Before Bitcoin
Many people think that Bitcoin was the first cryptocurrency created. Indeed, it is the first successful cryptocurrency introduced. In 1983, American cryptographer David Chaum conceptualised a token currency that could be transferred between individuals securely and privately and founded DigiCash to make his concept real, creating the first cryptographic electronic money called eCash.
In 1996, Dr Doughlas Jackson and Barry Downey proposed electronic money named E-Gold that was pegged to the possession of gold that allowed for ownership transfer between users of a website.
Other early cryptocurrencies were Bit Gold and B-Money, but they were ultimately unsuccessful.
2008: The advent of Bitcoin
On October 31, 2008, a pseudonymous Satoshi Nakamoto published a whitepaper titled “Bitcoin: A Peer-to-Peer Electronic Cash System”, introducing the latter famous Bitcoin to the world. Bitcoin was described as a theoretical open-source digital resource, meaning that no one owned it and everyone could use and develop the software.
In 2009, Satoshi Nakamoto mined the first 50 Bitcoin, started the practice of crypto mining, which is now one of the most attractive activities for its valuable BTC rewards.
2010: The Pizza Transaction
On May 22, 2010, programmer Laszlo Hanyecz made history by buying two pizzas with 10,000 BTC, marking the first commercial use of cryptocurrency. This event is called the Bitcoin Pizza Day and is celebrated annually by the global crypto community to commemorate Bitcoin’s humble beginnings and its remarkable progress since then.
Hanyecz, from Jacksonville, Florida, posted his offer on the Bitcointalk forum, one of the earliest Bitcoin communities.
As an early crypto enthusiast and innovator, Hanyecz contributed to Bitcoin mining advancements, developing software to improve GPU mining efficiency.
At the time, no one could have predicted the significance of this transaction or the future value of 10,000 BTC, now worth approximately $692 million.
Looking back, Hanyecz has no regrets about the historic purchase. “Someone had to start it,” he says.
2011: New-born Altcoins
Alongside Bitcoin, numerous alternative cryptocurrencies (named altcoins) were created. Altcoins come with unique features and practical utilities more than mere digital medium of payment. These alternatives can offer faster throughput, lower fees, improved security, and recreational purposes and might draw significant attention from crypto investors, leading to what is called altcoin season.
Some prominent early altcoins are Litecoin, Namecoin, and Ripple.
- Litecoin was introduced by Charlie Lee in 2011. The network uses a different hashing technique called Scrypt to allow for faster block generation times compared to Bitcoin.
- Namecoin was the first altcoin to be created and was designed to serve as a decentralised domain name system (DNS) and a digital identity platform. Users can use Namecoin to register and transfer domain names on a blockchain with censorship-resistant and secure domain name registration services.
- Ripple was officially launched as a digital currency in 2012 and has now become the 7th largest cryptocurrency by market cap. The blockchain aims to facilitate fast and low-cost cross-border transactions through its consensus ledger technology.
2013 – 2016: Ethereum and the Altcoin Boom
Ethereum was conceived in 2013 by programmer Vitalik Buterin and four other co-founders with the goal of expanding blockchain technology’s capabilities beyond mere transactions. Buterin recognised the limitations of Bitcoin’s blockchain, which focused only on peer-to-peer transactions, and proposed a more versatile blockchain platform supporting programmable contracts and applications.
In 2014, Ethereum raised over $18 million from an ICO to develop the “Frontier”, or Ethereum 1.0, the official launch of the ETH platform in July 2015. This advent brought several integral components and concepts that formed the foundation for multiple blockchain applications later, including smart contracts and decentralised applications (Dapps).
In 2016, Ethereum suffered a severe hack in a decentralised autonomous organisation (DAO) that was supposed to serve as an investment vehicle. Around $60 million was stolen from this $150 million fund.
The Ethereum community was split over how to handle the DAO hack, creating a hard fork that led to the nowadays ETH and ETC (Ethereum Classic)
2016 – 2017: ICOs influx
This period was known as the very first Altcoin season, which saw the altcoin’s dominance rose dramatically. Many altcoins reached their all-time highs during this period, primarily due to the initial coin offerings – ICO Boom – where numerous new tokens were launched and offered to investors much as newly issued stock is offered to investors when a company goes public in an IPO.
The total cryptocurrency market cap experienced explosive growth, rising from around $30 billion in early 2017 to over $600 billion roughly a year later.
2020 – 2021: New Crypto Trends: DeFi, NFTs, and Web3
In 2021, the inception of DeFi projects, nonfungible tokens (NFTs), and memecoins has driven the boom of a new altcoin season. The Bitcoin dominance index quickly fell from 70% to 38%, while altcoins’ market share doubled from 30% to 62%.
Some of the best performers were Solana, Polygon, Dogecoin, Shiba Inu, PancakeSwap, and BNB. The total cryptocurrency market cap surged past $2 trillion for the first time, led mostly by altcoins. This period was the golden age of crypto, the largest bull run in the crypto market to date, with the total market cap soaring to an all-time high (ATH) of over $3 trillion by the end of 2021.
Both periods highlight the cyclical nature of ‘altcoin seasons.’ However, the market has witnessed significant growth in complexity, with over 10,000 altcoins in 2021 and a notable presence of stablecoins in the market cap rankings.
2024: Bitcoin Halving and Is it the Altcoin Season?
Recently on April 19, 2024, Bitcoin Halving, an event that reduces the Bitcoin rewards for mining by half, occurred when block 840,000 was mined. Now instead of 6.25, 3.125 BTC is mined every 10 minutes.
The current bullish trend in the crypto space is mostly attributed to the Bitcoin halving in April 2024 and spot Ethereum ETF approvals by the U.S. Securities and Exchange Commission (SEC) recently in May 2024. Usually, when Ethereum starts to rally, it can signal the beginning of an altcoin season. However, for the season to fully commence, other metrics must be clear. According to blockchaincenter.net, the altcoin season index now stands at 35. To indicate an altcoin season, 75% of the top 50 altcoins must outperform Bitcoin.
The future altcoin season could see rallies in remarkable sectors of the crypto market rather than ICOs, DeFi, and NFTs like previous ones. Networks and firms are focusing on Artificial Intelligence (AI), GameFi, metaverse, DePIN, and web3 landscapes.
AI has been the leading narrative within the crypto space. Notable performers such as Akash Network and Render, which have seen price surges of 1,170% and over 1,000%, respectively. In April 2024, Andreessen Horowitz raised $7.2 billion for new tech venture funds, with $1.25billion allocated to AI infrastructure.
DePIN and GameFi subjects also gain significant investors’ traction. DePIN firms Roam has recently successfully received around $11 million in its series A funding. Meanwhile, the GameFi sector made a strong comeback, with companies entering the blockchain gaming arena and projects like Immutable X and Roin witnessing significant price increases of nearly 480% and 580%. Moreover, Pantera Capital continued to invest $8 million in GameFi platform InfiniGods, becoming the game’s exclusive investor in series A funding. At the time of writing, the GameFi sector boasts a market cap of over $25 billion.
