. Questions are far more numerous than answers. However, by keeping an eye on a few overarching tendencies of crypto, you will be able to make better investing decisions as the market continues to evolve.


Three particularly important details need to be followed:

  • Regulation in the U.S. and abroad.
  • Mass-market adoption of cryptocurrency payments.
  • Exchange-traded funds based on bitcoin and other digital currencies.

As these issues develop and are resolved, the long-term future of the cryptocurrency sector will take shape. A clearer picture should be visualized by the end of 2022. Even so, a series of baby steps that started with Bitcoin's 2009 creation is likely to continue for many more years.