Crypto currencies have come up as an alternative investment, though it not yet been legalised. But the crazy rise in the prices has made it lucrative. Investors are getting drawn towards it, on crazy return it has given to the investors since its inception.
Bitcoin was not the first crypto currency which came into existence, B-money which was created by Wei-Dai, for an anonymous, distributed electronic cash system in the year 1998. When Satoshi Nakamoto created Bitcoin, he provided reference of the B-Coin, in the year 2009.
If we try to find out about creator of Bitcoin, there is no formal history about him/her or the group. This name is referred to as a formal name used by mysterious individual or group of people who created bitcoin. He is actually the one who sorted out the implementation of blocked chain database. Satoshi Nakamoto was the one who sorted the entire problem like double-spending, block chain database, which were being faced and thought to be unrealistic during the creation of B-Money.
Before coming to the market, Nakamoto published a paper in October 2008, on cryptography mailing list at metzdowd.com which has all the description about the bitcoin digital currency .He defined Bitcoin as “A Peer-to-Peer Electronic Cash System”. Post this mail, in January 2009, first bitcoin software was launched and the first unit of bitcoin.
By 2010, the mysterious individual created a website with the name of bitcoin.org and he continued to add developers, by mid 2010, he handed over the control to the Gavin Andresen and transferred several domain to prominent member of the bitcoin community.
In 2010, some unknown individual decide to pay for his two Pizzas using 10,000 bit coins, in today’s date it is approximately valued at $100 million. Now bitcoins are traded on huge volumes. It started from the level of 4.83 dollar per bitcoin and it reached life time high of $19,891 per bitcoin. And currently it is trading at a level of 10626.Even at this level it is giving a return of whopping 219900% return in last six year i.e, from year 2012.
Though crypto currencies have given high returns, but it has many flaws like weak regulation and security flaws at crypto currency exchanges, valuation is difficult, as this digital currencies have no cash flow, no asset no earnings.
However, technology used in crypto currency is highly complex and technical which is used for peer to peer transaction without any intermediary. This technology of block chain will aid in eliminating inefficiencies and risk associated with human process. With these two major advantages, crypto currency though will not be able to take place of gold or hard cash, but definitely will be an alternative currency and investing option to be available with investors in coming period.