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The birth of Bitcoin
2020-11-20 10:46

Weeks after the US government authorized a $700 billion bailout. On October 31st in 2008, a person or a group of persons (Satoshi Nakamoto)[1] anonymously posted a technical whitepaper to the internet outlining a new digital payment system called Bitcoin. The presumed pseudonymous Satoshi Nakamoto, when creating the Bitcoin network, integrated many existing ideas from the cyberpunk community, which is a group of privacy activists that tries to challenge mass surveillance and abusing public power.

There are two points worth mentioning in the Bitcoin whitepaper. Firstly, the author(s) chose to use a pseudonym. The identity of Satoshi Nakamoto is still a mystery that people pay close attention to. Secondly, the paper introduced something that has never existed before. A digital currency that does not rely on a central authority.

A few months later, Satoshi Nakamoto launched the Bitcoin network with a text written into the first Bitcoin ledger that said:


The Times 03/Jan/2009 Chancellor on brink of second bailout for banks


This was a headline that appeared in the Times, a famous British newspaper on January 3, 2009. Satoshi Nakamoto's message to the world was that the existing system that kept bailing out banks at the expense of its people was corrupt and Bitcoin's decentralized financial technology was a way out.

One must understand the concept of scarcity to understand the scientific innovation that supports the success of Bitcoin.

There are two types of scarcity in the world of physics. One of them is man-made, collectibles such as limited-edition Chanel handbags, Michael Jordan basketball cards, rare vintages or numbered works of art by specific artists, which can be considered as centralized scarcity.

The other one is natural scarcity, including salt (where the word “salary” was coined from), glass beads from Ghana, shells from Native American culture, silver from China, and of course gold from all over the world. These are examples of decentralized scarcity, which is difficult to forge.

In Bitcoin networks, a new Bitcoin is produced through global competition, and participants in Bitcoin mining need to work out the rare numbers, just like primes, which makes the decentralized scarcity in the digital field possible and explains why Satoshi Nakamoto's creation is so profound. Every asset before Bitcoin is either completely centralized (golden coins in World of Warcraft), physical (silver), or infinitely rich (MP3). There were no decentralized, digital and scarce assets before Bitcoin.


[1]: Who is Satoshi Nakamoto?


Satoshi Nakamoto is the anonymous creator(s) of Bitcoin and Bitcoin network.

In the early two years of Bitcoin, Satoshi Nakamoto was an active participant in this community who often published ideas that were associated with Bitcoin technology and its social impact and contributed to its software development. Satoshi Nakamoto disappeared at the end of 2010.

Satoshi Nakamoto possesses hundreds of millions of dollars ‘worth of bitcoins that anyone can see on the blockchain. These bitcoins have never been moved and may have been lost permanently. By the time of this writing, the identity of Satoshi Nakamoto has not yet been revealed, which makes it one of the biggest mysteries of the 21st century.

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