| title | description | published | date | tags | editor | dateCreated |
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Bitcoin |
Bitcoin is the first blockchain and cryptocurrency. |
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2021-05-16 00:28:57 UTC |
bitcoin |
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2021-03-15 13:52:02 UTC |
Bitcoin is the first ever blockchain and cryptocurrency, created by an individual (or group of individuals) who went by the name Satoshi Nakamoto. The goal behind Bitcoin was to create a "peer-to-peer electronic cash system" that takes trust out of the equation, but over time it has become better known as a store of value, like gold.
Bitcoin blocks are visualized on TxStreet as orange buses with the Bitcoin logo, the block number, and the transaction fee associated.
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Bitcoin (BTC) is the name of the first blockchain and its native cryptocurrency. The Bitcoin blockchain, which is a global revolution in information keeping and the first true peer-to-peer financial network, uses a Proof-of-Work consensus-algorithms to prevent double spending and ensure the data contained within transactions is accurate, secure, and can be tracked forever.
Bitcoins, the cryptocurrency, are issued through a process called mining and are hard capped at a maximum supply of 21 million. Every 210,000 blocks, Bitcoin experiences a halving event, which is when the reward that miners receive is cut in half. Each bitcoin is divisible up to one hundred millionths, known as satoshis to honor the name of Bitcoin's creator. Both whole bitcoins and satoshis can be sent, and when done so this registers a transaction on the Bitcoin blockchain. Transactions have fees attached to them to help pay back miners which are measured in satoshis-per-byte, and to keep track of every transaction, the blockchain uses a distributed ledger, which is the entire list of transactions held and kept up to date by nodes of the Bitcoin network. Nodes are servers that are set up specifically to hold a copy of the digital ledger and act as a data point for the network.
Before Bitcoin could be created, the groundwork had to be laid. In the previous several decades, many cryptographers had been researching for a way to send and receive information privately, so that no third-party could interfere, in fears that the internet and the technology it brought would lead to a lack of privacy. The idea of linking blocks in a chain by using a hash function to store information came about in 1979, when Ralph Merkle published a dissertation. In 1982, David Chaum, in his own dissertation, outlined a blockchain almost identical to Bitcoin's but without proof-of-work. In 1983, Chaum released a research paper introducing the concept of digital cash and would use this research to found an early form of an e-commerce company known as DigiCash in 1989. Although Digicash would later go bankrupt, it inspired the creation of "X.com" which would eventually become PayPal.
Very few people were researching cryptography at the time, but that slowly began to change when a group of cryptographers began meeting together in the San Francisco Bay area in 1992 under the name Cypherpunks, where they would discuss ways to apply cryptography, including the concept of electronic cash. The Cypherpunks mailing list was also started in 1992, and became a popular place for cryptography discussion, inspiring many to become more involved. Shortly after in 1993, two cryptographers by the names of Cynthia Dwork and Moni Naor created Proof-of-Work to combat junk mail.
This digital currency movement combined with the world's newfound love for computers and technology led to the creation of multiple digital currencies like E-Gold which had a value based on that of gold, B-Money which many consider to be an early version of Bitcoin, and Hashcash which would later be implemented in Bitcoin's mining protocol. Despite all of these digital currencies failing over time to things like government shutdowns and the double-spend issue, they were unequivocally important to the creation of Bitcoin.
In 2008 Satoshi Nakamoto, the pseudonym used by the person or group of people that created Bitcoin, published the Bitcoin whitepaper which used sources over fifty years old and included how technologies like Proof-of-Work and Hashcash would be implemented. By utilizing Proof-of-Work, Bitcoin solved the double-spend issue that plagued previous attempts at cryptocurrencies. The genesis block and first Bitcoin transaction between peers both occurred in January of 2009, marking what most would call its birth. The recipient of this transaction was Hal Finney, who was known to be a prominent contributor to the Bitcoin project in its early days, but has since passed.