Cryptocurrency

Bitcoin was not the first attempt at digital money—it was the first that worked. Through the 1990s and 2000s, cypherpunks had experimented with electronic cash systems: DigiCash, e-gold, b-money, bit gold. Each foundered on the same problem: how do you prevent someone from copying digital money and spending it twice without relying on a trusted central authority? Banks solved this through centralized ledgers; but centralized systems could be shut down, censored, or debased. The cypherpunk dream was money that no government or institution could control.

On January 3, 2009, an entity calling itself Satoshi Nakamoto mined the first Bitcoin block, embedding a newspaper headline about bank bailouts as a timestamp and manifesto. Bitcoin combined several existing innovations—public-key cryptography, proof-of-work mining, peer-to-peer networking—into a system where the network itself maintained the ledger. Miners competed to solve computational puzzles; the winner added the next block of transactions and received newly created bitcoins as reward. The difficulty adjusted to maintain roughly 10-minute block times. Total supply was capped at 21 million coins.

The adjacent possible had matured through decades of cryptographic research and failed attempts. Hashcash (1997) demonstrated proof-of-work. Wei Dai's b-money and Nick Szabo's bit gold had theorized similar architectures. What Satoshi contributed was a working implementation that solved the double-spend problem without trusted third parties. The 2008 financial crisis provided both motivation (distrust of banks) and narrative (an alternative to centralized finance).

Early adoption was slow. Bitcoins were essentially worthless until 2010, when someone paid 10,000 BTC for two pizzas—a transaction later valued at hundreds of millions of dollars. Silk Road demonstrated both cryptocurrency's privacy features and its controversial applications. Mt. Gox's collapse in 2014 revealed the ecosystem's immaturity. Yet adoption continued. Ethereum (2015) introduced smart contracts. Stablecoins pegged to fiat currencies emerged. Institutional investors entered. By 2021, Bitcoin's market capitalization exceeded $1 trillion.

The cascade included both innovation and speculation. Thousands of alternative cryptocurrencies launched. NFTs repurposed blockchain for digital collectibles. Decentralized finance promised banking without banks. Critics highlighted energy consumption, volatility, and illicit use. By 2025, cryptocurrency occupied an awkward middle ground: too volatile for everyday transactions, too established to ignore, integrated into traditional finance yet philosophically opposed to it. The cypherpunk vision of censorship-resistant money had partially materialized, shaped by forces its creators might not have anticipated.