What is Satoshi and Bitcoin? – Explained

Satoshi and Bitcoin – The Quick Details

Bitcoin and its smallest purchasable increments, Satoshi, is the world’s first decentralized cryptocurrency. It’s important to note it is not the first digital currency contrary to other suggestions that are floating out there. Its purpose is to be a peer-to-peer version of electronic cash, aiming to allow payments sent directly online from one party to another without control or moderation of one financial group or institution.

Bitcoin’s Founder(s) – Satoshi Nakamoto / Unknown

In 2008, Satoshi Nakamoto published a whitepaper on bitcoin¹. In 2009, he made Bitcoin opensource software. Then, in 2011, he sent a final message to fellow developers that he was moving on to other projects. This was all done without revealing who he is and it is still a mystery today. While everyone knows the name Satoshi Nakamoto in cryptocurrency communities, no one knows who the real creator is.

The History of Bitcoin and Satoshi

Bitcoin and Satoshi – A Deeper Look

Now that we’ve gone over the quick details, here is a deeper look into the technology and growth goals. As with most of our articles, this information might change from time to time. If there are any notable changes to the token’s technology, we will do our best to update this article.

The Technology Behind Bitcoin

Satoshi Nakamoto had designed bitcoin with the purpose of getting away from the trust-based model in current financial institutions. While he mentioned the trust-based system works well enough for most transactions, it did not have the effectiveness needed for modern society. Bitcoin is an electronic payment system based on cryptographic proof. This ensures no payment reversals or additional costs of mediation and trust assurance.

Bitcoin has no physical form.

The easiest aspect to explain is Bitcoin has no asset backing it It is entirely digital in nature and even then it is not a “digital good”. Rather, Bitcoin is combined segments of transactions and digital signatures that make an entire blockchain. When you “own” a bitcoin, you have a portion of the blockchain that only your digital signature (private key) can access. If you lose your private key, then your Bitcoin is gone forever.

The majority controls Bitcoin’s value.

This is a bit harder to explain as it isn’t necessarily everyone sitting down saying “I think bitcoin should be $400,000 today”. Bitcoin by itself is naturally valuable as it is a trust-free, secure, fast, and low-cost method of transferring value. Its reliance and demand are controlled by all users and can’t be majorly influenced by any bank or corporation (within reason).

Bitcoin is decentralized and global.

Anyone that wants to participate in the bitcoin blockchain can. It is not hosted by one single entity, but rather all participants host it together through a manner of verified transactions. Each full node has the entire blockchain and self-verifies all transactions. While this doesn’t mean your computer must have the entire 350GB blockchain to participate, it does mean that each node is fully verified many times to ensure the complete accuracy of all transactions. This is especially important as any single person or institution can not flood the market with fake coins as long as there are more global verified copies than what the person or institution controls. To put it simply, if a single node tried to put out false information all the other nodes would cross-reference with each other and then determine the incorrect node.

Bitcoin’s history is irreversible.

Because of the above information, any single node that has wrong information will “self-correct” against the other nodes on the network, or it will not be able to participate. This ensures past transactions cannot be altered to show a different participant receiving money than the intended recipient.

Bitcoin is extremely secure.

A wallet’s private key, which is what makes you unique, is a 256-bit number. To just guess it, it would take a quantum computer 229,000,000,000,000,000,000,000,000,000,000 years². This gives you the assurance that no one will know your unique identification number unless you give it to them.

This is still only brushing the surface of Bitcoin.

There are great resources out there for learning the intricacies of Bitcoin. If you are looking for even more information a great resource to start would be the Bitcoin whitepaper located at https://bitcoin.org/bitcoin.pdf.

Growth Goals of Bitcoin

It’s important to note that Bitcoin is still in beta according to its developers³. While there is no official Roadmap, changes to the protocol will require cooperation from all its users. According to bitcoin.org, there are new tools, features, and services in development to make Bitcoin more secure and accessible to the masses. Some of those developments are still not ready for everyone, and Bitcoin is in the process of maturing.

Let me know what you think, or if this article has been helpful/not helpful. As a reminder, I am as unqualified as I can get and am not a financial advisor or life coach. This article does not recommend investing or not investing in Bitcoin. This article is purely for informational purposes only. Our goal here is to leave you more informed and confident in your own investment decisions. If we have anything wrong with the article, or if we may have missed something huge, please let us know. We will not only make sure to correct it, but we’ll credit you for the find as well.

Helpful Links (superscript number references, also known as sources)

1. Bitcoin: A Peer-to-Peer Electronic Cash System – https://bitcoin.org/bitcoin.pdf
2. 128 or 256 bit Encryption: Which Should I Use? – https://www.ubiqsecurity.com/blog/128bit-or-256bit-encryption-which-to-use/
3. Frequently Asked Questions: What are the disadvantages of Bitcoin? – https://bitcoin.org/en/faq#what-are-the-disadvantages-of-bitcoin

Christoph

Christoph is a technical integrations analyst who specializes in security infrastructure and coaching. He has found he thoroughly enjoys experiencing major market losses, falling for get-rich-quick schemes, learning about upcoming market trends, stocks, crypto, or anything related to investing and building income.