Hacks and SecurityThere have been several instances where centralized Bitcoin exchanges and wallets have been hacked, resulting in the loss of Bitcoins for the affected users. It is important for users to take steps to protect their Bitcoin and keep their wallets secure and not trust centralized exchanges.
|The features of Bitcoin are:||The features organizations want:|
|Open Source||Closed Source|
|Immutable permanent ledger||Editable ledger (for correcting slipups)|
|Permission-less (anyone can join)||Permission (Only for verified customers)|
|Censorship resistant||Censored (think about sending value to WikiLeaks)|
|Decentralized / Flat structure||Centralized / Hierarchical structure|
|Pseudonymous||Control Identity / KYC|
|Proof of work consensus||Proof of Stake / PoAuthority / PoState|
|Innovate without permission||Controlled team of innovators|
|This is Bitcoin.||This is not Bitcoin|
- The lowest denomination of bitcoin, for now, is 1 Satoshi. There are 100 million Satoshis to every bitcoin. That is 8 numbers behind the coma, (1 Satoshi = 0,00000001 Bitcoin).
- Only 20 999 999,99755530 or fewer bitcoins will ever exist. The 32 rounds of halving accumulate to 20 999 999,99755530 IF we do not decide to go sub-Satoshi or change the rules of Bitcoin. Also, the miners can choose the reward up to the current reward level and not necessarily take the full reward.
- The consensus algorithm is Proof of Work [SHA256] (Secure Hash Algorithm 256).
- Bitcoin is run decentralized on a flat structure as opposed to a centralized hierarchical structure.
- Bitcoin is designed to be the sender's “push transaction” and no entity like banks, governments, or 3rd parties can stop a sender from pushing transactions to be executed. In effect, the sender is the ultimate authority and decides to who he or she pays the value.
- The Bitcoin code has never been successfully hacked, but we have seen many examples of centralized wallets that have been broken into (Hacked).
- The software is open source and the code is available on GitHub.
- The difficulty parameter, which is built into the software, is adjusted every 2016 block to change to try and keep a 10-minute block time on average based on the blockchain performance of the last 2016 blocks.
- Hashing is a brute-forced mechanism by the miners (supercomputers with ASIC CPUs (Application Specific Integrated Circuits Central Processing Units)) guessing the right combination.
- An executed SHA256 hash is one try to guess the right combination on the complex lock holding the blocks together.
- Side note:
|Hash||Equals =||Nonce guesses|
|1024 Hashes||1 KiloHash||1024|
|1024 KiloHashes||1 MegaHash||1 048 576|
|1024 MegaHashes||1 GigaHash||1 073 741 824|
|1024 GigaHashes||1 TeraHash||1 099 511 627 776|
|1024 TeraHashes||1 PetaHash||1 125 899 906 842 620|
|1024 PetaHashes||1 ExaHash||1 152 921 504 606 850 000|
- As of 30th of January 2023 the blockchain is running at approximately 281,42 ExaHashes per second.
- The miners get rewarded for the blocks that they solve and broadcast to the rest of the network first.
- Every 210.000 blocks the miner reward gets halved.
- In the current bitcoin software, Bitcoin Core ver. 0.22.0 the block size limit is set to 1 Mbit of transaction data.
- Many new software proposals with larger block sizes have been set on the network backward compatible with Bitcoin Core.
- To change the current software (Hard fork) 75% of miners need to be mining onto the new software. When 75% is reached, there will be a "Grace period" of 1,209,600 seconds (two weeks) before the new features will be in effect and the Hard fork is completed. This according to BIP0101.
Bitcoin History; Why decentralization is the key to Bitcoin's success
David Chaum, an American computer scientist and cryptographer, is widely recognized as the inventor of digital cash and a pioneer in cryptography and privacy-preserving technologies. The history of cryptocurrency traces its roots back to Chaum's invention of an encrypted system of money called eCash in 1982, which he later followed up with the development of an additional secure transaction system named DigiCash twelve years later in 1995.
However, the journey towards digital cash and privacy-preserving technologies began with Chaum's paper "Blind Signatures for Untraceable Payments," which was first published in 1982. The paper laid the groundwork for research into encrypted communication over the internet, which eventually led to privacy-preserving technologies like Tor the dark net browser. Chaum's paper introduced the concept of blind signatures, a cryptographic technique that allowed a user to sign a message without revealing its content. This technique was the basis of Chaum's eCash, a system that allowed users to make payments over the internet without revealing their identity.
Chaum's eCash system was based on a combination of public-key cryptography and blind signatures, and it provided users with a high degree of anonymity and privacy. The system used digital tokens that could be exchanged between users and merchants, and the tokens were designed to be untraceable. However, despite the potential of eCash, the system failed to gain widespread adoption due to the lack of infrastructure and the difficulty of implementing the system.
The concept of digital cash continued to evolve over the next two decades, with various attempts to develop systems that would provide users with privacy and anonymity. One notable example is the development of Bitcoin, which was first introduced on January 3, 2009. Bitcoin was designed to provide users with a decentralized, peer-to-peer payment system that allowed for anonymous transactions without the need for a trusted intermediary.
The significance of decentralization in the digital cash attempts before Bitcoin lies in the fact that earlier attempts traded decentralization for simplicity, relying on centralized servers to prevent double-spending, making them susceptible to censorship and seizure. However, Bitcoin, created by the pseudonymous Satoshi Nakamoto in 2009, achieved full decentralization, allowing for censorship resistance, and immunity to seizure, while providing a push system for fast and easy transactions.
The concept of digital cash was not new, with early attempts made in the late 1980s in the Netherlands and developments in the 1990s by computer scientists such as David Chaum, Nick Szabo, Wei Dai, and Adam Back. However, these attempts were not fully decentralized, and it was not until the advent of blockchain technology and the creation of Bitcoin that a viable, trustless, and fully decentralized digital currency was made possible.
Bitcoin's success can be attributed to its unique combination of full decentralization, immutability, transparency, and limited supply, which has led to widespread adoption, use as an alternative store of value, and investment asset. While the China ban on Bitcoin mining in 2021 caused a temporary drop in price, the network recovered its hashrate in record time and gained in decentralization. Bitcoin's adoption as legal tender in El Salvador in 2021 and its consideration by Panama further demonstrate the growing acceptance of cryptocurrencies worldwide.
In conclusion, Bitcoin's success can be attributed to its full decentralization, which allows for censorship resistance, and immunity to seizure, as well as its unique combination of immutability, transparency, and limited supply. Earlier attempts at digital cash traded decentralization for simplicity, making them susceptible to censorship and seizure. While the concept of digital cash was not new, it was not until the advent of blockchain technology and the creation of Bitcoin that a viable, trustless, and fully decentralized digital currency was made possible.
Bitcoin History Facts
|1982||David Chaum||Wrote a paper on eCash: "Blind Signatures for Untraceable Payments"|
|1997||May||Adam Back||Inventet Hashcash|
|1998||Nick Szabo||Makes Bit Gold|
|1998||November||Wei Dai||Outlines B-Money|
|2004||Hal Finney||Makes reusable Proof of Work (PoW)|
|2008||August||18||01:19:55 PM||unknown||The domain name "Bitcoin.org" was registered|
|2008||October||31||02:10:00 PM (EDT)||Satoshi Nakamoto||The "Bitcoin: A Peer-To-Peer Electronic Cash System" white paper surfaced|
|2008||November||9||Satoshi Nakamoto||The Bitcoin project was registered at the open-source-projects community resource, "SourceForge.net"|
|2009||January||3||06:15:05 PM||Satoshi Nakamoto||The Bitcoin blockchain started with the Genesis Block|
|2009||January||9||02:54:25 AM||Satoshi Nakamoto||The Second Block, "Block #1" was added to the Bitcoin Blockchain|
|2009||January||9||Satoshi Nakamoto||Releases the Bitcoin Core v0,1 software for download on "bitcoin.org"|
|2009||January||11||04:33:00 PM||Hal Finney||Twitted "Running bitcoin" which was the first-ever Bitcoin-related tweet|
|2009||January||12||03:30:25 AM||Satoshi Nakamoto||The first Bitcoin transaction happened, other than mining, in "Block #170" for 10 Bitcoins to Hal Finney|
|2009||December||30||06:11:04 AM||unknown||The first Blockchain difficulty change happened in "Block #32256". This happened after 15 potential difficulty changes. The actually change from 1 to 1.18, indicating that there were quite few machines mining before this stage|
|2009||December||31||11:59:59 PM||Bitcoin||The Price of Bitcoin was $0.00 USD|
|2010||February||6||unknown||"Bitcoin Market", the first official cryptocurrency exchange, is launched|
|2010||May||22||Laszlo Hanyecz||First online purchase using bitcoin. Laszlo buys Papa John's pizza for 10 000 coins (25 USD – Bitcoin value was 0.0025 cents for 1 Bitcoin)|
|2010||October||7||Bitcoin||Bitcoin exchange rate begins to escalate, after several months stuck at USD $0.06 per Bitcoin|
|2010||December||16||sluch||First block generated by mining pool under user sluch|
|2010||December||31||11:59:59 PM||Bitcoin||The Price of Bitcoin was $0.30 USD|
|2011||January||unknown||The Electronic Frontier Foundation (EEF), a non-profit group, started accepting Bitcoins|
|2011||March||1||Jed McCaleb||Sells mtgox.com to Mark Karpelès (@MagicalTux on Twitter)|
|2011||March||22||WeUseCoins||Releases the viral video "What Is Bitcoin?" which you can view on the top of this page and has 9.5 million views|
|2011||June||Julian Assange||WikiLeaks and other organizations began to accept bitcoins for donations|
|2011||June||2||Bitcoin||For 6 days, the Bitcoin value is fixed at $31.91 USD on MtGox|
|2011||December||31||11:59:59 PM||Bitcoin||The Price of Bitcoin was $4.60 USD|
|2012||November||WordPress||Started accepting bitcoins|
|2012||November||28||Bitcoin||The reward to miners halved to 25 bitcoins in "Block #210 000"|
|2012||December||31||11:59:59 PM||Bitcoin||The Price of Bitcoin was $13.62 USD|
|2013||October||Ross William Ulbricht||The FBI seized roughly 26 000 BTC from website Silk Road during the arrest of alleged owner Ross Ulbricht|
|2013||October||31||WAVES Coffee House||The World's First Bitcoin ATM (BTM) was open for business at WAVES Coffee House 900 Howe St. #100. Vancouver, BC V6Z 2M4 Canada|
|2013||November||University of Nicosia||Announced that it would be accepting bitcoin as payment for tuition fees|
|2013||November||30||Bitcoin||A Bitcoin All-Time High was set, was set at $1 156.14 USD|
|2013||December||31||11:59:59 PM||Bitcoin||The Price of Bitcoin was $754.01 USD|
|2014||February||Mark Karpelès||Mt. Gox had filed for bankruptcy protection in Japan amid reports that 744 000 Bitcoins had been stolen|
|2014||December||Bill Gates||Microsoft began to accept Bitcoin to buy Xbox games and Windows software|
|2014||December||31||11:59:59 PM||Bitcoin||The Price of Bitcoin was $320.19 USD|
|2015||December||31||Bitcoin||The Price of Bitcoin was $430.57 USD|
|2016||July||10||06:46 PM||Bitcoin||The reward to miners halved to 12,5 bitcoins in "Block #420 000"|
|2016||December||31||11:59:59 PM||Bitcoin||The Price of Bitcoin was $963.74 USD|
|2017||February||9||Bitcoin||The price of one bitcoin is approximately $1070.00 USD (roughly 8900,00 NOK)|
|2017||February||9||Bitcoin||The Bitcoin Blockchain is running at approximately 4 Exahash per second, which is 4 611 686 018 427 390 000 guesses per second|
|2017||August||1||Bitcoin Cash (BCH)||The Bitcoin / Bitcoin Cash Hard fork in "Block #478 558"|
|2017||December||17||Bitcoin (BTC)||The Bitcoin All-Time High, at this moment, was set at $20 089.00 USD|
|2017||December||31||11:59:59 PM||Bitcoin (BTC)||The Price of Bitcoin was $14 156.40 USD|
|2018||December||31||11:59:59 PM||Bitcoin (BTC)||The Price of Bitcoin was $3 742.70 USD|
|2019||April||12||Bitcoin (BTC)||The Bitcoin Blockchain is running at approximately 47.68 Exahash per second, which is 54 975 581 388 800 000 000 guesses per second|
|2019||September||18||Bitcoin (BTC)||The Bitcoin Blockchain is running at approximately 98.08 Exahash per second, which is 113 083 380 034 552 000 000 guesses per second|
|2019||December||31||11:59:59 PM||Bitcoin (BTC)||The Price of Bitcoin was $ 7 193.60 USD|
|2020||March||1||Bitcoin (BTC)||The Bitcoin Blockchain is running at approximately 129.95 ExaHash per second, which is 149 824 929 968 664 000 000 guesses per second|
|2020||May||11||09:23 PM||F2Pool||A secret message was written into "Block #629 999"; "🐟NYTimes 09/Apr/2020 With $2.3T Injection, Fed's Plan Far Exceeds 2008"|
|2020||May||11||09:23 PM||Bitcoin||The reward to miners halved to 6,25 bitcoins in "Block #630 000"|
|2020||December||31||11:59:59 PM||Bitcoin||The Price of Bitcoin was $29 001.72 USD|
|2021||December||31||11:59:59 PM||Bitcoin||The Price of Bitcoin was $46 306.45 USD|
|2022||December||31||11:59:59 PM||Bitcoin||The Price of Bitcoin was $16 547.50 USD|
|2024||*May||Bitcoin (BTC)||The reward to miners halved to 3,125 bitcoins. in "Block #840 000"|
|* 2139||Bitcoin (BTC)||In block #6 930 000 all Bitcoins will have been mined and there are no more rewards, however, the transaction fee will be an incentive for the miners to continue|
( *=Estimated )Report errors or additions to b(a)mrbitcoin.no
The Bitcoin Halving ProcessThe halving happens every 210 000 Blocks
Bold indicates that it has happen.
|Halving sequence number:||From Block Height:||To Block Height:||Newly Generated Coins per Block:||Total Newly Generated Coins for this period:||Estimated start from:||Estimated end at:|
|Genesis||209999||50,00000000 BTC||10 500 000,00000000 BTC||2009-01-03||2012-11-28|
|1||210000||419999||25,00000000 BTC||5 250 000,00000000 BTC||2012-11-28||2016-07-09|
|2||420000||629999||12,50000000 BTC||2 625 000,00000000 BTC||2016-07-09||2020-05-11|
|3||630000||839999||6,25000000 BTC||1 312 500,00000000 BTC||2020-05-11||2024-05-01|
|4||840000||1049999||3,12500000 BTC||656 250,00000000 BTC||2024-05-01||2028-04|
|5||1050000||1259999||1,56250000 BTC||328 125,00000000 BTC||2028-04||2032-04|
|6||1260000||1469999||0,78125000 BTC||164 062,50000000 BTC||2032-04||2036-04|
|7||1470000||1679999||0,39062500 BTC||82 031,00000000 BTC||2036-04||2040-04|
|8||1680000||1889999||0,19531250 BTC||41 015,62500000 BTC||2040-04||2044-03|
|9||1890000||2099999||0,09765625 BTC||20 507,81250000 BTC||2044-03||2048-03|
|10||2100000||2309999||0,04882813 BTC||10 253,90625000 BTC||2048-03||2052-03|
|11||2310000||2519999||0,02441406 BTC||5 126,95312500 BTC||2052-03||2056-03|
|12||2520000||2729999||0,01220703 BTC||2 563,47656250 BTC||2056-03||2060-02|
|13||2730000||2939999||0,00610352 BTC||1 281,73828125 BTC||2060-02||2064-02|
|14||2940000||3149999||0,00305176 BTC||640,86914063 BTC||2064-02||2068-02|
|15||3150000||3359999||0,00152588 BTC||320,43457031 BTC||2068-02||2072-01|
|16||3360000||3569999||0,00076294 BTC||160,21728516 BTC||2072-01||2076-01|
|17||3570000||3779999||0,00038147 BTC||80,10864258 BTC||2076-01||2080-01|
|18||3780000||3989999||0,00019073 BTC||40,05432129 BTC||2080-01||2083-12|
|19||3990000||4199999||0,00009537 BTC||20,02716064 BTC||2083-12||2087-12|
|20||4200000||4409999||0,00004768 BTC||10,01358032 BTC||2087-12||2091-12|
|21||4410000||4619999||0,00002384 BTC||5,00679016 BTC||2091-12||2095-12|
|22||4620000||4829999||0,00001192 BTC||2,50339508 BTC||2095-12||2099-11|
|23||4830000||5039999||0,00000596 BTC||1,25169754 BTC||2099-11||2103-11|
|24||5040000||5249999||0,00000298 BTC||0,62584877 BTC||2103-11||2107-11|
|25||5250000||5459999||0,00000149 BTC||0,31292439 BTC||2107-11||2111-10|
|26||5460000||5669999||0,00000075 BTC||0,15646219 BTC||2111-10||2115-10|
|27||5670000||5879999||0,00000037 BTC||0,07823110 BTC||2115-10||2119-10|
|28||5880000||6089999||0,00000019 BTC||0,03911555 BTC||2119-10||2123-09|
|29||6090000||6299999||0,00000009 BTC||0,01955777 BTC||2123-09||2127-09|
|30||6300000||6509999||0,00000005 BTC||0,00977889 BTC||2127-09||2131-09|
|31||6510000||6719999||0,00000002 BTC||0,00488944 BTC||2131-09||2135-09|
|32||6720000||6929999||0,00000001 BTC||0,00244472 BTC||2135-09||2139-08|
Follow the countdown to the next halving here on Bitcoin Block Reward Halving Countdown
First version of Bitcoin.org