Satoshi Nakamoto, a mysterious individual, posted a white paper on October 31, 2008. The title of the paper is “Bitcoin: A Peer-to-Peer Electronic Cash System”. For the first time, the concept of Bitcoin entered the world. However, the excluded cypherpunk mailing list was promoting the acceptance of privacy-enhancing technology is hardly noticable. For being in the scene for ten years, it’s impossible to look for someone who hasn’t encountered cryptocurrency.
The white paper, having only nine pages, explains how the bitcoin system works. Starting with David Chaum’s “Digicash”, a computer scientist, numerous attempts at electronic cash recorded since its development in the 1980s. At the same time, Digicash facilitates users’ exchanges online without identification. At the same time, it prohibits people from sending the same amount of money to two separate people at once.
Together with Deutsche Bank, a growing number of merchants began to adopt it. For a record period of time, Digicash caught on. Unlike the existing credit-based systems of Visa, Mastercard, and later PayPal, some people could experience benefits from the currency that allows micropayments with a minimal transaction fee. Whoever loves the idea of being politically independent will enjoy using this currency since it is outside the control of any authority.
Some cyphyerpunks refused to give up, even after having hardships win over Visa and Mastercard in their successful battle for payment dominance. Adam Back developed the “Hashcash” system in 1997 with the assistance of Wei Dai’s “b-money” and Nick Szabo’s “Bitgold.”
Both of which mentioned in Nakamoto’s white paper, was the last significant effort to create an online cash system prior to the existence of bitcoin. Nakamoto brought the idea back to life in 2008 after fizzling out after the dotcom bust of 2000–02.
Nakamoto’s Point of View
Records showed past attempts were almost successful in creating secure digital cash, but having a trusted third party, which is a bank, to maintain the system was a major problem they encounter. Nakamoto’s white paper resolves this major problem by focusing on making a transparent public ledger that is given among a network of competing miners—also known as blockchain. The system will be secure as long as miners do not manipulate more than half of the whole network’s computing power.
Computer science and cryptography came together in an almost impossible overall piece of originality to elaborate on a system of economic incentives. The cypherpunk vision finally came together on enhancing privacy and limiting government power while also increasing its transparency.
One of them was that having an invention in a brilliant system will always have its downside. Convincing people to use it with their ignorance of how it works is one of those. Even with all the hype, Bitcoin was an extraordinary success. But even with that, it is still known that cryptocurrency and private blockchains are all just variations of the old ones.
The Hard Forks of Bitcoin
Ethereum has arguably one of the most significant side effects. It demonstrates how blockchain technology can combine with smart contracts. Potentially providing a free decentralization alternative to the huge global armies of fiat-reliant trust-based services industries.
With Nakamoto’s vision, there is only one existing blockchain that proves to be consistent-bitcoin cash, also known as hard-fork. It has the same history and rules with the exemption of two different crucial details. Because the existing blocks on the chain were roughly 32 times bigger than the first bitcoin that existed, and because of lower fees per transaction, it has been paving its way to global adoption. To make matters even more complicated, the built-in coins by the original bitcoin allow all smart contracts to enter Ethereum.
Is this Vision Achievable?
The white paper’s goal is very transparent. But its most definite aim is to create an online transaction that is independent and does not need a third party. This concept already demonstrated, but it leaves a question as to what extent the adoption will be.
Canary Wharf, London’s financial center suggested a clue to the question. The Brewdog company recently launched a promotional event adopting Bitcoin as a cash payment. This is cheaper for them as a payment process than using credit cards. They even allowed Bitcoin cash to convert back to sterling pounds. As of now, Newegg and Microsoft, both computer companies, have recently adopted bitcoin cash payment.
More developed countries like South Africa have started experimenting with the new apps that keep bitcoin cash like Centbee. They believe that it will help people, especially those who can’t open bank accounts. HandCashapp is an app recently developed in Spain with a wider concept called The Money Button. It hints at a wider paradigm with effortless click-based micropayments that has the ability to end pop-up ads that appear as popular online content.
The idea is famous that Nakamoto’s vision for the project may have already been achieved. It remains to be seen whether Bitcoin Cash will permanently replace all fiat currencies and become the global currency. Even though the arrival of the World Wide Web heralded 20 years ago, its real commercial ability still needs realization. There is a large possibility that the advancement of technology present in Bitcoin will have a domino effect on global money. It affects all trust-based financial, legal, and other existing services.