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Intro Guide to Crypto - Episode 3: Crypto Basics

Intro Guide to Crypto - Episode 3: Crypto Basics

What are cryptocurrencies?

The most comparable technological innovation is the internet.

Before the internet we transferred information by use of pigeons, then electronic telegrams using morse code, then we started using the ‘internet protocol’ which allowed us to transfer information with the click of an email.

But did that mean we could transfer value as efficiently as sending an email?

  • To transfer money internationally using the traditional finance system it is quicker to put the money in a briefcase on a plane and fly it over there.

  • Cryptocurrencies aim to solve this issue; due to the advanced technology they use – the blockchain.

What is the evolution of cryptocurrencies, and how did it all start?

The first cryptocurrency to be created was Bitcoin. The following is a brief history of Bitcoin/crypto:

  • 2008

    • 18th August - the domain name (owned by Satoshi Nakamoto and Martti Malmi) was registered.

    • In order to spread responsibility and prevent any one individual from gaining control of the Bitcoin project, Satoshi gave ownership of the domain to additional people, separate from the Bitcoin developers.

    • 15th September - Lehman Brothers filed for Chapter 11 Bankruptcy protection. This has triggered a lack of trust towards the banking system, as it remains the largest bankruptcy filing in U.S. history.

    • 31st October - Satoshi Nakamoto published the Bitcoin whitepaper, a document released by developers that explains the technology and purpose of the project they are working on. This first introduced the foundation of Bitcoin and blockchains.

    • 9th November - Bitcoin Project registered at

  • 2009

    • 3rd January - a headline from The Times, was quoted by Satoshi Nakamoto in the genesis (first) block on the Bitcoin blockchain, Satoshi Nakamoto quoted a headline from The Times: “Chancellor on Brink of Second Bailout for Banks.” This suggested that the Bitcoin project was started in response to woes in the financial system.

    • 3rd January - the genesis block, the first block of the Bitcoin network, is mined (created).

  • 2015

    • July 30th - Ethereum, the first smart-contracts platform, launched. This was significant as the utility of smart contracts has resulted in a wide range of use cases, including (but not limited to) Decentralised Finance, NFTs and metaverse applications.

  • 2018

    • 26th November – Ohio accepts tax payments converted from Bitcoin via BitPay, becoming the first U.S. state to do so.

  • 2021

    • 7th September - El Salvador become the first nation to adopt Bitcoin as legal tender alongside US Dollars, as their central bank also decides to accumulate Bitcoin.

  • 2022

    • 11th August - BlackRock, the world’s largest asset manager, offers Bitcoin to its retail clients via its Aladdin platform.

Why do cryptocurrencies have value?

  • The value of a cryptocurrency depends on the value of the blockchain network that it operates on.

    • In order to use a blockchain platform, or operate within a blockchain-based community, you typically have to pay for operations with the network’s native token.

    • This can be compared to the way in which we use oil in every-day life in order to fuel our real-world economy, hence meaning that oil is very valuable.

    • Therefore, the more valuable a digital network is, the more valuable the native cryptocurrency for that network is.

  • Cryptocurrencies allow you to own a part of the network.

    • Before cryptocurrencies were born, the internet held the title for the fastest growing adoption of a new technology during its early years (1990s).

    • Cryptocurrencies have grown at around double the speed of adoption growth relative to the growth of the internet.

  • The chart below from GMI (Global Macro Investor) compares the growth of internet users to the growth of crypto users after both innovations reached 5 million users. ( – World Bank – Global Macro Investor, March 2022)

    • You can see that crypto has been growing at almost double the rate at which the internet grew over the first 5 years.

    • If crypto growth slows to match the internet’s growth rate from year 6 – year 10, then the crypto industry will increase from 295 million users to 1.2 billion by 2026.

crypto users vs internet users yearly growth

During the time of internet’s early years of rapid growth, investors were unable to invest in the most profitable internet networks themselves. Some were able to invest in shares in the likes of Meta (Facebook) and Google early on, but this was mainly accredited investors.

  • The difference with cryptocurrencies is that you are able to own a part of the actual network, and therefore potentially profit incredibly.

  • This provides an incredible opportunity for those with small amounts of capital, but who are willing and determined to put the work in to find the next Facebooks and Googles, and therefore benefit financially.

If you would like to learn more about cryptocurrency, feel free to contact us. GlobalBlock aim to provide guidance and education throughout your crypto investment journey.

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