Thoughts on Bitcoin

Summarizing my thoughts about Bitcoin in the Devcon V Scholar Program

In 2008, Satoshi Nakamoto exposes a document that describes a digital value transfer system. This technology includes encryption techniques, data structure strategies and consensus protocols based on different previous works. Among these previous works, it’s possible to mention electronic money protocols (e-cash), proof of work (hash cash), and no central authority or censorship in the system.

Bitcoin is a peer-to-peer system that eliminates the need for a trusted third party. It was casual (or not), which arises after a financial bubble that made people lose confidence in banks. Bitcoin keeps a chronological record of transactions between different users of the network to avoid double-spending. Use cryptography to sign transactions and verify identities. Use data redundancy and consensus protocols to ensure the stability and security of the network. In addition, it proposes a transaction processing and incentive mechanism that ensures that the nodes that cooperate with the preservation of the network obtain a reward. Finally, the initial configuration serves as the first proof of concept, allows a moderate propagation of information. But, it’s important to highlight that decisions must be taken that resolve issues of scalability when Bitcoin will be adopted in a massive way.

Each complete network node functions as a transaction generator (wallet), a database (storage of the blockchain), a transaction processor (miner), and a propagator of information within the network. In Bitcoin white paper, a new form of digital money (cryptocurrency) and new technology (blockchain) that gives rise to a revolution in the software industry is presented.

In conclusion, I have described the most important features of the whitepaper. Bitcoin and Blockchain are disruptive technologies. And the world began a slow transition to a new value transfer system that removes barriers between countries and the traditional banking system. I am very happy with this progress that has been presented at an early time in my life. We are in a new historical revolution and the emergence of Bitcoin will be a well-remembered historical moment.

Disclaimer: The views expressed by the author above do not necessarily represent the views of the Ethereum Foundation.