Bitcoin is a virtual currency created in 2009 by someone using the alias Satoshi Nakamoto. Bitcoin can be used to buy and sell items, but it also serves as a type of money that only exists on computers. Bitcoin is “tangible” though because if you add up all the individual bitcoins in circulation, they have a market value of over $1 billion U.S. dollars. The creator envisioned Bitcoin being used not just as a payment system for online trading, but also as a means to push forward new ideas about how society could be organised without relying on centralised institutions like banks or governments. You can also click here for further details.
Bitcoin’s Creation
The Bitcoin network was invented by Satoshi Nakomoto, who published a paper on it in 2008 and released the first Bitcoin software in 2009. The original purpose of Bitcoin’s creation was to create “A Peer-to-Peer Electronic Cash System” [1]. This means that while there are some similarities to physical cash, Bitcoin is fundamentally different because it exists purely digitally while remaining anonymous.
Basics of Bitcoin
Satoshi designed Bitcoin so that it would have certain characteristics that would distinguish it from other digital currencies while remaining practical for mass use. These attributes are what can be considered Bitcoin’s purpose. Bitcoin has these features: it is decentralised, with no central point of control; bitcoins are issued and managed without any central authority whatsoever; transactions can take place between users directly, without an intermediary; bitcoins are pseudo-anonymous (while each transaction is recorded publicly, the user’s personal information is not); Bitcoin does not suffer from inflation; Bitcoin is incredibly difficult to tamper with.
Satoshi gave what Bitcoin was meant to be in the Bitcoin white paper: “A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.” This means that Bitcoin was never intended as only a means for buying and selling goods. Bitcoin’s purpose is to allow anyone anywhere in the world to have complete control over their own money.
The Bitcoin Network, being decentralised, has no central point of authority or vulnerability. Bitcoin does not suffer from inflation because the number of bitcoins in circulation will never exceed 21 million. Bitcoin transactions are all transparent on the Blockchain, but unlike other currencies, Bitcoin gives anonymity to users who wish for it. Bitcoin was built so that it would be incredibly difficult to attack or tamper with, and since its inception, it has not been compromised once.
While Bitcoin seems perfect for buying and selling goods, this is actually outside of what Bitcoin was originally envisioned for. This can be best summed up by looking at Satoshi Nakamoto’s BitcoinTalk profile. Before Bitcoin, Satoshi was involved with the development of an online marketplace called “DarkMarket“. This marketplace was meant to increase anonymity for all participating users while providing an easy-to-use interface. Bitcoin’s blockchain is incredibly similar in design and intention to the one used by DarkMarket. Bitcoin is better than any centralised alternative because it is decentralised, transparent, has no central point of failure, cannot be tampered with (even by its inventor), and provides anonymity when needed. Bitcoin’s purpose is to provide people with complete control over their own money without needing permission from anyone else or having to share their personal information.
In 2008, Bitcoin had been introduced as a new decentralised digital currency that uses cryptography to generate units of currency and verify peer-to-peer transactions. Bitcoin’s anonymous creator(s), Satoshi Nakamoto, mentioned Bitcoin in his/her (their) white paper when Bitcoin was announced on October 31st, 2008.
The Bitcoin network came into existence when Satoshi mined the first 50 Bitcoins on January 3rd, 2009; this is referred to as Bitcoin’s Genesis Block. This marks Bitcoin becoming the world’s very first decentralised digital currency!
Why does Bitcoin aim to be decentralised?
Bitcoin aims to be decentralised in order to make it impervious to attack by any person or group attempting to disrupt Bitcoin. An attack could include shutting down servers or applications that Bitcoin relies on to run its operations and transactions.
Another reason Bitcoin is decentralised is that it eliminates the need for trust between online exchanges and users; Bitcoin uses a cryptographic system to transfer funds instead of using third-party organisations such as banks, loans, or other digital currencies.
