Who really created bitcoin & why? This is the Question.
Bitcoin was created by a person or group considered as Satoshi Nakamoto. The development of Bitcoin up until today has three major periods. There is the pre-introduction period of Bitcoin up until 2008, the development of Bitcoin and infrastructure needed to support Bitcoin from 2008-2013, and the mass acceptance and popular movement of Bitcoin from 2013 until today.
Before 2008, there was a great deal of technologies developed that would allow for the creation of Bitcoin. eCash is considered to be the first popular cryptographic currency and was created by David Chaum, a cryptography pioneer. His original paper on anonymous electronic currency was made in 1983. The currency was protected by having cryptography methods implemented on the eCash currency. Basically, the users of the system would keep digital keys that only they would know that would allow them to use eCash to make purchases.
What is Bitcoin?
eCash developed the system of micropayments that Bitcoin merchants use today to allow purchasers to make payments for goods and services through their stored currency. At the time, there was less concern for privacy and inflation of U.S. currency, so there was not enough demand as bank cards were seen as an already accepted substitute. eCash went bankrupt.
Hashcash was another system, originally developed in 1997, that produced technological advances that were needed for Bitcoin’s development. The Hashcash technology system was a way to protect digital currencies from being hacked. The Hashcash system prevented digital currencies from being hacked by creating a system that made brute forcing the system impossible. Brute force just means guessing the right key or password to obtain access to the digital currency.
To take an everyday example, if you had a combination lock that only required one number to be correct and had thirty different options, you would be able to open the lock very easily. However, if you had three different numbers that you had to choose thirty different choices for each number, you would have a very difficult time opening the lock. Hashcash made it very hard for someone to gain access to your personal digital cash.
The major pre-Bitcoin digital currencies of b-money, RPOW, and Bit gold all used the developments of Hashcash and eCash to develop. Privacy and inflationary concerns grew during the late 1990’s and early 00’s, and a number of the first users of the digital currencies used them for those reasons. Early digital currencies developed in the hacker world where identity wasn’t always certain. The same people that wanted to create a digital currency that expanded privacy wanted the same privacy for themselves.
The creation of Bitcoin and the infrastructure necessary to flourish took place from 2008-2013. The actual creation was credited to a fictional man referred to as Satoshi Nakamoto with a paper uploaded to the Internet. Now unlike David Chaum, Satoshi Nakamoto is not the name of any individual in any government database. Intelligently, Satoshi Nakamoto, or genuinely the group known as Satoshi Nakamoto, knew that if he created a digital currency that ensured privacy that he would be the enemy of many governments.
The paper developed the concept when using a peer-to-peer network that could be used to help ensure the privacy of a digital currency. Instead of needing a bank or other entity to be the center of all transactions, a peer-to-peer network would use a variety of users to authenticate transactions and keep track of the amount of digital currency each person had. Like peer-to-peer torrent programs, peer-to-peer digital currencies kept the network safe by not having a central transaction point.
Bitcoin clients created from Satoshi Nakamoto’s work developed the first network of Bitcoin. The concept of Bitcoin mining was also created. In return for computer power to solve math problems, the user would be rewarded with additional Bitcoins.
One of the major infrastructure requirements to digital currency was an exchange where Bitcoins could be exchanged money. Mt. Gox was created in 2010 and was one of the first major exchanges where Bitcoins could be bought and converted into real currency.
Merchants accepting payments were also a major infrastructure need. Websites and systems were created to allow merchants to accept and connect to Bitcoin clients. Anonymous websites using Tor, a tool used to obtain Internet anonymity, allowed more merchants to be able to use Bitcoins.
Massive acceptance of Bitcoin started in 2013 when large group of merchants began to accept Bitcoins in exchange for goods and services. The prices of Bitcoin skyrocketed during 2013 and became well-known as a digital currency offering great amount of privacy and inflation protection.
Overall, Bitcoin’s creation was not from the development of any one individual but from the work of many people. David Chaum, the developers of Hashcash, the group known as Satoshi Nakamoto, and the developers of needed infrastructure created Bitcoin.