Satoshi Nakamoto and Bitcoin

2 Feb 2023

A peer-to-peer electronic cash system

After several attempts to use digital currency (the most successful one was B-money), Satoshi Nakamoto began writing a white paper in 2008. In October of the same year, the white paper was published with the title "Bitcoin, a peer-to-peer Electronic cash system".

This 9-page paper outlines the design philosophy and rationality of digital currency. Its purpose is to do something that could not be done before: create anonymous, trustless, decentralized electronic money.

"What we want to do is an electronic payment system based on cryptographic proofs instead of requiring a central authority’s credit, allowing any two willing parties to directly transact with each other without the need for a trusted third party, which is not computationally feasible The reversed transaction will protect the seller from fraud and can easily implement conventional escrow mechanisms to protect the buyer."

The Proof-of-Work (POW) protocol began with Wei’s Dai B-money and was designed to implement the “one-CPU-one-vote” policy outlined by Nakamoto in his now famous paper. Unlike traditional currencies, Bitcoin is also designed as a deflationary currency, which means that there will always be only a limited number of currencies, 21 million. Miners found that the rewards for each new block will decrease over time, halving every 210,000 blocks (approximately every four years).

Satoshi Nakamoto did not like the modern banking system, especially the reserveless bank, because the bank accepts deposits, makes loans or invests, but is required to hold a reserve equivalent to a small portion of its deposit liabilities.

According to Wikipedia, Satoshi Nakamoto claimed to be a person living in Japan, born on April 5, 1975. The true identity is still a mystery, but in the past decade, there have been several claims and many speculations about the founder of Bitcoin.

Satoshi Nakamoto

Bitcoin was initially played with out of user interest and tested it. The first real use of BTC for real purchases was in 2010, when Laszlo Hanyecz bought two pizzas for 10,000 BTC, the first tangible asset transaction ever.

Since then, it has been used to pay for services and products worldwide, but there is still a long way to go to achieve mainstream adoption and achieve global legitimacy. 2017 was the year when Bitcoin attracted worldwide attention. The price of Bitcoin surged from a high of $900 in January to a high of $20,000 in December, an increase of more than 2100%.

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