{"id":2300,"date":"2019-07-08T20:00:24","date_gmt":"2019-07-08T12:00:24","guid":{"rendered":"https:\/\/www.coincola.com\/blog\/?p=2300"},"modified":"2021-06-30T14:36:17","modified_gmt":"2021-06-30T06:36:17","slug":"cryptocurrency-exchange-and-the-far-it-has-come","status":"publish","type":"post","link":"\/blog\/cryptocurrency-exchange-and-the-far-it-has-come\/","title":{"rendered":"Cryptocurrency Exchange and the Far It Has Come"},"content":{"rendered":"

The cryptocurrency industry is evolving at a fast pace. Along with it, the means through which people can exchange crypto has continued to mature. This maturity is a function of increasing interest in the digital currencies as well as the continued development of the technology which underlies crypto.\u00a0<\/span><\/p>\n

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A brief history of digital currency exchange<\/b><\/p>\n

The story of cryptocurrencies dates back to the \u201890s when computer wizards and cryptocurrency pioneers Wei Dai and Nick Szabo attempted to create digital money separately. Although their creations did not make it far into the public, the idea lived on.\u00a0<\/span><\/p>\n

Similarly, the exchange of digital currency dates back to pre-Bitcoin years. To be sure, there have been various digital currency exchanges that have been shut down for violating banking rules. In 2004, various businesses based in Australia and focused on the exchange of digital currencies shut down voluntarily after authorities indicted them for operating without requisite licenses.\u00a0<\/span><\/p>\n

In the US, businesses like GoldAge Inc. were flagged and also shut down and the operators charged with a felony. Other businesses that have been involved in an exchange of digital currency have disappeared quietly due to the same reason; lack of proper documentation and license to operate.<\/span><\/p>\n

Enter bitcoin and bitcoin exchange<\/b><\/p>\n

Bitcoin is by and large an improvement of the concepts initially proposed by Dai and Szabo. However, the difference is that Bitcoin and the altcoins which came later have found favor in the mainstream.\u00a0<\/span><\/p>\n

In the initial days of bitcoin, holders had no channel to exchange the digital currency. Add to that the fact that the currency was of negligible value. The cryptocurrency had so little value that 10,000 BTC bought two pizzas in May 2010.\u00a0 Perhaps this is a clear reflection of how difficult it was to exchange bitcoin. After all, what you cannot exchange lacks value.\u00a0<\/span><\/p>\n

But the first bitcoin exchange had gone live just two months ago in March 2010. Bitcoinmarket.com was a simple platform where holders could exchange bitcoin for bitcoin and even bitcoin for fiat. However, a series of pitfalls, scams, and scandals saw the platform collapse into oblivion.<\/span><\/p>\n

Later that year, Mt. Gox went life, and it turned out to be the largest Bitcoin exchange at the time. But that was before disaster struck.<\/span><\/p>\n

By early 2011, BTC was on parity with the US dollar. This spoke to the value that BTC was gaining and the fact that the public was embracing the digital currency. Perhaps more important was the fact that people could exchange the currency via a public platform but keep their anonymity.\u00a0<\/span><\/p>\n

In June 2011, Mt.Gox got hacked, and 2,000 BTC disappeared. The exchange later recovered and went on to handle more than 70% of all BTC transactions in 2013. Unfortunately for the users, hackers struck for the second time, and this time made away with 850,000 BTC.\u00a0<\/span><\/p>\n

At the time, this amounted to $460 million ($5.046 trillion by the time of writing).\u00a0<\/span><\/p>\n

Enter Coinbase and other exchanges<\/b><\/p>\n

The Mt Gox hack and the eventual declaring of bankruptcy did not faze the crypto community as development in exchange continued to happen. In the later years, Coinbase and Bitstamp, among other exchanges appeared, and they are still going strong today.<\/span><\/p>\n

The problem of hacking did not go away with Mt Gox however. Bitstamp was hacked in 2015 and BTC worth $5 million at that time was stolen. As such, it has always been a struggle to keep hackers away from exchange platforms ever since.\u00a0<\/span><\/p>\n

Hacking and other issues like money laundering have been hard on the crypto community. In fact, regulators have used them as the basis for denying cryptocurrency clarity in terms of a legal framework.\u00a0<\/span><\/p>\n

Other means of exchanging cryptocurrency<\/b><\/p>\n

Up until this point, it is clear that the most common means to exchange cryptocurrency was through an exchange. Perhaps that is why hackers have largely targeted the exchanges since cryptocurrency became a thing for the mainstream.\u00a0<\/span><\/p>\n

But there are other means of bitcoin exchange, among other altcoins. We discuss some of the below:<\/span><\/p>\n