Bitcoin is a cryptocurrency , a digital asset
designed to work as a medium of exchange that
uses cryptography to control its creation and
management, rather than relying on central
authorities . [1] It was invented and implemented
by the presumed pseudonymous Satoshi
Nakamoto , who integrated many existing ideas
from the cypherpunk community. Over the course
of bitcoin's history, it has undergone rapid
growth to become a significant currency both
on- and offline. From the mid 2010s, some
businesses began accepting bitcoin in addition
to traditional currencies. [2]
Number of bitcoin transactions per month
(logarithmic scale)
Pre-history
Prior to the release of bitcoin there were a
number of digital cash technologies starting with
the issuer based ecash protocols of David
Chaum and Stefan Brands. [3][4][5] The idea that
solutions to computational puzzles could have
some value was first proposed by
cryptographers Cynthia Dwork and Moni Naor in
1992. The idea was independently rediscovered
by Adam Back who developed hashcash, a
proof-of-work scheme for spam control in
1997. [6] The first proposals for distributed
digital scarcity based cryptocurrencies were Wei
Dai's b-money [7] and Nick Szabo's bit gold. [8]
[9] Hal Finney developed reusable proof of work
(RPOW) using hashcash as its proof of work
algorithm. [10]
In the bit gold proposal which proposed a
collectible market-based mechanism for inflation
control, Nick Szabo also investigated some
additional aspects including a Byzantine fault-
tolerant agreement protocol based on quorum
addresses to store and transfer the chained
proof-of-work solutions, which was vulnerable to
Sybil attacks, though. [9]
Creation
On 18 August 2008, the domain name
bitcoin.org was registered. [11] Later that year,
on 31 October, a link to a paper authored by
Satoshi Nakamoto titled Bitcoin: A Peer-to-Peer
Electronic Cash System[12] was posted to a
cryptography mailing list. [13] This paper detailed
methods of using a peer-to-peer network to
generate what was described as "a system for
electronic transactions without relying on
trust". [14][15][16] On 3 January 2009, the
bitcoin network came into existence with Satoshi
Nakamoto mining the genesis block of bitcoin
(block number 0), which had a reward of 50
bitcoins. [14][17] Embedded in the coinbase of
this block was the text:
The text refers to a headline in The Times
published on 3 January 2009. [19] This note has
been interpreted as both a timestamp of the
genesis date and a derisive comment on the
instability caused by fractional-reserve
banking. [20] :18
The first open source bitcoin client was released
on 9 January 2009, hosted at SourceForge. [21]
[22]
One of the first supporters, adopters, contributors
to bitcoin and receiver of the first bitcoin
transaction was programmer Hal Finney . Finney
downloaded the bitcoin software the day it was
released, and received 10 bitcoins from
Nakamoto in the world's first bitcoin transaction
on 12 January 2009. [23][24] Other early
supporters were Wei Dai, creator of bitcoin
predecessor b-money , and Nick Szabo , creator of
bitcoin predecessor bit gold. [14]