17th October 2018 Social Berry
The growth and emergence of cryptocurrencies was not a foreseen event by many investors in the market. In fact, the constant belief that the hype would fall off or the famous saying ‘’the crypto bubble will burst.’’ was the common idea.
In 2009 Bitcoin was made available to the public for the first time and mining began. In 2010, someone decided to sell their Bitcoins for the first time ever. He swapped 10,000 Bitcoins for 2 pizzas. To put this in perspective - if the buyer had hung onto those Bitcoins, in today’s market they would be worth around $100 million! This is an example of one person’s disbelief in cryptos but this was a widespread idea. Historically that is also the most expensive pizza!
Fast forward to 2014 and this was the year where cryptos really started to show some real booming growth. At this point, the idea of decentralized and encrypted currencies was catching on and becoming famous amongst both investors and the common folk.
However, this also appealed criminals who wanted to take advantage of the anonymity and lack of control over cryptos. In January 2014, the world’s largest Bitcoin exchange, Mt.Gox, went offline and the owners of 850,000 Bitcoins never saw them again. Investigations are still going on to find out exactly what happened, but somebody dishonestly stole other people’s Bitcoins which in today’s market would be worth upward of $4 billion!
Gradually the cryptocurrency market overturned this big hit as investors started to believe in them more and more. One of the main reasons for this is the efficiency of cryptocurrencies during transactions. The fact there is no central body governing cryptos means there is no intermediary while carrying out transactions. For example, if you are buying a TV from Amazon, using your bank card would take 3-5 working days for the transaction to be completed; whereas using Bitcoin to carry out this transaction would only take about 25 minutes.
The emergence of other cryptocurrencies is majorly linked to this factor also. Bitcoin although being fast with its transaction speed is not the fastest. Ethereum currently estimates about 2 minutes transaction completion time. Ripple clocks in even faster at an estimated time of 4 seconds.
In conclusion, the growth and emergence of cryptocurrencies is not linked solely to one factor but many different ones combining into the perfect recipe for success. Investors’ belief, an unforeseen transaction system where anonymity and speed were combined and the intermediary were removed. In fact, the emergence was so great that some of the major banks in the world such as Barclays, Citi Bank, and Deutsche Bank and PNB Paribas are investigating ways they could be working with cryptocurrencies. Goldman Sachs even announced in June 2018 that they are pioneering a Bitcoin trading desk as their first operation into the cryptocurrency market.
What do you think is the next crypto to emerge?!
By Mehrad Minaei, Client Relationship Agent at trade.Berry
**The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policies or position of trade.Berry.
This content is intended for educational purposes only, and shouldn’t be considered investment advice.
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