| Ch. 1 | From Concept to Reality: The Birth and Growth of #Bitcoin 🍊
From Concept to Reality: The Birth and Growth of Bitcoin 🍊
The days of being tied to traditional forms of a currency controlled by governments are gone. #Bitcoin, a decentralized digital currency, allows you to send funds from anywhere in the world to anywhere else, instantly, securely, and with minimal fees (if any at all).
But the story of Bitcoin goes back much further than its practical uses. It all started in 2008 with Satoshi Nakamoto, who introduced the world to a decentralized network capable of achieving consensus without any central authority.
This concept, known as the Byzantine Generals' Problem in the world of computer science and distributed systems, had stumped experts since it was first described in 1982. That is, until Nakamoto claimed to have found a solution.
Initially met with laughter and dismissal, Nakamoto went on to publish software that allowed the creation of the Bitcoin network just three months after releasing his groundbreaking paper. AKA, Bitcoin: A Peer-to-Peer Electronic Cash.
Contrary to popular belief, Bitcoin is not a company or organization, but rather a standard or protocol similar to TCP/ IP or the internet. It operates based on a set of mathematical rules agreed upon by all participants in the network. Thanks to this system and the invention of Nakamoto, Bitcoin allows for a completely decentralized network of computers to reach a consensus on transactions happening on the network, effectively determining who holds the money.
In this peer-to-peer network, sending money from one account to another is as easy as sending an email - there's no intermediary. Every 10 minutes, the entire network reaches a consensus on what transactions have occurred through a simple electronic election, all without the need for a central authority.
But the real significance of Bitcoin lies in its potential for a decentralized organization on a scale never before seen. Yes, it can be used as a currency, but it also has the ability to revolutionize voting, stock ownership, asset registration, and even notarization. Don't get caught up in the fluctuating price of Bitcoin the currency - instead, understand the revolutionary technology and network it has created.
Since the inception of Bitcoin, the following consensus rules have remained unchanged:
- A maximum of 21 million Bitcoins will ever be produced
- A target of 10-minute block intervals
- Halving events occurring every 210,000 blocks (roughly every 4 years)
- A block reward starting at 50 and halving continually at each halving event until it reaches 0 (estimated to occur around 2140)
Any change to these parameters requires the consensus of all Bitcoin participants. So, not only does Bitcoin provide a decentralized network for financial transactions, but it also has a decentralized system for decision-making and rule-setting.
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