Simultaneously shrouded in intrigue and mystery, Bitcoin, as young as it is, is the thing of legends. As people all over the world try to use the cryptocurrency to earn money in ways that were never before possible, it has become an everyday part of pop culture and has made a legitimate impact on the financial world. But how did Bitcoin begin? Its origins are just as interesting as how it has become a mainstay in international financial culture.
The Beginnings
The domain name bitcoin.org was registered on August 18, 2018. At this point, it was clear there were plans for something, but thousands of new domains are registered every day, so even the most curious wouldn’t have been able to predict the next few steps. A cryptography mailing list published a link to a paper called A Peer-to-Peer Electronic Cash System. The paper outlined a whole new way of making and utilizing money. It would be based on something real and tangible instead of being backed by supposed piles of gold bullion that certainly do not multiply as quickly as the bills that they are supposed to support. The author: Satoshi Nakamoto. The age, gender, and even knowledge as to whether Nakamoto was a person or group of persons was unknown. He had apparently stood on the shoulders of some early cryptocurrency players such as B-Money and Bit Gold, but he was about to do things a whole different way.
The Birth of the Bitcoin Network
The first block of Bitcoin was mined by Satoshi Nakamoto himself, and with that, he earned 50 Bitcoins. But the block represented far more than just a new form of currency. It made an in-your-face statement to the rest of the financial system. Embedded in the coin base of this original block were the following words, inspired by a headline of The Times: “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.”
Why the Message Mattered
In the wake of the world financial crisis, people were left reeling and confused. Something that many had never seen had been happening all over the world: Banks were closing. This was one problem Bitcoin realized needed a solution. Most people have never stopped to think about what a bank actually is. It’s a business that makes its money by letting the rest of us borrow money. As the bank gets money from our savings and checking accounts, it lends it out to other people so they can buy houses, start businesses or purchase things on credit. Bitcoin saw a problem that many had to learn the hard way: If all of these people pay the bank back and on time, everything runs just fine. But if they don’t, the bank can’t make enough money to stay open. Then, if people get scared the bank won’t be around, they are going to go to the bank to get their money out of their accounts. That money may not even be there. Bitcoin decided to present itself as a solution to what it saw as a failing system. In case there was any doubt of Nakamoto’s intentions, the inclusion of the Times heading confirmed the mission.
Is Bitcoin Really the Solution?
The future of Bitcoin will depend largely on how universally it is adapted. No matter how cool something is, if it slips into obscurity, no one will care, and it will fade into the story books. However, because Bitcoin is based on a truly diminishing asset, it will never suffer the steady devaluation other currencies suffer from. If the system of taking and processing Bitcoin payments gets more streamlined and more widely accepted, it could indeed become a legitimate substitute for paper money. Who knows? One day your “wallet” could be just a microchip filled with invisible Satoshis. Mr./Ms./The Collective Nakamoto certainly hopes so.