The 13th birthday of the Bitcoin (BTC) white paper has arrived just as the world continues to grapple with a global pandemic, inflation fears, a staggering trend into the memecoin mania, and the growing institutional adoption of the cryptocurrency space.
On October 31, 2008, Satoshi Nakamoto posted the Bitcoin white paper on a crypto mailing list hosted on Metzdow. Metzdow’s mailing list was run by a group of cypherpunks and was packed with ideas aimed at creating a form of digital currency – some of them have even been cited in the Bitcoin white paper.
Satoshi’s white paper appeared in a message titled “Bitcoin P2P e-cash paper”, in which Nakamoto explained that its digital currency is fully peer-to-peer (P2P) or peer-to-peer, and does not require a trusted third party for a transaction to take place.. Through a peer-to-peer network, Bitcoin solved the problem of double spending. Bitcoin also allowed network participants to remain anonymous and was secured using a proof-of-work (PoW) consensus algorithm.
At the time, the white paper was not received in the way that people would expect, knowing what they know today. Only a few people saw Nakamoto’s email and responded with their thoughts and concerns around Bitcoin..
Speaking to Cointelegraph, Leo Matchett, co-founder and CEO of Decentralized Pictures, a non-profit organization that supports independent filmmakers, said that the Bitcoin white paper “is the genesis of a new era in monetary sovereignty”, and added: “Satoshi stood on the shoulders of giants and solved problems that those who came before could not“.
Matchett further opined that the white paper “was truly the beginning of a new era for the world’s monetary systems” because “it contributed the idea that decentralization has more value than centralization”. In fact, the Bitcoin idea was trying to solve numerous problems, such as counterfeiting, complicated gateways, and counterparty risk.
Running Bitcoin
After the white paper was shared on the crypto mailing list, slowly but surely, the discussion around the document began to grow, and the Bitcoin network went live in early 2009. At the time, Hal Finney, a cypherpunk who worked with the PGP Corporation developing leading encryption products, was already involved.
Hal finney is well known in the cryptocurrency space for having participated in the first Bitcoin transaction and by be the first person, after Nakamoto, to run a copy of the network through a node. After getting it up and running, Finney tweeted that he was “running bitcoin.”
Running bitcoin
– halfin (@halfin) January 11, 2009
The cypherpunk, who tragically passed away in 2014 as a result of complications from amyotrophic lateral sclerosis (ALS) and whose body was cryopreserved by the Alcor Life Extension Foundation, described his work with Satoshi in a forum post in which he revealed that he started mining BTC at “block 70-something”, and that, after some correspondence, Satoshi sent him 10 BTC to test if the network worked.
At that time, there was no demand for space on the blockchain, so the transaction was successfully processed with an attached fee of 0 BTC. The 10 BTCs were worthless at the time, but the transaction helped fix some glitches 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 he is today, it was a first step in the right direction. A year later, in 2010, the first commercial Bitcoin transaction would occur.
More than 600 million dollars 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 for the coins if they could get him two large pizzas, which could even be homemade.
The post was met with skepticism, as 10,000 BTC at the time was not worth what two pizzas cost, far from it. Only on May 22, following a follow-up, Hanyecz reported that he had “successfully exchanged 10,000 bitcoins for pizza”.
At that time, and despite the low value of Bitcoin and the small size of the community, one user noted that a “great milestone” had been reached. That day is now known in the crypto community as “Bitcoin Pizza Day.”.
Bitcoin’s first commercial transaction led to the creation of an ecosystem that is now worth more than $ 2 trillion and demonstrated that Bitcoin has a number of use cases that need to be considered.. For the first time, Bitcoin was used as a true medium of exchange.
A multi-trillion dollar industry
The price of the cryptocurrency would rise over timepartly because of adoption and partly because of speculators looking to profit from its incredible volatility. In the midst of all that, new businesses were created in what turned out to be 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 flurry of change unleashed by the publication of a 9-page PDF“.
The Bitcoin white paperGrčar said, presented the vision of a digital currency that can be used as a store of value and a means of exchange independent of centralized control. In his words, the potential it has has not been fully unleashed:
“It turned out to be a breakthrough of such historical significance and magnitude that, even thirteen years later, we are barely scratching the surface.”
Bitcoin, said, promoted a “paradigm shift that now underpins a multi-trillion dollar industry” and showed the world that there was a better way that “sovereignty, finances and individual freedoms coexist outside the clutches of corrupt and outdated socio-economic systems, riddled with insiders, cronies, and backroom deals“.
As understood from the first Bitcoin trading transaction, the value of BTC has not always been clear. The cryptocurrency has suffered major drops in its history and has been declared “dead” more than 400 times by popular media and analysts.
Bitcoin’s market capitalization now exceeds $ 1.16 trillion, according to Cointelegraph Markets Pro. Although most wish they had heard of cryptocurrency in 2010 or 2011 in order to invest in it and build wealth through that investment, most probably would not have seen how big BTC would become.
Greg Schoen, one of the first investors in Bitcoin, published in May 2011, a now famous tweet in which he showed his regret for having sold 1,700 BTC at $ 0.30, having obtained them when the cryptocurrency was trading at $ 0.06, as it could have sold its coins for $ 8 each. As one BTC is now trading above $ 61,000, its 1,700 BTC would now be worth more than $ 104 million. A shame.
I wish I had kept my 1,700 BTC @ $ 0.06 instead of selling them at $ 0.30, now that they’re $ 8.00! #bitcoin
– Greg Schoen (@GregSchoen) May 16, 2011
Bitcoin’s rise has been supported by a thriving industry full of innovation who has already seen cryptocurrency exchanges go public on the Nasdaq exchange and by institutional investors They recognize that BTC can be used to diversify their portfolios and hedge against inflation.
Earlier this year, El Salvador became the first country in the world to adopt Bitcoin as legal tender., with the official entry into force of the Bitcoin Law on September 7. Salvadorans can use cryptocurrency via a government-launched wallet called Chivo that uses the Lightning Network, a layer two scaling solution.
Speaking to Cointelegraph, Javier Moro, head of product at Latin American crypto exchange Bitso, noted that El Salvador’s move was “rooted in hope for a better future for Salvadorans,” and its success will depend on the spread of cryptocurrency-related knowledge in the country.
The best is yet to come
In a statement sent to Cointelegraph, Ron Levy, CEO and co-founder of blockchain consultancy The Crypto Company, stated that the Bitcoin white paper “laid the foundation for what would become a decentralized industry beyond what anyone thought possible”.
The next jump in this space, said, are “clear laws and regulations around what can and cannot be done with cryptocurrencyBut, obviously, it is not clear how that can turn out, since all new technological advances face resistance from established mechanisms.
Brittany Laughlin, CEO of the Stacks Foundation, which bridges the gap between decentralized finance (DeFi) and the Bitcoin network, told Cointelegraph that Bitcoin has come a long way from being just a store of value as “it is now possible to build smart contracts on Bitcoin, welcoming the millions of BTC holders to the world of DeFi, NFT and true ownership.“.
In particular, Satoshi Nakamoto seems to have predicted that other blockchains could use tokens, which they once called “domain objects,” to represent ownership of assets.. Satoshi’s example was a token that represented the right to own a domain for one year.
Finney: “Satoshi, are you endorsing the idea that additional block chains would each create their own flavor of coins, which would trade with bitcoins on exchanges?”
Satoshi: “Right … domain objects (domaincoins?) Could represent the right to own a domain for a year.” pic.twitter.com/ZZBUwV65pS
– Balaji Srinivasan (@balajis) July 2, 2021
Finney: “Satoshi, do you approve of the idea that additional blockchains would each create their own kind of coins, trading bitcoins on exchanges?”
Satoshi: “Right … domain objects (domaincoins?) Could represent the right to own a domain for one year.”
As Grčar said, humanity has only begun to scratch the surface of what bitcoin and blockchain technology are capable of. So much so, that the developments we have today seem to have been thought of by the creator of Bitcoin, Satoshi Nakamoto.
The Bitcoin white paper has made the idea of a decentralized network viable And it has shown that even a short nine-page document has been capable of changing the world in such radical ways that it can be difficult to understand even at this point.
Although it is unclear if more countries will adopt BTC as legal tender in the future, or if interest in Bitcoin ETFs will decline, it seems clear that Bitcoin is here to stay and serve as a store of value and medium of exchange, and that’s only 13 years after the idea was first introduced. Imagine what will happen in the next 13 years.
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