Digital Currency Whitepaper: Bitcoin White Paper

Bitcoin is a digital currency created in 2009 by the pseudonymous Satoshi Nakamoto, following ideas in a whitepaper. It uses peer-to-peer technology and decentralized processing of transactions by miners to facilitate instant payments without third party intermediaries. Nakamoto began working on the code in 2007 and launched the Bitcoin network and first block in 2009, embedding a message referencing the financial crisis. He continued collaborating until 2010, then handed over the code and network responsibilities before disappearing from the project.

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Digital Currency Whitepaper: Bitcoin White Paper

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alehegn manaye

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1.

introduction
Bitcoin is a digital currency created in January 2009. It follows the ideas set out in
a whitepaper by the mysterious and pseudonymous Satoshi Nakamoto.1 The
identity of the person or persons who created the technology is still a mystery.
Bitcoin offers the promise of lower transaction fees than traditional online
payment mechanisms and, unlike government-issued currencies, it is operated
by a decentralized authority.

Bitcoin is a type of cryptocurrency. There is no physical bitcoin, only balances

kept on a public ledger that everyone has transparent access to. All bitcoin
transactions are verified by a massive amount of computing power. Bitcoin is not
issued or backed by any banks or governments, nor is an individual bitcoin
valuable as a commodity. Despite it not being legal tender in most parts of the
world, bitcoin is very popular and has triggered the launch of hundreds of other
cryptocurrencies, collectively referred to as altcoins. Bitcoin is commonly
abbreviated as "BTC."

Bitcoin is one of the first digital currencies to use peer-to-peer technology to

facilitate instant payments. The independent individuals and companies who own
the governing computing power and participate in the bitcoin network—bitcoin
"miners"—are in charge of processing the transactions on the blockchain and are
motivated by rewards (the release of new bitcoin) and transaction fees paid in
bitcoin.

Development of bitcoin

Nakamoto stated that work on the writing of the code for bitcoin began in 2007. On 18 August 2008,
he or a colleague registered the domain name bitcoin.org, and created a web site at that address.
On 31 October, Nakamoto published a white paper on the cryptography mailing list at
metzdowd.com describing a digital cryptocurrency, titled "Bitcoin: A Peer-to-Peer Electronic Cash
System".

Satoshi Nakamoto message embedded in the coinbase of the first block

On 9 January 2009, Nakamoto released version 0.1 of the bitcoin software on SourceForge, and

launched the network by defining the genesis block of bitcoin (block number 0), which had a reward
of 50 bitcoins. Embedded in the coinbase transaction of this block is the text: "The Times
03/Jan/2009 Chancellor on brink of second bailout for banks",citing a headline in the UK
newspaper The Times published on that date. This note has been interpreted as both
a timestamp and a derisive comment on the instability caused by fractional-reserve banking.
Nakamoto continued to collaborate with other developers on the bitcoin software until mid-2010,
making all modifications to the source code himself. He then gave control of the source code
repository and network alert key to Gavin Andresen, transferred several related domains to various
prominent members of the bitcoin community, and stopped his recognized involvement in the
project.
In 2021 a monument was announced in honor of Nakamoto in Budapest, Hungary for his work on
Bitcoin and cryptocurrencies.