Fourteen years have passed since Satoshi Nakamoto mined the first Genesis Block on the Bitcoin (BTC) blockchain. Before 2009, no viable form of digital currency has existed. A fact which not many know is that Bitcoin owes its existence to advances in cryptography dating all the way back to 1977.
That year, three MIT researchers by the names of Ron Rivest, Adi Shamir and Leonard Adleman created the RSA crypto system. It utilized asymmetric algorithms that required two different crypto decryption keys to verify data – one private and one public.
Building the blockchain building blocs
The second breakthrough which have given rise to Bitcoin and digital currencies is from the efforts of the DigiCash workshop towards the end of the 80’s. Created by David Chuam, DigiCash is a blind signature technology utilizing the peer-to-peer approach, which enables the existence of anonymous electronic payment systems that are untraceable for third parties. Allegedly, Microsoft has made an offer to acquire DigiCash which was refused and consequently went bankrupt.
Nick Szabó, the creator of Bitgold Network, was utilizing the RSA Cryptographic key system to validate data, and added to that was the fault tolerance consensus algorithm to verify transactions. One of Szabó’s key contributions to the crypto field was that he laid out the preliminary concept of smart contracts.
Then comes 2009 and Satoshi Nakamoto unleashes Bitcoin and the blockchain technology as we know it. A bit of an urban legend, some in the crypto community believe that Nick Szabó is actually Satoshi Nakamoto.
Honest aims by Europe’s regulators?
Europe’s Markets in Crypto Assets (MiCA) regulation represents a new way of thinking about crypto assets. The European Union is the first to regulate this market ahead of everybody else. The MiCA regulation tries to achieve 3 things: to regulate providers, to set a leveled playing field for all the players, and for customers to create a secure environment to operate on the crypto assets market. An additional aim is to stabilize the market itself, and perhaps encourage investments into the markets.
MiCA categorizes crypto assets into 3 groups:
1 - Asset referenced tokens (ART)
2 - E-money tokens (EMT)
3 - Other crypto-assets
The crypto community is yet to witness the first key regulation to be officially put into effect, and many expect Europe’s inclusive MiCA regulation to the first-mover towards cryptocurrency regulation. Yet, many have doubts to whether cryptocurrency regulation in essence is for the benefit of the traders, the regulators, or both.
Some crypto traders are concerned with the weaponization of financial markets, and may expect such regulatory scrutiny to further-weaponize the financial market against the average Joe, while other members of the crypto community see regulation as a force for the good as it has the potential to bring about the best crypto service providers and the most thought-through customer safety nets.