Bitcoin is a digital currency that was created in January 2009. It follows the idea set out in a whitepaper by the mysterious and pseudonymous Satoshi Nakamoto. Bitcoin offers the promise of lower transaction fees than traditional online payment mechanisms and unlike government issued currencies, it is operated by a decentralized authority.
Here are key things to know about the origin of bitcoin:
- Bitcoin Founder
Satoshi Nakamoto is the name associated with the person or group of people who released the original bitcoin whitepaper in 2008 and worked with the original bitcoin software that was released in 2009. However, no one is certain about who invented Bitcoin.
Since 2009, a lot of people have come up with claims that they are the people behind the pseudonym, but as of January 2021, the true identity behind Satoshi remains hidden.
- Bitcoin is a Decentralized Digital Currency
Bitcoin is without a central bank or single administrator. It is wholly a decentralized banking system where digital currency can be sent from user to user on the peer-to-peer bitcoin network without the need for intermediaries. These transactions are then verified by network nodes through cryptography and recorded in a public distributed ledger called a blockchain.
- Domain Name
The recognized domain name for Bitcoin is ‘bitcoin.org’ and it was registered on 18 August 2008, a link to a paper authored by Satoshi Nakamoto titled “Bitcoin: A Peer-to-Peer Electronic Cash System” was posted to a cryptography mailing list. Nakamoto implemented the bitcoin software as open -source code and released it in January 2009.
On 3 January 2009, the Bitcoin network was created when Nakamoto mined the starting block of the chain, known as the genesis block. The first bitcoin transaction receiver was Hal Finney, who had created the first reusable proof-of-work system in 2004. Finney downloaded the bitcoin software on its release date, and on 12th January 2020 received bitcoins from Nakamoto. Other early supporters at the creation of Bitcoin were: Wei Dai, creator of b-money, and Nick Szabo, creator of bit gold. In 2010, the first known commercial transaction using Bitcoin occurred when programmer Laszlo Hanyecz bought two Papa John’s pizzas for 10,000 Bitcoins.
- Design/ Units and Divisibility
Bitcoin is based on an elliptic curve called “secp256k1” and encrypted with the ECDSA algorithm. The equation for the Bitcoin secp256k1 curve is y2=x3+7. Bitcoin has a proposed Bitcoin improvement proposal (BIP) that would add support for Schnorr signatures. The units of the account of the Bitcoin system is 1 Bitcoin. Ticker symbols used to represent bitcoin are XBT and BTC. Small amounts of Bitcoin used as alternative units are millibitcoin (mBTC), and satoshi (sat). named in homage to bitcoin’s creator, a satoshi is the smallest amount within bitcoin, one hundred million of a bitcoin. A millibitcoin equals 1/1000 bitcoins; one thousand of a bitcoin or 100,000 satoshis.