Cryptocurrency: The Rise of Decentralized Money
Today cryptocurrencies are a global phenomenon known to most people. They hear about the volatility and unpredictability of the crypto market and see the fortunes being made or lost as something which is either exciting, frightening or confusing. They may regret they didn’t invest in Bitcoin 5 years ago, or they may try to latch on to what they think is going to be the next big thing. However, beyond all the media noise most people do not really understand most of the basic concepts.
The Birth of Cryptocurrency
Bitcoin, the first cryptocurrency came about in late 2008 as a side product of digital cash. Inventor Satoshi Nakamoto wanted to develop an alternative to failed “trusted” third party systems of payment like Digicash. The problem with these systems was that they were based on a payment network which was usually based around a central server that kept records of balances.
Satoshi wanted to create a system of digital cash without a central entity. Rather than a centralized entity to keep records of all transactions within the network, this decentralized network worked similarly to a peer-to-peer network for file sharing. Every peer in the network keeps a permanent record of all transactions, so that future transactions can be verified.
The problem with a decentralized network arises if any peer in the network disagrees on any minor balance. If they do, everything is broken. It was thought that a decentralized network would be unworkable without a central authority to achieve consensus in such a situation.
Satoshi Nakamoto’s major innovation was to solve this puzzle of how a decentralized network could operate without such a central authority. On January 9, 2009, Bitcoin was announced and the concept of cryptocurrency was born.
A Brief Cryptocurrency Timeline
2010 — In 2010 Bitcoin was valued for the first time. As it had never been traded, it was impossible to assign a monetary value to the crypto currency. In the first ever Bitcoin transaction, a programmer from Florida bought 2 pizzas for 10,000 BTC. At today’s prices these pizzas would be worth more than $100 million.
2011 — As Bitcoin’s popularity increased and alternative currencies started to appear, with Namecoin and Litecoin being amongst the first. Each newcomer attempted to improve on the original Bitcoin in various ways, such as greater speed or anonymity.
2013 — Up until 2013, Bitcoin had continued to increase in value. Virgin Galactic announced that it would accept Bitcoin for space travel and Ripple was launched. The value of Bitcoin reached $1,000 for the first time, but soon after suddenly lost value, dropping to around $300. It wouldn’t be until 2015 that it would reach $1,000 again.
2014 — The world’s largest Bitcoin exchange Mt. Gox went offline and with it 850,000 Bitcoins. Due to Bitcoin’s anonymity and lack of control, these coins were never traced and criminals got away with Bitcoins valued at the time at $450 million.
Since it began, Bitcoin has been used as a way to conduct illegal business, including selling drugs, online. In 2014, 29,000 Bitcoins were seized from the illegal drug trade and auctioned off.
2015 — Ethereum “Genesis” Blockchain was launched, which unlocked a new functionality for blockchains — smart contracts and apps. Mainstream investors and financial groups began to embrace blockchain technology. Wall Street and NASDAQ’s investment in blockchain signalled enterprise level recognition of the technology.
2016 — Initial Coin Offerings (ICOs) emerged as a fundraising mechanism for start-ups. In some ways similar to stocks and shares, ICOs offer investors the opportunity to invest in new ventures. Governments became worried about the unregulated status of ICOs. In the US, the SEC warned investors that ICOs could easily be scams or ponzi schemes. The Chinese government banned them altogether.
2017 — In 2017, the cryptocurrency market experienced the Bitcoin boom. The number of places where Bitcoin could be spent increased and more and more money flowed into the cryptocurrency ecosystem. During 2017, the market cap of all cryptocurrencies rose from £11bn to £300bn. Major banks looked into how to begin working with crypto seemingly accepting that cryptocurrency was here to stay as “legitimate currency”. December 2018 saw Bitcoin more than double in value and reach an all time high of $19,783 on December 17. By the end of 2017 there were well over 1,000 cryptocurrencies available to buy and trade.
Cryptocurrency in 2018
The start of 2018 saw a big correction in the market and cryptocurrency values dropped significantly. In January alone Bitcoin lost 40% of it’s value and many investors who had got caught up in the media hype at the end of 2017 lost a lot of money. However, the hype has since cooled down and values are now around pre-Dec 2017 prices.
The volatility and reactive nature of the market looks set to continue. At the time of writing, the value of Bitcoin has just dropped from over $10,000 to around $8,000 following the announcement by Google to ban crypto-related ads.
However, according to Jeet Singh, speaking at the World Economic Forum in Davos, such volatility is nothing to be concerned about. He argues that, due to their novelty, it is normal for cryptocurrencies to fluctuate by 70% to 80% and suggested that Bitcoin would reach $50,000 this year.
Other predictions as to the future prices of cryptocurrency are mixed, but mostly optimistic. In his book, How to be the Start Up Hero, published last month, Tim Draper discusses reasons why Bitcoin will hit $250,000 by 2022; John McAfee, founder of McAfee antivirus predicts Bitcoin will reach £1 million by 2020. On the other hand, in February, Goldman Sachs predicted that most cryptocurrencies are likely to fail with their value falling to zero.
(In fact, Goldman Sachs actually launched their own “cryptocurrency” — quotation marks my own — a few days ago. As its value is tied to the value of the dollar, purists would argue it is not a true cryptocurrency)
One thing for sure is that blockchain technology is reshaping the Fintech industry. Its unique decentralized architecture, which records transactions on an immutable public ledger, offers solutions for many industry problems. Blockchain has the potential to universally change the way industry transacts across nearly every industry in the global economy.
EIPlatform and the EMI Token Sale
EIP (Esports Interactive Platform) are developing a global platform which has the potential to revolutionize the Esports industry. The platform is based around a decentralized network which will allow all participants within the esports ecosystem to interact and conduct transactions with each other directly. All transactions will be made using the new EMI cryptocurrency.
Phase 1 of the Pre-Sale Phase of the EMI Token began a few days ago and will run until May 23. During this time, an additional 25% bonus tokens are being offered.
The base price of the EMI token is 10 EMI for $1
The goal of EIPlatform and EMI is to benefit all parties involved in the Esports industry at all levels, including: brands and advertisers; events, teams, players and content providers; fans and audiences. The EIP team have extensive knowledge and experience in the worlds of both esports and cryptocurrency, and have the skills and determination to bring the project to fruition.
We believe that the EMI token sale represents a tremendous opportunity for companies and individuals to invest in the rapidly growing world of esports.
The global esports market is predicted to grow to $905.6m in 2018 and $1.65bn by 2021. EIPlatform fully intends to be an integral part of that market and to help shape the future of esports.
You can find out more about Esports Interactive Platform, including the whitepaper and project roadmap at the official website.
Please feel free to contact us with any queries via the website chat or through our telegram channel.
