Education, News

The Bitcoin Whitepaper at 10

Today marks the 10-year anniversary of the Bitcoin Whitepaper.

The paper, which was written by the mysterious Satoshi Nakamoto, is only nine pages long. But over the course of those nine pages, Satoshi used a combination of calculations and logic to layout a new system that would enable peer-to-peer digital transactions without the need for a trusted third party.

On the surface, the paper, like the underlying technology that it outlines, looks relatively simple and straightforward. It walks through how a distributed network would operate using a proof-of-work model. It also talks about incentives and privacy and why a peer-to-peer network is needed in the first place.

There’s an elegance in its simplicity, and now, 10 years later, we can see that what the Bitcoin Whitepaper set in motion is revolutionary.

In a recent piece published in CoinDesk, Abra founder and CEO Bill Barhydt elaborated on the significance of the Bitcoin Whitepaper. Specifically, he wrote about how bitcoin solved the double-spend problem, and what that solution enabled:

Solving the double-spend problem helped move the internet one step closer to its initial promise of an open information network. By eliminating the need for trusted third-parties, bitcoin has become the foundation for the ultimate economic freedom.

Why bitcoin matters

For the decades leading up to the creation of bitcoin, computer scientists and cypherpunks were developing the concepts that Satoshi Nakamoto drew from to create bitcoin. Decades from now, probably, people will still be building on top of the bitcoin framework.

The creation of bitcoin and the cryptocurrencies that would follow (today there are 2085 listed cryptos, with a market capitalization of roughly $203 billion) make a lot more sense when they are put in the context of what was happening outside the realm of internet or information technologies at the time.

When the Bitcoin Whitepaper was published in 2008, it came on the heels of a global financial crisis. So the creation of bitcoin was addressing an immediate need: It was a means to simplify the complexity of (or at least provide an alternative for) the financial system by creating a peer-to-peer means of exchange that is native to the internet.

And now, 10 years later, there is more emphasis on creating information networks that are decentralized and censorship-resistant. The call for decentralization is becoming more significant as the risks inherent in the way the current internet is governed by a few heavily centralized entities.

Or, as Barhydt wrote about the creation of bitcoin in CoinDesk:

(It) opened a massive technological frontier that allowed for experimentation and the design and deployment of a new financial sector. The true beauty of bitcoin is that it’s based on open-source computer code and it’s not owned or controlled by anyone. It is globally accessible in that the only requirement for participation in the new economy is an internet connected device.