Bitcoin, created in 2009, was the first decentralized cryptocurrency and remains the most expensive virtual currency worldwide. Other popular cryptocurrencies include: Bitcoin Cash, Ethereum, Dash, Mixin, Litecoin, Zcash, Bitcoin SV and Monero. The cryptocurrency used in the most transactions daily was Ethereum in the fourth quarter of 2018.
The decentralized control of each cryptocurrency works through Blockchain, a public transaction database that functions as a distributed ledger. The size of Bitcoin Blockchain was around 197 gigabytes as of the fourth quarter of 2018. The largest Bitcoin/Blockchain companies in the world include: Circle Internet Financials, Coinbase, 21 Inc., Ripple, BitFury Group, Blockstream, as well as Digital Asset Holdings.
The inflow of new investors in the second half of 2017 led to a surge in the price of cryptocurrencies. The price of Bitcoin, for example, experienced an increase from about 371 U.S. dollars in January 2016 to a peak of over 13 thousand by December 2017. Also, market capitalization of Bitcoin rose from a mere 0.04 billion U.S. dollars in Q1 2012 to a peak of over 230 billion U.S. dollars in Q4 2017. Both the price and market capitalization have fallen since the start of 2018.
The possibility of taking part in exceptionally high returns offered by the cryptocurrency market resulted in huge interest of investors. The number of users of Coinbase, one of the leading cryptocurrency exchanges in the U.S., increased from 0.4 million in January 2017 to 5.6 million by June 2018.
Cryptocurrencies became so popular that governments and banking regulators decided to intervene and warn that Bitcoin could be the next economic bubble. Some governments even prohibited the trading of cryptocurrencies due to lack of control and market unpredictability. Centralization of hashing power in the hands of a few or in a particular geographical area, are the main challenges affecting the cryptocurrency industry.