The 13th birthday of the Bitcoin (BTC) white paper has crept up just as the world continues to deal with a global pandemic, inflation fears, an ast
The 13th birthday of the Bitcoin (BTC) white paper has crept up just as the world continues to deal with a global pandemic, inflation fears, an astounding memecoin mania trend and growing institutional adoption of the cryptocurrency space.
On October 31, 2008, Satoshi Nakamoto released the Bitcoin white paper to a cryptography mailing list hosted by Metzdow. The Metzdow mailing list was run by a group of cypherpunks and was filled with ideas meant to create a form of digital currency: some of these have even been cited in the Bitcoin white paper.
Satoshi’s white paper came in a message titled “Bitcoin P2P e-cash paper,” in which Nakamoto explained that his digital currency is fully peer-to-peer (P2P) and requires no trusted third party for a transaction to occur. Through a peer-to-peer network, Bitcoin solved the double-spending problem. Bitcoin also allowed network participants to remain anonymous and was secured through a proof-of-work (PoW) consensus algorithm.
At the time, the white paper wasn’t received the way people would expect it to be, knowing what they know today. Only a handful of people saw Nakamoto’s email and replied with their thoughts and concerns surrounding Bitcoin.
Speaking to Cointelegraph, Leo Matchett, co-founder and CEO of Decentralized Pictures, a non-profit organization supporting independent filmmakers, said that the Bitcoin white paper “is the genesis of a new era in monetary sovereignty,” adding, “Satoshi stood on the shoulders of giants and solved problems that those who came before could not.”
Matchett opined further that the white paper “was truly the beginning of a new era for monetary systems of the world” because it “brought forth the idea that decentralization has more value than centralization.” Indeed, the idea of Bitcoin attempted to solve numerous problems including counterfeiting, steep on-ramps and counterparty risk.
Running Bitcoin
After the white paper was shared on the cryptography mailing list, slowly but surely, discussion surrounding the document started growing, with the Bitcoin network being launched in early 2009. At that time, Hal Finney, a cypherpunk that worked with the PGP Corporation developing leading encryption products, was already involved.
Hal Finney is well-known in the cryptocurrency space for being involved in the first Bitcoin transaction and being the first person after Nakamoto to run a copy of the network through a node. After setting it up, Finney tweeted he was “running bitcoin.”
Running bitcoin
— halfin (@halfin) January 11, 2009
The cypherpunk, who tragically passed away in 2014 as a result of ALS complications and had his body cryopreserved by the Alcor Life Extension Foundation, described his work with Satoshi in a forum post where he revealed he started mining BTC on “block 70-something,” and that after some correspondence, Satoshi sent him 10 BTC to test whether the network worked.
At the time, there was no demand for space on the blockchain, so the transaction was successfully processed with a 0 BTC fee attached to it. The 10 BTC were worthless at the time, but the transaction helped fix some bugs in BTC’s early days.
That first Bitcoin transaction made it clear that the network worked, and while there was still a lot of work to be done to get where it is today, it was a first step in the right direction. A year later, in 2010, the first commercial Bitcoin transaction would occur.
$600 million+ for two pizzas
On May 18, 2010 developer Laszlo Hanyecz created a post on the Bitcointalk forum offering 10,000 Bitcoin “for a couple of pizzas.” Hanyecz offered to pay another forum member the coins if they got him two large pizzas, which could even be homemade.
The post was met with skepticism, as 10,000 BTC at the time weren’t worth the cost of two pizzas, or were anywhere near it. Only on May 22, after a follow-up, did Hanyecz report that he “successfully traded 10,000 bitcoins for pizza.”
At the time and despite Bitcoin’s low value and the community’s small size, one user noted that a “great milestone was reached.” That day is now known in the cryptocurrency community as the “Bitcoin Pizza Day.”
The first commercial Bitcoin transaction led to the creation of an ecosystem now worth over $2 trillion and proved that Bitcoin has a number of use cases that need to be considered. For the first time ever, Bitcoin was used as a true medium of exchange.
A multi-trillion dollar industry
The cryptocurrency’s price would rise over time, partly because of adoption and partly because of speculators looking to profit off of its incredible volatility. In the midst of all that, new businesses were created in what ended up becoming a large asset class.
Speaking to Cointelegraph, Miha Grčar, head of global business development at cryptocurrency exchange Kraken, said: “no one could have predicted the tidal wave of change unleashed by the publication of a 9-page PDF.”
The Bitcoin white paper, Grčar said, laid…
cointelegraph.com