Happy birthday Bitcoin: Cryptos first white paper turns 13 today! | The BTCC Blog
13 years ago- Oct 31, 2008 Bitcoin (BTC) – the first fully decentralized, peer-to-peer electronic cash system was conceived by anonymous creator(s) Satoshi Nakamoto. Bitcoin’s whitepaper, titled: A Peer-to-Peer Electronic Cash System introduced bitcoin into the world. After 13 years, the whitepaper continues to serve as a testament bitcoin’s capabilities and its growing influence in the world of fintech.
Bitcoin whitepaper explained, where it all beganIn the wake of the global financial crisis that plagued the end of 2008, anger at the worldwide banking industry, governments and other centralized authorities reached its peak. Financial institutions charge users high transaction costs which goes towards their efforts in resolving disputes and mediation. Small or micro-transactions are impractical thus subjecting users to a minimum transaction size payable to the financial institutions. The process is deemed slow and expensive. Verification of ownership and double-spend problem are also prominent issues associated with third party financial intermediaries.To address the issues caused by our overreliance on intermediary financial authorities, bitcoin whitepaper builds a case for the invention of a new decentralized online payment system.Problems and solutions1. Eliminate the need for third party intermediaries via cryptography and blockchain“I’ve been working on a new electronic cash system that’s fully peer-to-peer, with no trusted third party.” Were the words written by Satoshi in an open email. Satoshi argues that electronic cash payments are problematic because of its reliance on a “third-party intermediary” like a bank or service to approve and execute each transaction.
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The bitcoin currency system eliminates the need to rely on third-party intermediaries by enabling peer-to-peer transactions that are immutable and based on cryptographic evidence to protect users from fraud. banks are not required to facilitate transactions. governments are also unnecessary in creating and spreading the currency. this is possible because bitcoin is backed by blockchain technology, a public record of digital transactions in a decentralized database network. runs simultaneously on thousands of computers to distribute records around the world. everyone in the network is constantly validating and updating this system.2. solving the problem of double spending through the timestamp server & proof-of-work Until the advent of bitcoin, double spending, when a digital currency is spent twice or more in transactions, was a big problem in digital currency transactions. This is because it is impossible for the recipient to determine if the funds being spent have already been spent without the involvement of a third party verification service. when a user double spends their coins, the overall supply would inflate and everyone else’s money would degrade. .time stamp server is software that records transactions in real time to include them in a cryptographic hash. the hash is a sequence of unique numbers and letters that serves as a complex mathematical problem that miners solve before the transaction can be added to the blockchain. this process is called proof of work or mining. this is a consensus system for validating transactions. this allows each node (a computer connected to a cryptographic network) involved in transaction validation to maintain and share the same set of transaction records to form a decentralized peer-to-peer network system. miners who successfully solve a proof-of-work problem (the solution is a correct hash), a new block is added to the blockchain. miners are rewarded with bitcoins (incentive). subsequently, new transactions are broadcast to all computers or nodes in the bitcoin network.
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Attempts to reverse transactions would require large expenses, including expensive hardware equipment and electricity usage, making fraudulent transactions infeasible. for example, it would take 51% of bitcoin’s total hash power to reverse a single hour of transactions. the difficulty in resolving pow and operating as a popular consensus mechanism also makes it unlikely to change a blockchain, as it would require re-mining all subsequent blocks. the blockchain is maintained by a distributed network of nodes and all participants must cooperate to reach a consensus. As more miners join the network, the probability of a single person or group gaining enough computational power to reverse transactions on the blockchain decreases. the factors described above make the blockchain very secure. they prevent users from printing and using coins they didn’t win or spending twice on the same jackpot.happy bitcoin’s 13th birthday bitcoin has reached a new spot price of $66,974.77 per btc, an all-time high . on october 20, 2021 as usa uu. sec approved the launch of proshares bitcoin etf. citi commented that bitcoin could be the currency for international trade. PayPal and Tesla have invested in cryptocurrencies earlier this year. Bitcoin’s growing popularity is expected to continue to skyrocket as bitcoin users grow globally.
we are betting that btc will continue to thrive in the cryptocurrency industry. our wish is that you join btcc and celebrate the successes of btc with us. You can put your trading skills to the test with our free demo trading account to get started. We also encourage you to stay on top of bitcoin trends through our social media platforms and official website so you never miss out on the wonderful trading opportunities and benefits that BTC has to offer. happy 13th bitcoin birthday!
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