13 years since the Bitcoin whitepaper: The journey so far

The 13th anniversary of the Bitcoin (BTC) white paper comes as the world continues to grapple with a global pandemic, inflation fears, an alarming meme token craze and growing institutional adoption in the cryptocurrency space.

On October 31, 2008, Satoshi Nakamoto published a paper entitled "Bitcoin: A Peer-to-Peer Electronic Cash System" in the cryptography mail of the "metzdowd.com" website, in which Satoshi Nakamoto explained , his digital currency is completely peer-to-peer (P2P) and does not require a trusted third party to conduct transactions. Through a peer-to-peer network, Bitcoin solves the problem of double spending. Bitcoin also allows network participants to remain anonymous and is secured through the Proof of Work (PoW) consensus algorithm.

At the time, the white paper was not as well received as one would expect, as they know the situation today. Only a few people saw Satoshi’s emails and responded with their thoughts and concerns about Bitcoin.

In an interview with Cointelegraph, Leo Matchett, co-founder and CEO of Decentralized Pictures, said that the Bitcoin white paper "is the genesis of a new era of monetary sovereignty," adding, "Standing on the shoulders of giants, Satoshi Nakamoto solved the problems of previous generations." unsolvable problem."

Matchett further believes that the white paper is “truly the beginning of a new era for the world’s monetary system” as it “raises the point that decentralization is more valuable than centralization.” In fact, the idea of Bitcoin tries to solve many problems, including counterfeiting and counterparty risk.

run bitcoin

After the white paper was shared on the cryptography mailing list, slowly, discussions around the document began to grow, and the Bitcoin network was launched in early 2009. At the time, cyberpunk Hal Finney, who had worked with PGP on 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 since Satoshi Nakamoto to run a copy of the network through a node. After setting it up, Finney tweeted that he was "running bitcoin."

The cypherpunk, who tragically passed away in 2014 from complications of amyotrophic lateral sclerosis (ALS) and whose body was cryopreserved by the Alcor Life Extension Foundation, described his work with Satoshi Nakamoto in a forum post, He revealed that he started mining BTC on "block 70-something", and after a few letters, Satoshi Nakamoto sent him 10 bitcoins to test whether the network was working.

At the time, there was no demand for this field on the blockchain, so the transaction was successfully processed with a fee of 0 BTC attached. Those 10 BTC were worthless at the time, but the transaction helped fix some of BTC’s early vulnerabilities.

The first bitcoin transaction clearly shows that the network works, and while there is still a lot of work to be done to get to where it is today, it is a first step in the right direction. A year later, in 2010, the first commercial bitcoin transaction took place.

Over $600 million for two pizzas

On May 18, 2010, developer Laszlo Hanyecz posted a post on the Bitcointalk forum offering 10,000 bitcoins "for a few pizzas." Hanyecz offered to pay another forum member these bitcoins if they gave him two large pizzas, which could even be homemade.

The post was met with skepticism because at the time 10,000 BTC wasn't worth the cost of two pizzas, or anywhere near that price. It wasn’t until May 22, after being followed up, that Hanyecz reported that he had “successfully exchanged 10,000 bitcoins for pizza.”

At the time, despite the low value of Bitcoin and the small size of the community, “a great milestone was reached,” one user noted. That day is now known in the cryptocurrency community as "Bitcoin Pizza Day."

The first commercial bitcoin transaction created an ecosystem worth over $2 trillion and proved that bitcoin has many use cases to consider. For the first time ever, Bitcoin is being used as a true medium of exchange.

a trillion dollar industry

The price of Bitcoin will rise over time, partly due to adoption and partly due to speculators looking to profit from its incredible volatility. Through it all, new businesses were created that eventually became a large asset class.

“No one could have predicted the wave of change that would be triggered by the publication of a nine-page PDF document,” Miha Grčar, head of global business development at cryptocurrency exchange Kraken, told Cointelegraph in an interview.

Grčar said the Bitcoin white paper lays out a vision for a digital currency that can serve as a store of value and a medium of exchange independent of central control. According to him, its potential has not been fully realized.

"This is a major breakthrough of historic proportions, and even after 13 years, we've only scratched the surface."

Bitcoin sparked a "paradigm shift that now underpins a multi-trillion dollar industry," he said, and showed the world a better way, "sovereignty, finance, and personal liberty are rife with insiders, cronyism Co-exist outside the clutches of a corrupt and antiquated socio-economic system that deals behind the scenes."

As we learned from the first commercial bitcoin transaction, the value of BTC is not always clear. The cryptocurrency has suffered massive crashes throughout its history and has been declared "dead" by popular media and analysts more than 400 times.

According to data from Cointelegraph Markets Pro, Bitcoin’s market capitalization is now over $1.16 trillion. While most people wish they had heard of Bitcoin in 2010 or 2011 to invest in it and build wealth through that investment, most likely didn't see how big BTC would become.

Early Bitcoin investor Greg Schoen posted a now-famous tweet in May 2011 where he regretted selling 1700 BTC for $0.30 when the cryptocurrency was trading at $0.06 when he could have paid Selling his bitcoins for $8 each. With 1 BTC now trading above $61,000, his 1,700 BTC would now be worth over $104 million. It is indeed a pity.

I wish I kept my 1700 bitcoins at $0.06 instead of selling them at $0.30 and now they are $8.00! #Bitcoin

— Greg Schoen (@GregSchoen) May 16, 2011

Bitcoin's rise has been supported by a thriving industry full of innovations that have seen cryptocurrency exchanges start trading on the Nasdaq exchange, and by institutional investors who recognize that BTC can Used to diversify their portfolio and hedge against inflation.

Earlier this year, El Salvador became the first country in the world to adopt bitcoin as legal tender, with the country’s bitcoin law officially going into effect on Sept. 7. Salvadorans can spend cryptocurrencies through a government-launched wallet called Chivo, which uses the Lightning Network, a second-layer scaling solution.

In an interview with Cointelegraph, Javier Moro, chief product officer of Bitso, a Latin American cryptocurrency exchange, pointed out that El Salvador’s move “is born of hope for a better future for Salvadorans” and its success will depend on the spread of cryptocurrency-related knowledge in the country.

more things haven't happened yet

Earlier in October, the first bitcoin exchange-traded fund (ETF) launched in the United States. The ProShares Bitcoin Strategy ETF began trading on the New York Stock Exchange under the ticker symbol BITO. It debuted as the second-most-traded fund on record.

In a statement sent to Cointelegraph, Ron Levy, CEO and co-founder of blockchain consultancy The Crypto Company, said the Bitcoin whitepaper “lays the groundwork for what will become a decentralized industry in the future, above all others.” imagination".

The next leap in this space, he said, is "clear laws and regulations around what can and cannot be done with cryptocurrencies." However, it is clearly unclear what the likely outcome will be, since all new technological breakthroughs face resistance from established mechanisms.

Brittany Laughlin, executive director of the Stacks Foundation, which connects decentralized finance (DeFi) and the Bitcoin network, told Cointelegraph that Bitcoin has come a long way from being a mere store of value because “intelligence can now be built on top of Bitcoin.” Contracts, welcoming millions of BTC holders into the world of DeFi, NFTs, and true ownership."

As Grčar said, humanity is only just beginning to scratch the surface when it comes to the capabilities of Bitcoin and blockchain technology. So much so that the development we have today seems to have been thought of by Satoshi Nakamoto, the creator of Bitcoin.

The Bitcoin white paper made the idea of a decentralized web feasible and proved that even a short 9-page document can change the world in such a radical way that it may be difficult to comprehend even at this point in time.

While it's unclear whether more countries will adopt BTC as fiat currency in the future, or if interest in Bitcoin ETFs will wane, it seems clear that Bitcoin is here to stay, as a store of value and medium of exchange, and that's just 13 years after the idea was first floated. Imagine what happens in the next 13 years.