Story of Bitcoin (History of First Cryptocurrency)

Bitcoin is decentralized digital money and is protected by encryption. It was first introduced in January 2009. 

A pseudonymous individual known as Satoshi Nakamoto presented the concept of bitcoin to the world on October 31, 2008, during the height of the financial crisis. 

Nakamoto wrote on a cryptography mailing list - “Bitcoin P2P e-cash document,”. He also linked a white paper titled “Bitcoin: A Peer-to-Peer Electronic Cash System” in the email.

Nakamoto outlined the notion of bitcoin as a decentralized, digital currency in these writings. Decentralization means that instead of having a single administrator, there is a public ledger of transactions that anybody can record on their computer.

Satoshi sent part of the bitcoin to be mined to other people without a doubt. Satoshi made the first transaction on January 12, 2009, when he wired 10 BTC to Hal Finney, who is now deceased. Finney received the 10 bitcoin one day after his now-famous tweet, which stated, “Running bitcoin.”

The identity of the person or people who developed the technique is anonymous. Bitcoin, unlike government-issued currencies, promises lower transaction fees and is controlled by a decentralized authority. 

How Bitcoin Works?

The bitcoin system consists of a network of computers (also known as “nodes” or “miners”) that execute bitcoin’s code and store its blockchain.

The blockchain officially started when the first block, known as the genesis block, was mined on January 3, 2009. The first test transaction happened a week after that.

Each block contains a set of transactions. Nobody can deceive the system because any computer running the blockchain has the same list of blocks and transactions and can see these new blocks filled with recent bitcoin transactions in real-time.

These transactions would be tracked using blockchain, a ledger similar to those used by financial institutions, except that it would be distributed throughout an entire network, with exact duplicates kept by all participants and visible to all, and it would be safeguarded by cryptographic means. There will never be a total of more than 21 million bitcoin in circulation.

The smallest unit of bitcoin is known as a Satoshi, and it is divisible to eight decimal places (100 millionths of a bitcoin). If necessary and if the participating miners accept the change, bitcoin may someday be made divisible to even more decimal places.

Bitcoin is protected by encryption, and it is classified as a crypto asset. Bitcoin is one of the earliest digital currencies to use Peer-to-Peer (P2P) technology to allow immediate transactions.

Earlier Bitcoin Users:

On May 22, 2010, a Florida man bought two $25 Papa John’s pizzas delivered for 10,000 bitcoin. This purchase was the first economic transaction that took place. The first real-world price or value of bitcoin was set at four bitcoin per penny due to this transaction.

The earliest Bitcoin transactions were ‘negotiated’ on online forums, with people trading assets and services for bitcoin. Then, starting in 2011, miners and coders began to build additional networks, such as Ethereum and Litecoin, and modify the code behind bitcoin’s blockchain, adapting it for other uses.

Nick Szabo is a law scholar as well as a computer engineer. In a 1996 paper, he is credited with being the first to propose the idea of smart contracts. He proposed Bit Gold, a forerunner to bitcoin, as a decentralised currency in 2008.

Dorian Nakamoto was named as the currency’s founder by Newsweek in March 2014. The article’s publishing caused a stir in the crypto and tech communities because it was the first time a mainstream journal attempted to uncover the identity of bitcoin’s founder.

The purpose of Nakamoto’s crypto asset was to take control of cash away from banking elites and place it in the hands of ordinary people. When Satoshi Nakamoto handed over ten bitcoin to Hal Finney, a well-known developer who had downloaded the bitcoin software on the day it was released, it was recorded as the first transaction.

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