Defi the hottest ticket in the history of bitcoin, cryptocurrency assets
The story of bitcoin has been intriguing so far, just like it spent the entirety of 2018 retracing from its peak value of over $19,000 in December 2017, which could be due to massive adoption, perhaps a significant breakthrough in the history of digital currency.
For quite some decades, there have been trials towards developing a digital currency to solve the various irregularities in Global Finance. In August 2008, Bitcon.org was created. The whitepaper published: “Bitcoin: A Peer-to-Peer Electronic Cash System” just two months after the registration. The whitepaper intended to eliminate the need for a third party or financial institutions in transactions. Hence, solving the issue of double-spending. Also, hashing the transactions to form a chain in order and securing digital signatures, thereby forming a record that might never be changed, hence acting as a permanent receipt. Satoshi Nakamoto who remains an unknown person or group of people, is the inventor.
The complexity in updating bitcoin: Major forks in the history of bitcoin
Few days later in the year 2009, the first-ever block of bitcoin was mined, known as Genesis Block. By January 9, the first reduplication of bitcoin software was released. On 12 of the same month, Nakamoto sent out ten bitcoins to Hal Finney, a noted programmer; this was the first bitcoin transaction.
Years after the Genesis Block, there have been several hard forks. During a hard fork, software implementing bitcoin and its mining process is upgraded. Bitcoin XT was one of the first eminent hard forks of bitcoin, launched by Mike Hearn in 2014. While the previous version of bitcoin used a block size of 1 megabyte allowing up to seven transactions per second, Bitcoin XT increased the block size to 8 megabytes, aiming for 24 transactions per second. Bitcoin XT saw success. However, a few months later, the project lost users’ interest as the community still wanted block sizes to increase. In response to that, a group of developers launched Bitcoin classic, which increased the block size to only 2 megabytes, with about 2000 nodes, which also had the glory of its time. Nonetheless, the broader cryptocurrency community wants more options.
Bitcoin unlimited took over, allowing miners to decide on the size of their blocks. Despite the little interest, Bitcoin unlimited failed to gain massive acceptance. Shortly after, Peter wuille presented the idea of Segregated Witness known as Segwit in the year 2015, which aims to reduce the size of each transaction, hence allowing more transactions to take place at once. Though Segwit was technically a soft fork, it may have helped to feed out hard forks. In response to Segwit, some bitcoin developers decided to start a hard fork to avoid the protocol updates. Bitcoin cash proved to be the result of this hard fork. In August 2017, it split from the main blockchain, resulting from the bitcoin cash wallets rejecting bitcoin transactions and blocks.
Nevertheless, Bitcoin cash remains the most successful hard fork of the primary cryptocurrency.
A new era of digital currency adoption, the wax, and wane
Just as it may seem, the adoption of an intangible asset wasn’t a smooth one. Beginning with New liberty standard publishing, the first bitcoin exchange rating $1 to be worth 1,309.03 BTC. In May 2010. The first purchase happened between a Florida-based programmer Laszlo Hanyecz who sent 10,000 BTC to a London man in return for two pizzas valued at $25. Indeed, 2010 was a crucial year for the exchange of bitcoin. The first bitcoin exchange came up in February 2010, known as the Bitcoin market, and Mt.Gox in July. In the same year, 2010, the first bitcoin was mined with Slush: the first mining pool. ( Mining pools are where many miners combine resources to get bitcoin).
By November 2010, the market capitalization exceeded $1 million for the first time. Steadily increasing in value after passing the 1 cent threshold in February 2011, 1 bitcoin was worth $1 for the very first time. Shortly afterward, bitcoin started receiving press. Both good and evil were all involved. TIMES magazine made the first Bitcoin publishing.
In June 2011, Mt.Gox suffered a severe security breach. Unfortunately, in 2015 Mt.Gox went bankrupt and shut down amidst high bitcoin volatility.
Cryptocurrency journey to mass adoption.
As more and more of the public and entities grew a massive interest in the cryptocurrency, which prompted a rise in altcoins(other forms of cryptocurrency) whose developers are either trying to improve Bitcoin or had a different use case or purpose behind the digital coin. One such breakthrough was the coin Ethereum, which brought more changes, not just the exchange of value but also the value exchange programmability. If bitcoin attracted people looking for a new money system, Ethereum was out there looking across the once disruptive, increasingly monopolistic platforms by creating so-called “Smart contracts’’ where applications can run as programmed without any possibility of downtime, suppression, or third-party interference.
Following the trend, the ICO era (Initial coin offering) is equivalent to Initial Public Offering. Interested investors can easily buy into the offering and get a new cryptocurrency token issued by the company. However, as the IPOs deal purely with investors, ICOs may deal with supporters sensitive to invest in a new project just like a crowdfunding event. However, the story of the ICO era cannot be concluded without involving the DAO era.
DAO: A Decentralized Autonomous Organization whose goal is to codify an organization’s rules and decision-making apparatus, which creates a structure without the need for documents and people in governing. The DAO operates whenever the fundraising or ICO of a token is over, creating people’s opportunity to make proposals on spending the money. Members who have purchased in can vote to approve these proposals.
The very first DAO, being bitcoin itself, was governed by consensus among its core team and its mining network. Every other DAO’s have been on the ethereum platform. Not long enough, the DAO of ether collected from the sale of its token was drained by an attacker; this led to the soft fork proposal and eventually the hard fork. It was thereby ending the DAO.
The Crypto Evolution: From Bitcoin to Defi
As cryptocurrencies’ journey has been a very progressive one, most interestingly, these crypto assets can now be put in ways not possible with fiat or real world assets. This shift in financial infrastructure presented a good number of advantages concerning risk, trust, and opportunity. Defi brought this breakthrough.
What Is Decentralized Finance (Defi)? Decentralized finance called defi, in short, involves the re-position from the traditional, centralized financial system of Bitcoin to peer finance, which works with the aid of decentralized technologies built on the Ethereum blockchain. Its uses range from Lending and borrowing platforms to stable coins and even Tokenized BTC; this Defi system replaces all intermediaries with program codes, increasing financial services’ efficiency, and minimizing costs.
The benefits of Decentralized finance can’t be overemphasized as it leverages the fundamental principles of financial security. Also, compelling use cases such as Managing of Assets, Gaming, DAO, Data, savings, staking and analytics, and so much more. Indeed Defi is a breakthrough and has drawn so much hype and attention in the industry.