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ALRAQABA . ISSUE 15
no tangible physical presence, they share the
same features as traditional fiat currencies. The
most famous of all cryptocurrencies is Bitcoin.
History of crypto/ digital currencies:
Digital currencies had first emerged in 1977,
immediately after the famous RSA algorithm
was born, enabling investors to receive funds in
digital form. Afterward, eCash, an early form of
cryptographic electronic money, was created.
In 1996, Electronic Gold, or the so-called
E-Gold, was launched. It was a private
international currency that would circulate
independent of government controls. In order
to start trading gold, traders had to first open
an account on the E-Gold website. Due to
suspicious transactions relevant to money
laundering, the E-Gold system was later shut
down.
Further attempts also continued in this domain.
A computer scientist had distributed via his
email a work plan for the electronic currency
“B-Money”. This step contributed to laying the
groundwork for cryptocurrencies. Later in 1999,
the PayPal website was established through
which users can transfer money online, paving
the way for the emergence of digital currencies.
In 2003, “Tor” software was created with a view
to protecting the personal privacy of its users.
This creation had indirectly supported digital
currencies in terms of encrypting transactions
and ensuring the anonymity of money transfers.
The first digital currency then appeared in
2008, which is Bitcoin. This currency was
conceived by an unknown person or group of
people using the name Satoshi Nakamoto. The
creator of Bitcoin had released a document, i.e.,
Bitcoin WhitePaper, outlining the functions and
objectives of this type of currency. The paper
also clarified how to transfer funds without the
need for financial institutions, highlighting that
transactions of cryptocurrencies shall be free
from the control of international governments.
Evolution of crypto/ digital currencies:
Following the release of Bitcoin, the blockchain
technology was found to serve as the public
transaction ledger of the digital currency
Bitcoin. Blockchains allow for a secure
exchange of valuable assets, e.g., money,
shares, or data access rights, without the need
for an intermediary or a central registration
system to monitor the transactions.
In 2009, the first 50 Bitcoins were created, and
the first transaction ever sent on the Bitcoin
blockchain was between the creator Satoshi
Nakamoto and Hal Finney. The price of Bitcoin
has then jumped to reach a value of USD 1.00
in 2011. It is noteworthy that Bitcoin continues to
rise in value until this date.
Afterward, the field of cryptocurrencies has
expanded dramatically, and new competitors
to Bitcoin have emerged. Each of those
new currencies has its specific blockchain
technology, which was customized and
modified to its needs. Nowadays, there are
more than 1590 available digital currencies.
In addition, there are dozens of trading
platforms allowing for the purchase and sale of
cryptocurrencies. Other platforms, which are
widely used, also provide currency exchange
services, where users can convert dollars
or other fiat currencies to cryptocurrencies.
In October 2013, the world›s first Bitcoin
ATM opened in Vancouver, allowing users to
exchange their credits of Bitcoin for cash.
Nature of digital currencies:
Unlike traditional or fiat currencies, digital
currencies are not regulated by any centralized
authority. However, they can be used for online
purchases, just like any other currency, and
may be converted to a fiat currency. Digital
currencies are decentralized, making it easier
Research
