Who Created Bitcoin and Why?
On October 31, 2008, a cryptic paper was posted on the internet. It was written by someone using the alias Satoshi Nakamoto and titled Bitcoin: A Peer-to-Peer Electronic Cash System . Over the next five years, Satoshi worked with other developers to refine and expand the concept behind Bitcoin until it was released as open source software in 2009 and Nakamoto stopped contributing code to the project in 2010.
The History of Cryptocurrency
Cryptocurrency is a digital or virtual asset designed to work as a medium of exchange. Cryptocurrencies are decentralized, meaning they are not subject to government or financial institution control. The first cryptocurrency, Bitcoin, was created in 2009 by an anonymous person or group of people using the pseudonym Satoshi Nakamoto. The purpose of Bitcoin was to create a decentralized, peer-to-peer electronic cash system that could be used without the need for a third party, such as a bank or government. Today, there are thousands of different cryptocurrencies with various purposes and functions. These include Ethereum, Litecoin, Dashcoin, IOTA, Monero and more.
One reason for the explosion of cryptocurrencies may be due to the 2008 economic crisis. Many people were distrustful of central banks after watching their investments lose value when their banks failed or were bailed out by governments at taxpayer expense. In this way, many cryptocurrencies can be seen as functioning like gold: Just like gold bars are scarce and cannot be inflated through mining new gold deposits over time (as all deposits would eventually run out), so too do bitcoins have a fixed supply (only 21 million bitcoins will ever exist). That makes them potentially valuable long term stores of value if faith in fiat currencies continues to wane because it provides alternative places where savers can keep their wealth safe from inflation risk.
Satoshi Nakamoto
The creator of Bitcoin is Satoshi Nakamoto, though it is unclear if this is a pseudonym or an actual person. Nakamoto's goals for creating Bitcoin were to create a decentralized currency that could be used without government intervention. The first Bitcoin was created in 2009 and the current supply is 21 million. Nakamoto is estimated to own around 1 million Bitcoins, worth over $10 billion at today's prices. While the identity of Satoshi Nakamoto remains a mystery, we can be grateful for the creation of Bitcoin. In January 2009, when Satoshi mined the first block of 50 bitcoins and solved his proof-of-work puzzle, he ushered in a new era for money. A world where people are not controlled by banks and governments but are able to take back control over their financial lives with cryptocurrency transactions. Cryptocurrency also presents exciting opportunities for ecommerce retailers who want to expand into international markets. If you want your customers from Brazil, India, China or any other country to pay you in crypto instead of USD then BitPay will help you accept bitcoin and other digital currencies as payment methods for your business.
Hal Finney
The first real-world transaction was conducted between two people, namely Satoshi Nakamoto and Hal Finney. Satoshi Nakamoto is the creator of Bitcoin while Hal Finney was the first person to ever receive a Bitcoin transaction. The story goes that Finney was working on a cryptographic proof-of-work system that could be used to timestamp documents so that it would be impossible to backdate them or tamper with them. Nakamoto apparently saw the potential in this system and decided to use it as the basis for a new form of currency. Finney was then given the first ever bitcoin transaction, which he promptly sent back to Nakamoto. The idea behind this was to demonstrate how both parties needed some sort of real world identities to keep track of who owned what Bitcoins. Once Finney had completed his work, he asked if he should give away his bitcoins now since there wasn’t much left for him to do with them. He suggested having 10 BTC go to developer Mike Hearn, 10 BTC go to Gavin Andresen (a developer from Canada), and have the rest distributed among various cryptography researchers that had helped out along the way by sending donations and support in terms of feedback or advice. Nakamoto agreed but then soon disappeared from public view, never returning any more emails from either Hearn or Andresen about his plans for Bitcoin - whether they were good ones or bad ones! The next year, though, Nakamoto did make one last post in 2010 announcing that Bitcoin version 0.3 was released. He also said goodbye to everyone before signing off for the last time.
In 2011, another programmer called Ross Ulbricht released a Silk Road website where you could buy drugs anonymously using bitcoins. That same year, Gawker published an interview with Ulbricht under the pseudonym Dread Pirate Roberts. In October 2013 police arrested Ulbricht at a library near San Francisco when FBI agents seized his laptop running Silk Road's server software.
A few years later, another big news event happened when Mt Gox collapsed following theft worth $473 million making it one of the biggest financial cybercrimes ever comitte against a single institution.
Nick Szabo
In the early 1990s, Nick Szabo – a computer scientist, lawyer, and historian – realized that the decentralized ledger could be used for more than just money. He created a system called Bit Gold, which was similar to Bitcoin but never gained traction. In 2008, Satoshi Nakamoto – an anonymous person or group – released a white paper outlining the Bitcoin protocol. It's unclear if Nakamoto was aware of Szabo's work. Other likely possibilities are Wei Dai, Hal Finney, or even both working together. Finney communicated with Szabo in 2000 about his own idea for a new form of electronic cash. The source code that is now considered as the foundation of Bitcoin was published in 2009 on SourceForge under a pseudonym and some speculate that this is when Nakamoto started his project. The most popular explanation is that the first bitcoin came from mining. As cryptocurrencies gained popularity, people were able to use their computers to mine bitcoins by verifying transactions. Mining requires solving difficult math problems and then adding them to the blockchain so they can be verified by other miners - all without having any control over who mines them or what numbers get generated.
Szabo had imagined a similar scenario back in 1997: I proposed a system whereby I would take money from people using one hand while giving it out from the other, he says - in exchange for labor. The system is designed so that the amount of credit needed to get money out eventually exceeds the amount of credit available, thus preventing inflation.
In order to obtain bitcoins today, you have two options: either buy them through an online currency exchange like Coinbase or alternatively, you can use your computer’s CPU power (or GPU) to process transactions for a reward (this is called mining). Miners verify these transactions, add them to the blockchain, and earn blocks of bitcoins as a reward. People who choose to mine typically join pools with other miners for security reasons. These pools share any newly mined coins among its members based on how much processing power each miner has contributed. There are also plenty of cloud-mining services that allow users to purchase computing power from someone else remotely. If you want in on the action but don't want any hassle, this is an easy way to go!
Phil Zimmermann
In the early 1990s, Phil Zimmermann was working on Pretty Good Privacy (PGP), an email encryption software program. PGP was designed to allow people to communicate securely, without anyone being able to read their messages. In order to create PGP, Zimmermann had to find a way to make it impossible for anyone to trace who was sending what message. He eventually came up with a solution called public key cryptography, which is now used in many different security systems. Public key cryptography uses two keys: a public key, which anyone can use to encrypt a message, and a private key, which only the recipient can use to decrypt the message. When someone sends a secure message using PGP, they send the encrypted version of the message using the recipient’s public key. The person receiving the message then uses their private key to decrypt it. Because no one but them has access to their private key, they are assured that only they will be able to open and read it. With his new invention, Zimmerman wanted to solve any potential problems before he released his product into the world—and so he posted his software online for others to download before its official release date. But some people were not so kind about respecting Zimmerman’s wishes when downloading his work-in-progress product and soon enough some copies of his unfinished product began circulating around cyberspace where anyone could get hold of them. To protect his idea from prying eyes, Zimmerman decided to take matters into his own hands and publish PGP ahead of schedule. His effort paid off - because after just one year PGP was considered by experts as the most sophisticated form of encryption available anywhere in the world. Today, virtually all internet traffic - including emails, banking transactions, and social media data - is protected by this technology. As of 2019, more than 100 million people use PGP to keep their information safe and sound.
Adam Back
In 2008, the world was in the midst of a financial crisis. Banks were failing, stock markets were crashing, and people were losing their homes. Into this chaos came Satoshi Nakamoto, the creator of Bitcoin. Satoshi's vision was to create a new form of money that was not subject to the whims of governments or banks. And so, Bitcoin was born. Satoshi was able to produce this revolutionary system for one reason: He had access to large amounts of computing power, either from his own computer cluster or from those rented through his company CloudHashing. His identity is still unknown, but there are two likely possibilities.
A) The first is that he is someone very smart who wanted to keep his identity secret because he knew the implications of creating a digital currency which could be widely adopted as an alternative to government-issued currencies like the US dollar and Euro.
B) The second possibility is that he is in fact dead and yet another person has taken over his account on behalf of himself or others with whom they workwork . What we do know is that whoever created Bitcoin did it in order to solve the problem of inflation, which occurs when governments print more and more money each year. As more coins enter circulation, prices increase because there are fewer coins left to buy goods with. For example, if a country printed 100 units of its currency today, prices would quickly inflate as demand would increase while supply stayed constant. Eventually you end up with hyperinflation where people need wads of cash just to buy bread or eggs at inflated prices.
The problem bitcoin solves is how to limit the number of bitcoins in circulation without having any central entity decide how many should exist at any given time. To understand this requires a bit of explanation about public key cryptography. Most cryptocurrencies rely on public key cryptography, also known as asymmetric encryption. Public key cryptography works by using two keys; one private and one public. If I want to send you some encrypted data - say my credit card information - I will use my private key to encrypt the data, then use your public key (which anyone can get from a directory service) to decrypt it for you.
Shigeru Miyamoto
The creator of Bitcoin is still a mystery. Some people believe that Satoshi Nakamoto, the pseudonym used by the person or persons who created Bitcoin, is a man named Shigeru Miyamoto. Miyamoto is a Japanese computer scientist and businessman who has been involved in the development of some of the most popular video games ever made, including Super Mario Bros. and The Legend of Zelda. While there's no concrete evidence that Miyamoto is the creator of Bitcoin, many people believe that he is because of his involvement in early versions of the Bitcoin code. He also had access to a PGP key believed to be owned by Satoshi Nakamoto. Furthermore, his profile was among those affected when Mt. Gox was hacked in 2011. However, others argue that the alleged connection between him and Bitcoin is false due to lack of any direct ties between him and any version of the bitcoin software released under his name. Regardless of whether or not it's true, Miyamoto continues to work on projects related to virtual reality and artificial intelligence. He also won't reveal any information about the identity of Bitcoin's founder. I've never tried to figure out who he is, said Miyamoto. I think he doesn't want to be found.
Timothy C. May
In the early days of cryptocurrency, one man was particularly vocal about his beliefs. His name was Timothy C. May, and he was a cypherpunk. Cypherpunks were activists who advocated for the use of cryptography as a way to achieve social and political change. May was particularly interested in the idea of using cryptography to create a system that would be resistant to government control. In 1992, he wrote a paper called The Crypto Anarchist Manifesto in which he outlined his vision for a completely decentralized digital currency. This paper is widely considered to be one of the earliest pieces of writing on the subject of cryptocurrency. It's also been theorized that May might have been Satoshi Nakamoto, but there is no hard evidence to support this claim. There are many other contenders, but there has never been any definitive proof as to who created bitcoin. Many individuals across the world argue that they're responsible, or at least hold some stake in its creation. For example, it's said that Nick Szabo coined the term smart contracts and had a hand in designing bitcoin. However, Szabo denies being involved with it at all.
The mystery surrounding bitcoin continues to fascinate people around the world. After all these years, nobody can say for sure who made it - or why they did so - with certainty.
David Chaum
A computer scientist and cryptographer, David Chaum is credited with creating the first digital currency. In 1983, he published a paper called Blind Signatures for Untraceable Payments which detailed how to create a digital cash system. While Chaum's system was never implemented, it did lay the groundwork for future digital currencies. In 2005, Chaum launched eCash Technologies, Inc. with the goal of developing a digital cash system that could be used by both businesses and individuals. However, eCash was unable to gain traction and shut down in 2011. By that time, Chaum had started another company, DigiCash Corporation. DigiCash was the first company to sell email software where users paid money using digital tokens over public networks like the Internet or telephone lines. In 1998, when other companies were starting to catch on to this idea, DigiCash filed for bankruptcy and dissolved three years later. Shortly after, Chaum left the world of cryptocurrency. He now teaches at Stanford University.
John Nash
In 2008, a man named Satoshi Nakamoto published a white paper entitled Bitcoin: A Peer-to-Peer Electronic Cash System. In it, he laid out a plan for a decentralized digital currency that could be used to buy and sell goods and services without the need for a third party, like a bank. Nakamoto's idea was to create a system where transactions could be verified by network nodes through cryptography, and then recorded in a public ledger, called a blockchain. The first ever bitcoin was created as part of the mining process in 2009. Since then, the creation of new bitcoins has been slowly decreadecreasingsing, until it will eventually stop altogether. Nakamoto's identity remains unknown, though many have tried to unmask him over the years. An Australian academic who is said to have debunked the claim about Nakamoto being Japanese, believes that he is American. He noted that his use of British spelling conventions and capitalization rules for Bitcoin are not typical for Japanese people. Other reports suggest that he is from Ireland or Great Britain based on time stamps on his posts during development of bitcoin. It would seem plausible that this genius with such an invention would want their true identity kept private; so while we may never know who they are, we can be thankful they were able to come up with such an ingenious way to change how we use money forever!
There have been other attempts at creating digital currencies in recent history. Some of these systems used peer-to-peer technology, but none caught on due to things like a lack of value, failure of security features or insufficient interest among users. However, Satoshi Nakamoto’s technology was designed so that bitcoins would make sense both as a reward for performing work—the familiar operation known as mining—and also serve another purpose entirely: The root problem with conventional currency is all the trust that’s required to make it work, he wrote in his original white paper on bitcoin. The central bank must be trusted not to debase the currency. That meant there had to be some substance behind its value. So why not back it with something intrinsically valuable instead? Gold, silver, and copper soon made sense. But what backing could there be for a global currency? Commodities were too scarce to support trade among billions of people around the world. After thinking long and hard about it, Nakamoto came up with an elegant solution: Trade, after all, requires nothing more than mutual consent between two parties who agree on a price. By using math alone to protect each transaction—basically scrambling information into impenetrable code—he figured out how to create digital tokens that are generated independently of any authority whatsoever and traded freely around the world according to supply and demand.
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