The first mention of cryptocurrency appeared in 1983, but everything remained “on paper” until 2008. Ten years ago, the oldest cryptocurrency appeared – bitcoin (Bitcoin). Almost five full years its competitors used its algorithm for creating their own versions (altcoins). When bitcoin jumped sharply in 2017, however, discussions began about who actually invented bitcoin and what it was for.
How bitcoin came to be
The idea for the cryptocurrency came about through the development of a cashless transfer system. The key challenge for the creator of bitcoin was to develop technology that would allow for transparent yet anonymous payments over the Internet. The challenge was to keep the information about the payer and the recipient confidential, but to allow third parties to present the payment data.
Basic algorithms to protect against fraud were developed long before the first Bitcoin coin appeared:
1983 – Blind Signature algorithm, e-cash protocol was created (David Chown worked on them).
1997 – Hashcash system appeared (spam protection developed by Adam Black).
It is worth mentioning Nick Szabo, who worked on the Bit Gold decentralized financial system project. He is sometimes attributed the authorship when discussing who created bitcoin. But the programmer himself denies it. He was only the first to try a similar technology, and unsuccessfully.
History of the progenitor of cryptocurrencies
It is officially believed that the founder of the cryptocurrency is Satoshi Nakamoto. That’s how the anonymous developer who wrote the protocols for a brand new currency, which he himself dubbed Bitcoin, called himself. The year 2009 became the starting point for mining the first digital coins. The author of the system created the first bitcoin wallet and generated the first block. Initially, due to the lack of material support, the value of one monetary unit was counted by the cost of electricity.
It took only two years for Bitcoin exchange services to open for real money. Afterwards, there were proposals to trade the cryptocurrency on the exchange, on a par with the U.S. dollar, pound or euro. Even the founder of Bitcoin did not anticipate such dynamics. The leading media, stock exchanges and corporations paid attention to the new way of paying for goods. There was also some criminal activity: until 2013, the Silk Road criminal group, which sold illicit goods for bitcoins, was active on the U.S. market.
After the arrest of its creators, the cryptocurrency began to be taken seriously. That, in the opinion of experts, provoked a sharp rise in the exchange rate of bitcoins. On the one hand, the governments of many states are trying to take control of an anonymous payment system. On the other hand, it attracts investors and maintains the high rate of the cryptocurrency.
Versions about the Bitcoin developer
The key theory about the person who invented the cryptocurrency is its anonymous existence. Most likely, Satoshi Nakamoto is a pseudonym. After all, the translation of these words means the following (very similar to the abstract description of the bitcoin project):
Satoshi – resourcefulness, wisdom, clear thinking;
naka – interconnection, inner environment;
moto – origin, basis, foundation.
There is no point in revealing the creator’s identity. His fortune, according to some versions, is estimated at 1 million bitcoins (more than 2.5 billion U.S. dollars). There is no need to draw attention to yourself with such wealth. The more so because the creator of the cryptocurrency stated back in 2010 that he was switching to other projects and bitcoin would be handled by different people.
The Reasons of Bitcoin’s Popularity
None of the listed candidates provided reliable evidence that he is the developer of the cryptocurrency. The question remains open, and the bitcoin exchange rate holds at an impressive level. No currency has ever managed to become that expensive. Even platinum has almost 8 times the official rate.
The reasons for its high popularity are several important features:
Complete anonymity of the system. Transactions are conducted without transmitting personal data, without identity confirmation.
High security. It is easy to trace the fact of payment in the archive of transactions. All transactions on the transfer of coins are stored forever from the moment of their production.
Decentralization of storage. Cryptocurrency does not depend on any country, political or economic power. No single state or individual is able to directly affect the rate or performance of the system.
What adds to the popularity of the creator of Bitcoin is also the ability to get the cryptocurrency on their own. Anyone who is interested in this field can take part in the creation of new coins and, over time, get rich. The main thing is to adhere to the basic safety rules when creating a bitcoin wallet, storing the savings in it.