CCs began with the advent of Bitcoin in 2009, when a mystery person created what people thought was impossible; a coded, untraceable currency with no physical form. The creator, Satoshi Nakamoto, does not exist in a conventional sense; it is a made up identity of which nobody has proven claim to. Satoshi invented a shifting block cipher of which the public ledger is publicly available, meaning you don't need a bank to verify purchases. This was huge for its intended audience, and has been mimicked many times with various other CCs like Litecoin. Bitcoin was originally created to be used to anonymously purchase illegal goods online, with no bank record. Mainly built for Tor based e-commerce sites such as Silk Road, this provided the perfect option for people to purchase drugs or services anonymously. Go to your bank, exchange money for a cashiers cheque or money order, and then exchange this for Bitcoin online. Bitcoin is then traded for illegal goods or services, with no record of you having purchased the currency at all.
At the start of Bitcoin in 2009-2010, many companies saw the potential gains to be had early on, and allowed users to purchase legal services with the niche currency. A famous example of this is the 'Pizza Story'; someone in America purchased 2 pizzas for 10,000 BTC in 2010. Today, with current BTC prices, this would be worth over $25 Million. That's some expensive pizza.
Across the world people have been making money off of Bitcoin, weather through buying and selling, investing, or even mining. Mining is where a user sets up a computer to process the public algorithm and find small amounts of unclaimed Bitcoins by sheer brute-force. Around 2011 and 2012, it was so profitable for people to mine that it set up a knock on effect for anyone doing it; mine a few BTC, buy another GPU or server rack, mine more, rinse and repeat. People built small empires on mining, but this side has fallen to the wayside in recent years, but why?
It's simple; there is a limited number of Bitcoins on the market. There's no government to produce more, or to profit from it, there is simply a finite amount of Bitcoin in the world. Mining becomes less effective when reserves run low, and the mining empires began to slow and fall. More Bitcoins have been released to the public, but they have not been produced, someone was simply storing them until they became worthwhile to sell. So what do you do when your mine is running low? You move to another spot and continue mining.
As mining began to run dry, there was a massive increase in demand for alternatives to this currency, where people could trade them as a stock and use them for anything they wanted. This is where CCs such as Litecoin and Ethereum began their rise, filling the market space that Bitcoin was leaving behind. Swimming in its wake, if you will. Now, these CCs are all virtually the same, disregarding their current popularities. They all use a tweaked or reinvented version of Bitcoins original algorithm, and mining for any of the CCs is as easy as it is with Bitcoin. Mining software is free, open source, and easily available online, but the returns are miniscule now for the average user. Much like the Gold-Rush back in the heyday of California, all of the economically viable mining has already been done, and people turning up now are mostly just too late to profit from it.
Historically, many countries do not fundamentally agree with untraceable crypto-currencies, but why? Is it because these currencies have been used for illegal trading? No, because many full-blown public companies such as Microsoft and Sony accept them as legal tender. Countries do not like Bitcoin because they have no control over them; they are a wildcard in the system, capable of inflation and devaluing the same as any other commodity, but independent of any country. Crypto currencies have made many people into millionaires, but with none of the legal impacts that, say, investment banking would come with. If you vaguely remember owning Bitcoin on an old hard-drive somewhere, definitely move heaven and earth to find it, you could be a hidden millionaire too.
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