The history of cryptocurrency began with early concepts of cryptographic electronic money. In 1983, David Chaum proposed ecash, a cryptographic electronic money system implemented in 1995 as Digicash, which allowed untraceable digital currency transactions through encryption. In 1996, the National Security Agency (NSA) released a paper detailing an anonymous electronic cash system.

In 1998, Wei Dai conceptualized b-money, a decentralized, anonymous cash system, and Nick Szabo introduced bit gold, which laid the groundwork for future cryptocurrencies by combining cryptography with proof-of-work mechanisms. These ideas culminated in the creation of Bitcoin in January 2009 by the pseudonymous developer Satoshi Nakamoto, leveraging the SHA-256 cryptographic hash function in its proof-of-work algorithm.

Cryptocurrencies have experienced significant volatility with notable bubbles and crashes in 2011, 2013–2015, 2017–2018, and 2021–2023. Governments worldwide began addressing cryptocurrency's growing influence. In 2014, the UK Treasury commissioned a study on cryptocurrencies, with a comprehensive report released in 2018 and consultations on regulation in 2021. Notably, El Salvador became the first country to accept Bitcoin as legal tender in June 2021, followed by Cuba recognizing and regulating cryptocurrencies in August 2021. Conversely, China banned all cryptocurrency transactions in September 2021, completing a series of restrictions on mining and intermediaries.

Technical advancements also shaped cryptocurrency history. In September 2022, Ethereum, the second-largest cryptocurrency, transitioned from a proof-of-work (PoW) to a proof-of-stake (PoS) mechanism during "The Merge." This upgrade reduced Ethereum's energy consumption and carbon emissions by 99.9%, showcasing efforts to address environmental criticisms of cryptocurrencies.

However, the industry faced challenges, exemplified by the collapse of FTX Trading Ltd. in November 2022. FTX, once valued at $18 billion, filed for bankruptcy, causing widespread financial repercussions beyond its customer base. The incident highlighted the need for improved regulation, user experience, safety, and controls within the cryptocurrency ecosystem. Experts emphasized these deficiencies and called for greater regulatory intervention to protect investors.