For many of us in the cryptocurrency space the future of cryptocurrencies seems secure with the main question being when rather than if mainstream adoption will occur. Currencies such as Bitcoin, Ethereum, and Dash have grown exponentially and are now worth amounts that were difficult to imagine at their inception. With Bitcoin recently setting a number of all-time highs, it’s time to look back at the factors that led to the emergence of cryptocurrencies.

The Birth of Bitcoin

Bitcoin emerged rather silently in 2009 when Satoshi Nakamoto published the first Bitcoin specification and proof of concept in a cryptography mailing list. Nakamoto outlined a consensus network that enabled a new form of digital money and a complete payment system. His vision outlined a decentralized peer-to-peer payment network, powered by its users and free from central authority or intermediaries. The Bitcoin protocol emerged exactly at the right time and in many ways could not have been timed any better with the world immersed in a number of economic disasters that took place in the years surrounding the birth of Bitcoin.

The World in 2009

The years leading up to the creation of Bitcoin had seen the world immersed in an economic downturn with the years of 2007/2008 becoming known as the global financial crisis. This period is now considered by many financial commentators to have been the worst financial crisis since the Great Depression of the 1930s.

The problems began in 2007 as years of irresponsible lending in the US led to a crash in the country’s subprime mortgage market. This developed into a worldwide banking crisis that saw the collapse of the heavyweight investment bank Lehman Brothers in September 2008. It became clear that banking executives engaged in excessive risk-taking and had administered irresponsible policies that affected the world at large. Despite this fact, the big banks were ‘rewarded’ with massive bailouts and further fiscal policies were employed to support the banks and to prevent a possible collapse of the world financial system. The effects of this mismanagement were felt around the world and led to the European debt crisis, and a devaluation of the euro and a global recession. It also resulted in Greece teetering on the verge of bankruptcy in 2009 and Greece would also receive massive bail out payments in order to stop the nation’s economy from collapsing.

The world was ready for financial alternatives and Bitcoin arrived on the scene as a viable alternative to the world’s more traditional financial systems.

The Continued Success of Cryptocurrency

A key factor in the success of cryptocurrencies as a whole was the ability to establish trust in a digital financial system. Bitcoin first solved this issue by allowing users to make transfers in a way that allowed a guaranteed, safe and secure transfer that everyone knows has taken place and cannot challenge its legitimacy.

Cryptocurrencies employ a ledger system and any transfer can be made by simply transferring ownership of the corresponding slot in the ledger. This secure system opened up a world of options with all kinds of digital property able to be transferred in this way. This secure and versatile system basically guaranteed the success of cryptocurrencies and allowed them to solve a host of financial issues the world has including centralized control, high fees, bureaucracy, currency devaluation and hyperinflation. Cryptocurrencies today are fast, efficient, low fee, private payment systems that allow users to take control of their financial dealings free from centralized regulations, the future of the cryptocurrency space looks bright with continued success on the horizon.