Posted On 15.10.2018
Bitcoin was first described in a 9-page research paper double bitcoin online in 2008 under the pseudonym Satoshi Nakamoto. This is the first page of Nakamoto’s 2008 paper.
Click on it to download the full paper. How many people do you know who have expertise in financial economics and network engineering and cryptography? And this is the primary reason why, until today, bitcoin has remained difficult to understand for most of us. If you’re feeling lost, you are not the only one! That’s why we created this bitcoin crash course. If you want to learn more about particular aspects of bitcoin, you can click the hyperlinks throughout the text and consult the supplementary materials listed at the end of each section.
You can get a solid overview of bitcoin in one hour without doing any of this. The 2008 bitcoin paper essentially describes a software system enabling people to conduct secure peer-to-peer online transactions without relying on banks or payment companies. While bitcoin did start as a paper in 2008, by 2009, Satoshi Nakamoto had already published 30,000 lines of software code to make the paper’s ideas come true. 2011, it is an international team of developers who regularly upgrade the bitcoin software used by all the stakeholders in the ecosystem.
Bitcoin fundamentally transformed the way value can be stored and exchanged. 65 billion as of August 2017. It should be noted that Nakamoto’s 2008 paper did not come out of the blue. While bitcoin is the first decentralized cryptocurrency ever implemented, several aspects of the bitcoin project have their roots in research conducted in the 1980s-90s. Several companies attempted to create e-currency systems in the 1990s—none of them in a decentralized way—and all of them failed. Cypherpunks are best described as an online social movement regrouping, since the late 1980s, several hundreds of libertarians and anarchists advocating for the widespread use of cryptography to protect individuals’ privacy and liberty against government and corporate interference.
Like bitcoin, Julian Assange’s Wikileaks also has its roots in the cypherpunk movement. This is one of those rare moments in history where a social scientist actually makes an accurate prediction about some significant aspect of the future! Bitcoin is to blockchain, what email is to the Internet. To date, the most basic and prominent application of bitcoin has been its use as a secure decentralized payment system.
But here’s the thing: nothing prevents the technology underlying bitcoin from being used in applications other than payments. To understand how, we need to get a good grasp of the bitcoin technology. We now begin to understand how bitcoin works under the hood, and how its features offer a distinctive take on the notions of trust and ownership, with potentially far-reaching implications. Cryptographic hashing is a mathematical calculation used to secure, compress, store and retrieve data in the blockchain. In particular, it is used to create hash pointers that connect each block to the previous one, all the way back to the first block ever generated in 2009 by Nakamoto. A peer-to-peer network that connects all the bitcoin users and relies on a shared protocol. It allows anyone to broadcast new transactions to the rest of the network and have them verified, executed, and added to the blockchain.
Though not hierarchical, the bitcoin network has different types of users. Miners group transactions into blocks added to the blockchain. Miners verify each broadcasted transaction by checking its digital signature and making sure it corresponds to the actual owner of the bitcoin. Scripts are instructions given to a computer.