The most famous cryptocurrency, Bitcoin, was created in 2009. However, cryptographers have been experimenting with cryptocurrencies over the past four decades.
In 1983, an American inventor named David Chaum designated an electronic cash system called DigiCash that was based on cryptographic algorithms. In 1997, a British cryptographer named Adam Back created HashCash that used the proof-of-work scheme to prevent email spam. In 1998, b-money and bit gold was released by Wei Dai and Nick Szabo.
Bitcoin is a worldwide cryptocurrency and digital payment system called the first decentralized digital currency, since the system works without a central repository or single administrator. It was invented by an unknown programmer, or a group of programmers, under the name Satoshi Nakamoto and released as open-source software in 2009. The system is peer-to-peer, and transactions take place between users directly, without an intermediary. These transactions are verified by network nodes and recorded in a public distributed ledger called a blockchain.
Besides being created as a reward for mining, bitcoin can be exchanged for other currencies, products, and services. As of February 2015, over 100,000 merchants and vendors accepted bitcoin as payment. Bitcoin can also be held as an investment. According to research produced by Cambridge University in 2017, there are 2.9 to 5.8 million unique users using a cryptocurrency wallet, most of them using bitcoin.
