Bitcoin’s ConceptionMay 25, 2022
Bitcoin’s conception is a topic that has been argued over and re-analyzed for years. Bitcoin was conceptualised in 2008 by an anonymous programmer or group of programmers who refer to themselves as Satoshi Nakamoto. The Bitcoin protocol began running on January 3, 2009, and the first Bitcoin block, ‘The Genesis Block,’ was mined on January 9th of the same year.You can also visit Today Profit for further information.
As Bitcoin continues to grow in popularity and price, its conception becomes all the more relevant. Many theories exist currently as to who exactly Satoshi Nakamoto is/was. For example, Nick Szabo, a blogger with his own blockchain invention called “bit gold”, is often considered to be Satoshi Nakamoto by many Other people believe that the name Satoshi Nakamoto is itself a pseudonym for either a group of people or simply a digital persona that represents whoever may be utilising it at the moment.
Regardless, Bitcoin’s conception brings up an interesting topic in cryptography and computer science. Before Bitcoin was developed, there were many issues with online transactions. For example, one could argue that PayPal allows users to make transactions relatively safely if they are not being scammed themselves. However, PayPal stores all information given by customers on their servers which can leave them vulnerable to both physical and digital theft. Additionally, PayPal requires the use of personal accounts which allow identities to be attached to financial information.
Since these personal accounts are much more traceable than anonymous cryptographic addresses (Bitcoin addresses), any transaction conducted with them can be seen as originating from that account. Bitcoin’s conception solved these issues by providing a decentralised digital currency that was cryptographically secure and pseudonymous, not requiring users to disclose any personally identifiable information.
One of the first documented purchases made with Bitcoin dates back to May 22, 2010. At this time an individual paid 10,000 BTC for two large Papa John’s pizzas which worked out to roughly $25. It is interesting to note how far Bitcoin has come since its conception in 2009. From being worth mere pennies per unit, it now fluctuates between roughly $800-1000 USD per BTC at the time of writing this article. Although there are many factors that influence Bitcoin’s price daily, one of the most reliable and heavily scrutinised factors is its fundamentals.
The Bitcoin protocol works on a cryptographic principle similar to that of many modern digital signatures used in online transactions today. For example, when using your credit card to make an online transaction, your card number is needed to validate the authenticity of your request. Cryptographically secure systems work in almost exactly the same way except they are much more efficient at doing so without making any mistakes or being exploitable. The public key cryptography system that Bitcoin uses allows for funds transfer between accounts while also implementing a decentralised security measure ensuring that only the account holder can send their funds out while preventing other users from stealing money from them. And just like traditional fiat currencies, fractional units of bitcoins (Satoshis) can be sent and received to represent smaller units of currency like cents or pennies.
The Bitcoin protocol is open-source and makes use of the blockchain, which is a method of consensus among online accounts participating in verifying transactions on the network. These accounts are known as ‘miners’ who receive newly created bitcoins in exchange for their services to verify transactions. In this sense, Bitcoin has been likened to a decentralised public ledger that records all transactions that have ever been conducted . To incentivize miners into performing these tasks, Satoshi Nakamoto wrote the following when describing how new bitcoins could be issued: “The steady addition of a constant amount of new coins is analogous to gold miners expending resources to add gold to circulation. An attacker… attempting to buy something with infinite money would always win the transaction. This essentially means that new bitcoins are being added at a predictable rate which cannot be easily exploited by miners to obtain bitcoins without expending any resources.
The design of Bitcoin is open-source and decentralised, therefore there is no single authority controlling it which makes it both stable and flexible. Stability comes from the fact that no one person or group can manipulate the system for their own interest as everyone has an incentive to keep it working properly due to mining efforts. Flexibility stems from its implementation of scripting language for transactions, allowing users to create their own unique rules on how funds should be transferred between accounts.