It seems at times like cryptocurrency arrived out of nowhere as a technological marvel and financial instrument that has excited people worldwide. In actuality, it has been a process of about a decade for the digital tokens to make their mark. Yet slowly but steadily, cryptocurrency has risen to prominence and is now a force that even long-standing institutions like banks, regulatory bodies, and governments have had to recognize.

Many people know that there is something called cryptocurrency and that it has something to do with money. They also might be vaguely aware of Bitcoin, which is by far and away the most popular cryptocurrency, but it’s far from the only one. What they might not understand is why these digital coins were first created, what features about them made adopters so excited, and why they continue to evolve from those beginnings to take new shapes and forms practically every day.

To properly understand cryptocurrency, in terms of both Bitcoin and all of the altcoins that followed it into the market, it is important to understand the motivations behind the movement. If the beliefs that spawned cryptocurrency are in line with yours, you might just want to adopt it into your own life. And if nothing else, you’ll have a clearer picture of what it’s all about in case you want to invest in it somewhere down the road.

The Thoughts Behind Cryptocurrency

The cryptocurrency movement was a reaction against the fact that the finances of individuals are often taken out of their hands. This isn’t to say that people have no control over their money and the way it is spent. But it is true that you often need large, third-party companies to complete transactions with that money, hold it for safe-keeping, and basically be a kind of facilitator for any move you might want to make.

This kind of thing has frustrated many people with independent views for quite a long time. It’s that kind of frustration that makes people refuse banks and hide all their cash away somewhere only they can find it, or invest in gold that they hold onto themselves. Those ideas are extreme, however, and it is difficult to participate in society if you hold them.

At some point, a group of developers decided that they wanted to sidestep the banks, credit card companies, and every other financial institution with the ability to get their hands on the finances of everyday people. But they had to come up with a way that people could pass money from peer to peer without having to be in the same room to do it. And if not in the same room, how would these people then be able to trust that this proposed transaction would be carried out in any verifiable way?

The Bitcoin Solution

Bitcoin was first conceived in 2009 by a group of developers that was trying to come up with a solution for that trust problem. Blockchain technology proved to be the solution, and it was the key to the invention of Bitcoin, which would start the cryptocurrency revolution.

The blockchain is essentially a digital record, with every new piece of information being a so-called block on the chain.

These blocks are added by a network of computers that attempt to solve a coding problem presented to them. The first of these to solve the problem is the one that verifies the block and provides the trust factor; this so-called “miner” is also presented with digital coins as a reward for their success.

These digital coins, which the developers termed Bitcoin, became the first cryptocurrency. And the miners were the answer to the problem of verification and trust. Hence a new kind of money was born, but it would need some people to use it before it could be anything more than a theoretical exercise.

Early Adopters

Unfortunately, the first attention that Bitcoin received on a widespread basis was not very positive. For the most part, its first five years of existence took place in relative anonymity. Only certain internet communities seemed to be aware of the coins and traded them amongst each other.

One community that caught wind of Bitcoin and the fact that it allowed you to make transactions with it without anyone finding out your identity was the criminal underground. Bitcoin was used to fund a few high-profile criminal enterprises, which made for a somewhat disappointing first impression with the financial community at large.

On a gradual basis, those bad associations started to fade. People began to become aware of Bitcoin for many other reasons. And when they discovered the coins, the number of people using the coins soon multiplied at an impressive rate.

Reasons Why People Adopted Bitcoin

For the most part, Bitcoin was the only game in town in the early days of cryptocurrency. Yet it wasn’t long before it became a well-known name in both technological and financial circles. The most obvious reasons for its growth are the same reasons it captivates people today.

Speed

With a Bitcoin transaction, there is generally little wait time for it to be processed. Once it is verified on the blockchain, the coins will show up in the digital wallets of the receiver in hardly any time at all. This stands in stark contrast to, for example, a credit card transaction, which can take days, especially if it is begun on the weekend, to be completely settled.

Security

One of the most unfortunate aspects of the digital age has been the ease with which hackers and other computer experts can steal personal information. It often requires them just getting a credit or debit card number. Worse yet, if you use a credit or debit card to buy from a vendor, and that vendor is hacked, your financial and personal data could go to the hacker as a result.

People who started using Bitcoin realized that none of this was a concern. Only the amount of coins that needs to change hands is proffered in a Bitcoin transaction. The rest can be kept safely away in a digital wallet with offline storage.

No Fees

Anybody with a bank or a credit card account knows how easy it is for fees to become burdensome, fees so hidden in the fine print that you’d need a magnifying glass to see them. In addition, businesses are often hit with processing charges that make it really daunting for their operations to stay afloat.

With Bitcoin, people realized that there were no real fees attached at all. On top of that, they could use this currency without needing any third party to be around to make it happen. People looking for their financial independence couldn’t pass that up.

Universality

For those people looking to bring the far corners of the world much closer to them, cryptocurrency was just the ticket. Many parts of the globe that don’t have access to a bank do have access to an internet connection. Those people could trade coins with others from far across the globe without having to worry about obstacles like tariffs or borders.

Cryptocurrency Becomes an Investment

The more people used Bitcoin, the more valuable it became. That is because its creators limited its supply. In addition, the only way that you could get some was to mine it or to buy it from one of the exchanges that began to pop up once it became a little more popular.

Suddenly, as more people started to hear about Bitcoin, the value of the coins began to rise. And once they started rising, they didn’t seem to stop. In the span of less than a decade, Bitcoin went from being practically worthless to being one of the hottest investments on the planet, with the coins at one time reaching an incredible level of $20,000 for a single token.