Today marks 15 years since Satoshi Nakamoto, the creator of Bitcoin, shared the Bitcoin technical document with a mailing list of cryptographers on October 31, 2008. Before providing the link to the document titled “Bitcoin: A Peer-to-Peer Electronic Cash System,” Satoshi stated that he was working on a new electronic cash system that is completely peer-to-peer and does not rely on trusted third parties.
In the Bitcoin white paper, Satoshi proposed a decentralized system that could facilitate peer-to-peer transactions and solve the “double-spending” problem commonly associated with cryptocurrencies. He suggested implementing this system through a proof-of-work consensus mechanism to verify and record transactions using a network of data.
Following this milestone, Bitcoin was officially launched just two months later, on January 3, 2009.
Satoshi’s breakthrough came after other impressive developments in the fields of cryptography and cryptocurrency. The first reference mentioned in the Bitcoin white paper is Wei Dai’s B-money, an electronic peer-to-peer cash system that never materialized but played a key role in Satoshi’s bitcoin plans.
Similar to Bitcoin, B-money proposed that participants in the system maintain a database of account balances tracking the ownership of money. Transactions would be initiated and completed with a broadcast message sent to all participants, updating their account balances for the specific transaction.
In many ways, this can be seen as a precursor to the Bitcoin protocol, which maintains a continuously growing blockchain data record. This process requires a cryptographic proof called proof-of-work, which proves to others that a certain amount of computational effort has been expended on one side of the transaction.
Satoshi applied this concept to Bitcoin, referencing Adam Back’s Hashcash, which included proof-of-work to limit email spam and denial-of-service attacks in 1997. Another fundamental feature of Bitcoin successfully implemented by Satoshi was the use of a method called timestamps.
In Bitcoin, a timestamp server runs alongside the blockchain network, associating a timestamp with a transaction block’s hash (a unique serial number) when the block is added to the Bitcoin blockchain.