Origins and Philosophical ideology behind Bitcoin
In the early 90s, a group established a mailing list and used to have regular meetups to discuss technical topics ranging from mathematics, cryptography, computer science even political and philosophical discussion. Libertarian views formed the core philosophy of the group who even today believe in the idea that society would be better off with either no government or very minimal government. The cypherpunk movement was a group of people who believed that with strong online privacy and strong cryptography you could re‐architect the way that people interact with each other. In this world, cypherpunks believed, people could protect themselves and their interests more effectively and with much less activity (or, as they would say, interference) from the Government. They even published an official manifesto. You can read it here. Many members of these groups were anti-capitalists and viewed all big companies as ‘Evil’.
Previous attempts of digital money
An electronic or digital cash / payment system has never really materialized, but there had been many attempts since last 30 years on this topic. Probably only Paypal had a serious business model and has wide adoption even today. The many reasons why each failed are —
- The biggest problem, common amongst all, was its centralized nature. Eventually, the authority was with an organization and had some sort of centralized control. We have already seen with Byzantine Generals’ Problem the different types of networks and none implemented a true peer to peer system.
- Poor security implementation and did not have a full-proof solution to Double spending which Bitcoin does so efficiently.
- Victims of strong banking lobby and complex Govt regulations.
- No real benefit to end user as either it is difficult to adopt, or less market penetration or expensive for merchants or very complex to understand.
- Some were scam or people didn't trust them or they never had a solid business model
Creator (s) of Bitcoin
The mysterious origins of Bitcoin are like the stuff of legends. An anonymous person or a group of people under the pseudo-name of Satoshi Nakamoto published a whitepaper proposing a peer to peer electronic cash system aka digital money. Crypto-scientists, libertarians, hackers and even traditional software developers were one of the early adopters — the prominent ones being Hal Finney and Gavin Andresen. The first bitcoin ‘block’ was ‘mined’ on Jan 3, 2009, and is called as the ‘Genesis block’. Soon events like the first Bitcoin real-world transaction (10000 BTC for 1 pizza valued today at over 700K $ :) ), setting up of Bitcoin exchanges etc took place. And the rest is history.
Media has claimed to have solved the puzzle of Satoshi but without any conclusive proof. A lot of circumstantial evidence has been presented by the media, especially of the people who were working in the space of cryptography, mathematics. Satoshi still remains anonymous for obvious reasons of personal security (since he lot of Bitcoins from initial days) and fear even from Govt (since people who have earlier tried to create or mint money have been arrested).
Today Bitcoin and Block chain have become synonymous but the original whitepaper never even mentioned the word ‘Blockchain’ rather it just used the word ‘chain of Blocks’. Satoshi just wanted to create an electronic cash system. The power of Blockchain was unleashed much later when large ‘evil corporations’ realized its potential.
Is Bitcoin a scam
The first time an adult learns a new language they try to understand all swear words :). I know only one Spanish term and that is ‘hijo de puta’ :). Similarly, I was introduced to Bitcoin for all the wrong reasons — ‘Silk Road’: An online marketplace, similar to Amazon, for all illegal activities. Mainstream media talked about Bitcoin only for all wrong reasons. Bitcoin suffers from a huge branding problem and hence many think of it as a scam or a Ponzi scheme.
I will give an analogy. Iodex and Vicks are popular cold and flu balms. They are relatively cheap and easily available over the counter. Some students use it between 2 loafs of bread and consume it as ecstasy to be ‘high’ as illegal drugs. Now tell me is Vicks or Iodex a scam or students misusing it ?
Bitcoin transactions are public but ownership is anonymous and hence the ‘dark net’ was attracted and was an early adopter to Bitcoin. But certainly, Bitcoin is NOT a scam and rather a revolution.
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