What is Bitcoin?
My name is Dan Watson. I love many things in life but two of those things happen to be technology and money. This is why I absolutely LOVE the idea of combining the two….
At the time of me writing this, there are literally thousands of cryptocurrencies on the market right now. In order to better explain what they are, I think it is best to start with the granddaddy of all cryptocurrencies which is Bitcoin.
Bitcoin is a cryptocurrency and worldwide payment system. It also happens to be the first decentralized digital currency, as the system works without a central bank or single administrator. This system was designed to work as a peer-to-peer network, a network in which transactions take place between users directly, without any intermediary or third party nessecary.
These transactions are verified by network nodes through the use of cryptography and recorded in a public distributed and viewable ledger. This ledge is called a blockchain. Bitcoin was actually invented and released by an unknown person or group of people under the name of Satoshi Nakamoto and released as an open-source software in the year 2009.
On 18 August 2008, the domain name “bitcoin.org” was registered. In November that year, a link to a paper authored by Satoshi Nakamoto titled Bitcoin: A Peer-to-Peer Electronic Cash System was posted to a popular cryptography mailing list. Nakamoto implemented the bitcoin software as open source code and released it in January 2009 on SourceForge as well. The actual identity of the person(s) known as Satoshi Nakamoto remains unknown even to this day.
Bitcoins are created as a reward for a process known as mining. They can be exchanged for other currencies, products, and services. As of February 2015, over 100,000 merchants and vendors accepted bitcoin as payment. Research produced by the University of Cambridge estimates that in 2017, there were 2.9 to 5.8 million unique users using a cryptocurrency wallet, most of them using bitcoin.
In January 2009, the bitcoin network came into existence after Satoshi Nakamoto mined the first ever block on the chain, known as the genesis block. Embedded in the coding of this paticular block was the following text:
The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.
This note has been interpreted as both a timestamp of the genesis date and a derisive comment on the instability caused by fractional-reserve banking systems.
The receiver of the first bitcoin transaction was cypherpunk Hal Finney, who created the first reusable proof-of-work system (RPOW) in 2004. Mr. Finney downloaded the bitcoin software the same day it was released, and received 10 bitcoins from Mr. Nakamoto. Other early cypherpunk supporters were Wei Dai, creator of bitcoin predecessor b-money, and also Nick Szabo as well.
In the early days, Nakamoto is estimated to have mined 1 million bitcoins by him/herself. That sounds like a lot but back in those days it was worth nothing. These days mining is a large and profitable business and there are several ways to mine cryptocurrency for youself. You can find out more about that by clicking HERE.
In 2010, Satoshi Nakamoto handed over the network alert key and pretty much all control of the Bitcoin Core code repository over to a man named Gavin Andresen. Gavin actually later became the lead developer at the Bitcoin Foundation. After that point, Nakamoto subsequently quietly disappeared seemingly from the face of the earth as nobody has heard from him since.
Andresen stated he then sought to decentralize control, saying: “As soon as Satoshi stepped back and threw the project onto my shoulders, one of the first things I did was try to decentralize that. So, if I get hit by a bus, it would be clear that the project would go on.” Decentralization is one of the best parts about cryptocurrency in general.
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