In every word processor/messageboard/etc I’ve ever used, there is a blinking vertical line ( | ) to indicate where the text will start from. At some point, someone had to decide to make this, and enough people reasoned it was a good enough idea to continue it. So who invented it? And why a vertical line, and not something else?
I first saw it in Word, on the first Macs. Previously, it was either a blinking underline or a solid block o’ light (color varied on whether it was a green screen, orange or black & white).
So, I blame Microsoft. Or maybe Apple, because it may have been their requirement that cursors be blinking pipes.
In hard-copy parlance, I guess it would be called carat using the symbol ^ . Early GUI had other uses for that symbol so they had to replace it with something else. Why a flashing sideways underscore? I dunno.
I have no idea who invented it, but the advantages are obvious. You want a graphic that can easily fit between letters or other characters on the same line, so a shape that is as high as the space available for letters and as narrow as possible to avoid obscuring letters. And since something so skinny isn’t hugely obvious - make it blink while the user isn’t actually typing. Blinking always attracts attention. 
Well the reason it’s a thin line is that makes it obvious that the insertion point is BETWEEN characters. (If you change the text mode to “overwrite” which Word still lets you do even though nobody’s done that on purpose in like 20 years, it will be a solid block highlighting the entire character, and not a thin line between characters.)
Edit: I’m guessing the blinking is just there to make it easier to see, especially on old monitors with slow refresh rates.
As for who, it may have been Susan Kare.
BTW, the blinking line is called the “insertion point.”
Argh. There was just a diamond-ring thread where they kept using the wrong spelling for the weight: “carat” is a gem weight, “caret” is this ^ thing. And a karat is a carat.
Once, playing poker, I met a guy formerly from Microsoft who said that his claim to fame was inventing the wavy red line under misspelled words.
That’s not right either. Carat is usually a weight measure for precious stones. One carat is 200 milligrams. Karat is only a purity measure for gold (and perhaps other precious metals) 24 karat gold is 99.9% pure. The purity scales down from there.
and don’t even get me started on parsnips… I mean carrots 
Blinking is not just to make it easier to see, but to clearly indicate that the line is not an actual part of the text. And it seems to have been in use since it was possible to place a line between characters, which would be the point when GUIs were first being used for text editing. I know of an old CGA GUI, designed to run on the 286, which used the convention when renaming files. I just can’t remember the name.
(Due to the amount of memory needed to store graphics, computers for a while had a separate text mode and graphics mode. The graphics mode would thus be very low resolution, not high enough to work with text, and the text mode used fixed place characters, which would not allow a line to be placed between them without moving the characters around.)
Wouldn’t it have been a feature taken from command line operating systems that typically had a blinking cursor at the insertion point?
The theoretical exception might be something like the old Commodore graphics system, where one could use a sprite to put in the vertical caret line between the characters. I do not think anyone ever actually did that, though.
The first GUI was invented for the Xerox Alto. The manual for Bravo (their original gui text editor) refers to the text insertion point as a caret, which I suspect means a real caret (^) on the bottom on the text line. The later product Xerox Star also used the blinking caret as an insertion point marker (you can find a video of Star on Youtube).
Apple GUI design was inspired (directly copied) from Xerox products, but they may well have chosen the | over the ^.
OK, this being GQ and all, I feel I have to correct this bit of oft-repeated misinformation.
Although Apple was “inspired” by PARC’s work, the GUI that Apple developed was substantially different, including overlapping windows, single menubar, and 1-button mouse.
That is probably fair, although the fact that Apple licensed material from Xerox was enough to scupper Apple v Microsoft.
Certainly Apple did away with the many mouse/keyboard/mouse operations that characterized Xerox Star, and heavily influenced future GUI developments. I would argue that Xerox Star had a much better underlying OS/network underpinning, though, and it was a shame for OS design it didn’t really succeed.
I’m not sure about Bravo, but here’s a video of the Alto’s software (running on an emulator) where you can see its blinking caret at a command line prompt. So the Alto apparently had a caret comparable to today’s ones (at least for some uses, at some point in its history).