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Bitcoin Interest-Bearing Accounts Were Conceived Over Ten Years Ago, but the Idea Took 8 Years to Catch On – Featured Bitcoin News

Mikhailev by Mikhailev
September 8, 2022
in Bitcoin
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Bitcoin Interest-Bearing Accounts Were Conceived Over Ten Years Ago, but the Idea Took 8 Years to Catch On – Featured Bitcoin News
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Bitcoin Interest-Bearing Accounts Were Conceived Over Ten Years Ago, but the Idea Took 8 Years to Catch On

Whereas decentralized finance (defi) has created a plethora of protocols that make it so crypto property can collect a yield, ten and a half years in the past a bitcoin alternate known as Bitcoinica launched the primary curiosity accruing system for bitcoin deposits. Regardless of being the primary to check the waters, Bitcoinica finally went bust after a sequence of hacks that noticed roughly 62,101 bitcoin stolen from the alternate, and interest-bearing crypto accounts didn’t return till eight years later.

Bitcoin Curiosity-Bearing Accounts Have been Launched by Bitcoinica in 2012

Lately, interest-bearing accounts and yield-gathering defi protocols are all the trend on the planet of cryptocurrency, however most individuals don’t know that the concept was launched greater than a decade in the past. In mid-February 2012, the now-defunct bitcoin alternate, Bitcoinica, developed an concept that allowed bitcoin deposits on the alternate to assemble curiosity. The concept was introduced by the 18-year-old Zhou Tong, a bitcoin fanatic who based the alternate the 12 months earlier than. Bitcoinica noticed 3,724.12 BTC, price $71.56 million as we speak, traded in the course of the buying and selling platform’s first 24 hours of operation.

Bitcoin Interest-Bearing Accounts Were Conceived Over Ten Years Ago, but the Idea Took 8 Years to Catch On
A screenshot of Bitcoinica, one of many earliest bitcoin exchanges that was hacked and later liquidated in August 2012.

By September 2011, Bitcoinica was the second-largest bitcoin buying and selling platform by volume behind Mt Gox. “We’re glad to announce that now we have began the general public take a look at run of our curiosity system,” the Bitcoinica founder wrote on February 13, 2012. “We’re the primary web site to supply curiosity for Bitcoin deposits. This submit is meant to clarify how the system works — Assuming you deposit $10,000 with us and the rate of interest is at all times 4.17, you’ll get $4.17 daily or $1,644 yearly (with compound curiosity).”

Bitcoin Interest-Bearing Accounts Were Conceived Over Ten Years Ago, but the Idea Took 8 Years to Catch On
The 18-year-old Zhou Tong saying the bitcoin interest-bearing accounts on February 13, 2012, by way of the discussion board bitcointalk.org.

A substantial amount of as we speak’s interest-bearing protocols stems from the world of decentralized finance (defi), which is an entire lot totally different than Bitcoinica’s interest-bearing account providing. Bitcoinica’s idea is much like what centralized crypto exchanges like Coinbase, Crypto.com, and plenty of others supply as we speak, as Bitcoinica was a centralized bitcoin buying and selling platform.

Bitcoinica was much like Celsius, in a way, because it provided interest-bearing funds however finally went beneath from monetary difficulties. Bitcoinica’s curiosity accounts have been calculated each hour, and payouts have been distributed after every day ended. “Bitcoinica has been operating nice for the final [five] months, and we’re the quickest rising bitcoin enterprise ever,” Zhou Tong wrote on the time.

After the Bitcoinica interest-bearing accounts have been launched, the very subsequent month Bitcoinica was hacked and misplaced 43,554 bitcoins price $837.17 million utilizing as we speak’s alternate charges. Then greater than a month later, on Might 11, 2012, Bitcoinica was hacked once more dropping 18,547 bitcoins, price roughly $356.50 million as we speak.

Crypto Yields took 8 years to Mature After Bitcoinica’s Collapse

The interest-bearing accounts by way of Bitcoinica by no means actually noticed traction after the controversy that surrounded the Bitcoinica founder Zhou Tong and the mysterious hacks. Bitcoinica was finally taken offline and by August 2012, the corporate entered into liquidation. Curiously sufficient, the very day Zhou Tong introduced the BTC interest-bearing account idea, one of many first feedback requested the founder to guarantee the neighborhood that their funds have been protected.

“Soothe our fears and inform us why Bitcoinica is not going to be hacked, and inform us about how our cash is not going to be stolen out of skinny air?” the person requested the Bitcoinica founder. Whereas Zhou Tong pledged to maintain the alternate protected, the buying and selling platform’s two breaches have been thought-about among the most controversial hacks in crypto historical past, apart from the scandals surrounding Mt Gox.

It took greater than eight years to see crypto interest-bearing accounts lastly take maintain within the digital forex trade. Furthermore, with defi protocols, yields might be earned in a non-public and noncustodial style with out holding crypto property on a centralized alternate.

Nonetheless, very like Bitcoinica, interest-bearing crypto platforms can fail, and Celsius is one such lender that went bankrupt in latest occasions. Whereas Celsius and Bitcoinica have been centralized, defi platforms can go beneath too, like when the Terra blockchain ecosystem imploded.

When UST de-pegged from the $1 parity, defi customers leveraging the lending utility Anchor Protocol they needed to take care of the financial institution run that adopted. Different defi purposes have been hacked or have seen rug pulls, and defi customers seeking to achieve curiosity have misplaced all their cash.

Tags on this story
2011, 2012, 8 years, announcement, Bitcoin (BTC), Bitcoinica, Bitcoinica interest accounts, Bitcointalk.org, BTC, BTC interest-bearing account, Celsius, Centralized, Centralized Exchange, Crypto Lenders, decentralized finance, DeFi, Early Days, hacked, Interest Bearing Accounts, Interest-Bearing, leverage, liquidated, maturing, Maturity, mid-February 2012, Zhou Tong

What do you concentrate on the primary bitcoin interest-bearing accounts provided by Bitcoinica greater than a decade in the past? Tell us what you concentrate on this topic within the feedback part under.

Jamie Redman

Jamie Redman is the Information Lead at Bitcoin.com Information and a monetary tech journalist residing in Florida. Redman has been an energetic member of the cryptocurrency neighborhood since 2011. He has a ardour for Bitcoin, open-source code, and decentralized purposes. Since September 2015, Redman has written greater than 5,700 articles for Bitcoin.com Information in regards to the disruptive protocols rising as we speak.




Picture Credit: Shutterstock, Pixabay, Wiki Commons

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