Cryptocurrency burst into the American lexicon in the late 2000s as an alternative to central bank-regulated fiat currencies. More than a decade later, the nascent digital currency is coming into its own as a mainstream asset watched and traded by investors around the world.
Americans’ online research into Bitcoin—the earliest cryptocurrency—apparently peaked in late 2017, according to Google Trends search data. Interest spiked again at the start of 2021 as young retail investors hyped up video game retailer GameStop’s stock and plowed their government stimulus checks into the markets. It was against this backdrop last year that public attention was drawn to other alternative assets like crypto and the emerging world of non-fungible tokens (NFTs).
But despite the recent speculative boomlet, crypto has existed since 2009, when Bitcoin first burst onto the post-2008 crash scene. The identity or identities of its creator–or perhaps creators–who introduced the first digital currency under the pseudonym Satoshi Nakamoto is one of the greatest mysteries of the Internet age.
Unlike the greenback or other paper money, crypto is an entirely virtual currency. It doesn’t exist in any tangible form except as numbers on a computer or server somewhere. Each denomination of a cryptocurrency—or each “coin”—is stored on a permanent ledger called the blockchain. The blockchain is a novel form of database that creates a secure and, in the case of Bitcoin, a publicly transparent digital record of transactions; however, there are other forms of cryptocurrency that promise more privacy than Bitcoin, such as Monero (XMR).
NFTs also utilize blockchain technology to create a truly unique identifier for a digital product like an image or a video that can be traded and owned. This has opened up new online revenue streams for digitally authenticated sports collectibles and athlete-endorsed memorabilia.
For better or worse, blockchain technology has introduced a level of scarcity to the internet. In the past, the internet was heralded as a frontier where everything was free and duplicatable. Now, blockchain tech allows for ownership of digital things by saying essentially: “There is only one authentic version of this thing, and it is the version attached to the unique identifier I purchased.” The introduction of scarcity via NFT blockchains has been a game-changer for modern artists—especially digital animators. NFTs exploded in popularity in 2021, seeing $30 billion in total investment over the year, according to a May report by blockchain research firm Chainalysis.
Somewhat similar to an asset like gold, Bitcoin has grown to become a preferred store of value for many investors today. There are estimated to be thousands of other cryptocurrencies utilizing blockchain tech, but Bitcoin has remained the most prevalent and valued.
Bitcoin itself has had a volatile history over the last decade, jumping from $1 per coin in 2011 to more than $1,200 USD around 2013 before falling back below $100 in 2014. Today, a single bitcoin trades for over $20,000.
The crypto market is currently experiencing a downturn; or, as crypto champion and billionaire Dallas Mavericks owner Mark Cuban has recently suggested, cryptocurrencies have flown too close to the Sun, propelled by the “easy money” and low-interest rates of the last two years—and now the market is finding a more reasonable price point.
Most importantly, crypto may draw closer to its original purpose as set out in the Bitcoin white paper published anonymously on October 31, 2008—serving as a trustless and privacy-enhancing medium of exchange rather than a speculative instrument. Trustlessness essentially means that, unlike with a regular bank wire or deposited check, no third party is supposed to be able to put a hold on the funds wired between the two parties.
To better understand how we arrived here, PennyWorks compiled this list of 10 statistics about digital assets using research from across the internet, including CoinMarketCap, CoinGecko, and PitchBook.
