The Undeniable Marriage of Blockchain Technology & Bitcoin

Blockchain History 101

Let’s start at the beginning of blockchain history. In October 2008, a man named Satoshi Nakamoto drafted a white paper for bitcoin, the famous cryptocurrency. 

The paper was aptly named Bitcoin: A Peer-to-Peer Electronic Cash System. It described the digital cash and the platform to house it--Bitcoin with a capital “B”. It’s important to note that “bitcoin” with a lowercase “b” refers to the cryptocurrency, while “Bitcoin” with an uppercase “B” refers to the platform itself. 

On January 9, 2009, Nakamoto released the first version of Bitcoin software on a platform called Surgeforce. From there he created a website, Bitcoin.Org, and continued working on the platform until about mid-2010.  At that point, he handed over control of the platform to a man named Gavin Andresen. 

Nakamoto’s identity has never been confirmed. He’s never revealed any pictures, or identifying information--other than claiming he’s from Japan, and his birthday is April 5, 1975. Because of the extreme caution taken to conceal his identity, there is little known about Bitcoin’s true beginnings.

The genesis block gives us a few clues about the software’s start. This block is the very first block ever recorded on the blockchain--named because it has no predecessor, much like the first book of the Bible. The block is time-stamped 18:15:05 GMT January 3, 2009. 

Interestingly enough, Nakamoto left a text message on the genesis block reading “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks”, in reference to a New York Times article published earlier that day. This tidbit of information strongly suggests that the block was created and mined at the time of the original timestamp. 

Mining 

Mining is the process of verifying a transaction, which is then recorded on a distributed ledger (see definition below). Bitcoin is then released to the node that verified the transaction first, as a reward. 


When Bitcoin was first created, the reward was 50 bitcoins. At a set number of blocks, the reward is halved. As of November 2017, it’s at 12.5-bitcoin-per-reward. 

Interesting side note: You can technically accept less-than the reward offered. There’s only ever been a single instance of this. 

Blockchain technology is a distributed ledger. A distributed ledger is a consensus of shared digital data, spread across various geographic regions. 

Basically, it means there are nodes (any computer that connects to the network), which record these transactions. Because it’s distributed across the network, each individual ledger should be the exact same, for a given transaction. 

It’s extremely easy to see if there’s been any nefarious activity, as the ledgers will not precisely match up. Retroactively changing them is near-impossible. 

With this in mind, let’s jump back over to Satoshi. For 10-days after creating the genesis block, he mined bitcoin--but not to the point he tried to pre-mine everything. 

Pre-mining, as the name would suggest, is mining all cryptocurrency before releasing it to the public. (This is EXTREMELY frowned down upon. It tries to centralized a decentralized platform. The cryptocurrency, Ripple, is notorious for this). 

He mined to ensure the platform performed correctly. Multiple blocks were created in that timeframe, and thus a hefty sum of bitcoin were rewarded. With the known wallets--where cryptocurrency is stored--of Nakamoto, his wealth sits at about $7.8 Billion, as of November 2017.

We've covered Bitcoin’s beginnings. But, it still begs the question….

How Does Bitcoin Fit in With Blockchain?

The original code for blockchain was written into Bitcoin’s programming. They’re an undeniable marriage of technologies. Blockchain history resides entirely within the cryptocurrency's platform.

Each bitcoin transaction is recorded on a distributed ledger, or blockchain (Remember, a distributed ledger is a consensus of shared digital data, spread across various geographic regions)

Every time a transaction is completed, the information is sent out to the network to be verified by something called network nodes. These nodes then copy the transaction onto their own ledgers--thus leaving an exact copy across the network.

Of course, this is a very surface-type of explanation of blockchain.

Bitcoin housed the original code for blockchain. Other cryptocurrencies were subsequently created, to compete with the original kingpin of crypto. Once people realized the possibilities outside of digital currency, the technology really took off. From there, it grew into other capacities, to bring us to where we are today.

What in the world is a bitcoin converter? Find out here.