Satoshi Nakamoto’s Bitcoin whitepaper turns 10

On Oct. 31, 2008 an unknown person or group of people known by the pseudonym Satoshi Nakamoto published a paper called “Bitcoin: A Peer-to-Peer Electronic Cash System.” 

Ten years later, we still don’t know the true identity of Satoshi Nakamoto, but pretty much everyone knows about Bitcoin. 

Bitcoin has had plenty of good days and plenty of bad days in the last decade. Its price has reached crazy heights (nearly $20,000 at its peak in Dec. 2017), and fallen into the gutter — numerous times. It’s been lauded as the future of money, and it’s been called a pyramid scheme and a fraud. And while it hasn’t fulfilled the lofty of promises made by its evangelists yet, ten years after its inception it still endures. 

A decade of influence

Regardless of what happens to Bitcoin, the coin, Nakamoto’s paper turned out to be far more than an explanation of how Bitcoin works. A fairly short affair, consisting of 8 pages, it’s become a blueprint on how to launch a cryptocurrency, having been endlessly copied and/or referenced in dozens of cryptocurrency whitepapers that came after it. 

It also laid down the foundation of several concepts (or at least used them in a novel way) that steered the crypto world in the next decade, including blockchain and proof-of-work. 

But most importantly of all — and this doesn’t happen very often — it changed the way people think about money. Most people think of fiat money as the stuff they get in exchange for work; mostly stable, mostly dependable. It’s also leaving you at the whim of banks and sovereign states that control it. 

Bitcoin, in contrast, truly is a bit like electronic cash — easy to transfer from one person to another without fees or intermediaries. And, unlike cash, Bitcoin can easily (and fairly cheaply) be transferred long distances, no matter the recipient, no matter the amount. 

That was the initial promise, at least. Things got complicated very fast, and today Bitcoin mining consumes as much energy as a decent-sized country, everyone uses it for speculation instead of spending it like cash, and, with huge mining pools controlling its output, it’s not even very decentralized. 

A new industry

“Bitcoin has proven that it is one of the most exciting technological experiments of our time. It established the foundations of an entire industry that is currently engaged in extensive R&D in the fields of cryptography, data security, privacy, and self-sovereignty,” Vlad Dramaliev, Head of Digital Marketing of æternity, told us in an e-mailed statement. “By creating a censorship-resistant alternative to money, it has reignited discussions on the nature of money and money creation. It has presented an alternative to an unsustainable global financial system built on debt and inequality.”

People involved in the cryptocurrency space have wildly different opinions on the Bitcoin of today, but they mostly agree on the importance of Bitcoin’s paper when it was published. In a word: It was huge. 

“Without knowing it, Satoshi Nakamoto and the rest of the cypherpunks kick-started an entire multi-billion dollar industry which we now call blockchain. Their distributed ledger, a novel form of recording millions of transactions between individuals without the need for banks, is the most notable accounting revolution since the Venetians’ formalised double entry bookkeeping in the late 1400s,” said Shiv Malik, Head of Strategy and Communications at Streamr.

The mystery of Nakamoto

Bitcoin’s meteoric rise aside, the mystery of who Nakamoto really is still hasn’t been solved, despite numerous theories and several more or less convincing claims on his identity. Whoever he is, he’s an interesting figure: A billionaire that never spent the bulk of his wealth and a genius programmer that hasn’t done (at least not publicly and under this name) any work in a decade. 

Ten years later, perhaps the most amazing characteristic of Nakamoto’s paper is its simplicity. Despite being groundbreaking in several ways, you don’t need a doctorate in anything to read it. It’s always been, and still is, a great starting point for anyone wanting to learn about cryptocurrencies. If you haven’t, I encourage you to read it here; this annotated version is also a good starting point. 

Disclosure: The author of this text owns, or has recently owned, a number of cryptocurrencies, including BTC and ETH.

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