“Bitcoin: A Peer-to-Peer Electronic Cash System” was issued on October 31st, 2008, marking the birthdate of the cryptocurrency phenomenon that took the world by storm during the past 11 years. Coincidence or not, on Halloween, the biggest scare for the traditional financial markets was born.
Halloween Day, 2008 — The Birth of Bitcoin
Following the 2008 financial crisis, people were beginning to look for alternatives. Centralized financial systems were not to be trusted. This was the socio-economic nightmare the Bitcoin made its first appearance. Satoshi Nakamoto was offering a safety net to life savings.
“I’ve been working on a new electronic cash system that’s fully peer-to-peer, with no trusted third party.” (source) — Bitcoin’s famous birth announcement
The magnitude of the 2008 recession was generated by fear and loss of trust in the traditional financial institutions. They were no longer considered able to sustain the needs and support individuals and companies at large. Whenever trust is broken, we tend to look for it somewhere else. We tend to look for or create solutions that will ensure that crisis will not happen again.
“Bitcoin has eliminated the need for third-party intermediaries by allowing users to directly transact with one another.” (source)
The world of digital money became a possibility as a response to the financial crisis of 2008. In order for a transaction to take place, there needs to be trust between the two parties. When the traditional financial institutions began to betray that confidence we had in them, cryptocurrencies were created. Satoshi Nakamoto introduced us to the first, the Bitcoin, the digital coin built on a new technology called the blockchain.
After this catalyst moment, the revolution eased up into evolution, and we saw the rise of the cryptocurrencies. Bitcoin just paved the way.
The Catalyst Moment of Bitcoin Being Created
“The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.” — The Genesis block text after the first 50 bitcoins were mined.
The above quote is the text included in the first block of a blockchain ever created. As blockchain is basically written code, the line on which the quote was found is actually pseudocode. Not real, just describing the logic behind the code. Reading it backward, it states the quote mentioned above.
Nakamoto may have known the significance of his discovery as attempts to find a solution to the double-spending problem had been ongoing for decades. We may believe that the date was intentionally chosen, especially when combined with another significant date, January the 3rd 2009, the day bitcoin’s genesis block was mined. The public opinion death of the traditional financial model made way for the new, digital one, the cryptocurrency.
He probably wanted to make clear through this timestamp that the blockchain was created after the date of January 3rd, 2009, as a response to The Times’ front-page title: “Chancellor on brink of second bailout for banks”.
As the financial crisis was not yet over, a second capital infusion was thought to be needed. When banks run out of funds, Governments print more money, thus lowering the value of the coin, and raising prices, pulling down the quality of people’s lives. This thing does not happen with cryptocurrencies. There is a fixed amount of existing coins, and because of the coding used in their design, no further amount can be produced.
Cryptocurrencies & Blockchain— Almost Part of Our Daily Lives
Cryptocurrencies use a digital wallet to store the funds for each individual. Basically, you are in total control of your own money, without relying on third-party institutions to operate transactions or validate purchases in your name. It’s also cheaper, as there is no commission for the transactions taking place. It all happens between the parties that have agreed to trade with one another. That’s why most of the early adopters of cryptocurrencies were e-commerce businesses, that could make the most of directly receiving payments from their customers, without relying on banks to make it possible.
Blockchain originated as a layer that Nakamoto built Bitcoin on, but the tech can be used for many other situations. As cryptocurrencies can provide solutions to many more issues than e-commerce payments. Decentralized systems do not automatically mean cryptocurrency or specifically Bitcoin.
As a stand-alone technology, blockchain doesn’t necessarily involve any notion of currency. At its core, it is a platform ready to sustain any app project aiming to have a shared database or operations system/workflow (it’s basically a distributed database). For such young and emerging technologies in both the software and financial industries, we’re alongside you, looking forward to what the future holds.
Bitcoin was only the inception of the digital technology revolution. Onwards! HAPPY BIRTHDAY, BITCOIN!
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