From Mr. Bitcoin
What is Bitcoin:Definition:
“Bitcoin is a non-debt based, irreversible, digital asset, with an intrinsic value in the security and inclusion of the payment system and decentralized governance structure that runs on a global transparent ledger on open networks like the Internet.”
- Non-Debt Based, There is no lone connected like a piece of Gold. The opposite would be value of paper money, not coins, is a lone paper form the central bank and digital money is a what the bank own or has lent you.
- Irreversible, Once a transaction is done there is no going back. No one can delete a transaction just, create a new transaction to send the value back.
- Digital asset, The thing (asset) is bits and bytes on a computer (digital) not physical.
- Intrinsic, The Origin is a medical term, not a financial. It means you need something to get a function ex. you need a knee to bend your leg. In this case you need security, inclusion and agreed decentralized governance structure to get value.
- Security, The strength of the system.
- Inclusion, How many can take part in this system
- Decentralized, no singe point of failure can stop or hurt the system in anyway.
- Governance structure, Who is in charge, if anyone and what are the rules (law).
- Transparent, anyone can see or look up all the information that is available for system.
- Ledger, a record of all inputs / transactions.
The features of Bitcoin are: The features organizations want: Open Source Closed Source Global Local 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 BitcoinThe Internet of money or IoM like IoT (Internet of things), a currency / value token that can buy gods and services globally using the Internet.The value token network that runs on the Internet with sets or blocks of transaction data packaged and blocks are built on top of each other to locked them in sequential order.Digital assets / money that is programmable and can be self regulated.
- Only 21 million bitcoins will ever exist.
- The consensus algorithm is Proof of Work.
- The lowest denomination of bitcoin is 1 Satoshi. There are 100 million Satoshi’s to every bitcoin. That is 8 numbers behind the coma, (1 Satoshi = 0,00000001 Bitcoin).
- Every Satoshi can be programed to carry 256 characters.
- Bitcoin is run decentralized on a flat structure as opposed to a centralized hierarchical structure.
- Bitcoin is design to be the senders “push transaction” and that no entity like banks, governments or 3rd party can stop a sender from pushing transaction to be executed. In effect the sender is the ultimate authority and decides who he or she pays value to.
- 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 sours and the code is available on GitHub.
- The difficulty parameter, that is built into the software, is adjusted every 2016 blocks to change to try and keep a 10-minute block time on average based on the blockchain performance the last 2016 blocks.
- Hashing is a brute-forced mechanism by the miners (supercomputers with ASIC CPU’s (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:
- 1 guess = 1 hash
- 1024 hash = 1 Kilohash
- 1024 kilohash = 1 Megahash
- 1024 Megahash = 1 Gigahash
- 1024 Gigahash = 1 Terahash
- 1024 Terahash = 1 Petahash
- 1024 Petahash = 1 Exahash
- Side note:
- 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. 0.17.1 the block size limit is set to 1 Mbite of transaction data.
- Many new proposals of software with larger block size have been set on the network backwards compatible with Bitcoin Core.
- To change the current software (Hard fork) 75% of miners need to be mining on to the new software. At the time when 75% is reached, there will be "Grace period" of 1,209,600 second (two weeks) before the new features will be in effect and the Hard fork is completed. This acording to BIP0101.
Bitcoin History Facts
- 1982, - David Chaum wrote a paper on eCash: "Blind Signatures for Untraceable Payments".
- 1997, May - Adam Back invents Hashcash.
- 1998, - Nick Sabo makes Bit Gold.
- 1998, November - Wei Dai outlines B-Money.
- 2004, - Hal Finney makes Reusable Proof of Work.
- 2008, August 18th. at 01:19:55 PM - The domain name "Bitcoin.org" was registered.
- 2008, October 31st. - The "Bitcoin: A Peer-To-Peer Electronic Cash System" white paper surfaced.
- 2008, November 09th. - The Bitcoin project was registered at the open-source-projects community resource, SourceForge.net.
- 2009, January 03rd. at 06:15:05 PM - The Bitcoin blockchain started with the Genesis Block.
- 2009, January 09th. at 02:54:25 AM - The Second Block, "Block #1" was added to the Bitcoin Blockchain.
- 2009, January 09th. - Satoshi Nakamoto releases the Bitcoin Core v0,1 software for downlode on bitcoin.org .
- 2009, January 12th. at 03:30:25 AM - The first Bitcoin transaction happened, other than mining, in "Block #170" for 10 Bitcoins from Satoshi Nakamoto to Hal Finney.
- 2009, December 30th. at 06:11:04 AM - The first Blockchain difficulty change happened in "Block #32256". This happen after 15 potential difficulty changes before it. The actually change from 1 to 1.18, indicating that there where quite few maskings mining before this stage.
- 2009, December 31st. at 11:59:59 - The Price of Bitcoin was $0,00 USD.
- 2010, February 6th. - Bitcoin Market, the first official cryptocurrency stock exchange, is launched.
- 2010, May 22nd. - First online purchase using bitcoin. Laszlo Hanyecz (indireclty) buys Papa John's pizza for 10,000 coins (25 USD – Bitcoin value was 0.0025 cents for 1 coin).
- 2010, October 7th. - Bitcoin exchange rate begins to escalate, after several months stuck at USD $0.06 per BTC.
- 2010, December 16th. - First block generated by mining pool under user sluch.
- 2010, December 31st. at 11:59:59 - The Price of Bitcoin was $ 0,30 USD.
- 2011, January - The Electronic Frontier Foundation (EEF), a non-profit group, started accepting bitcoins.
- 2011, June - WikiLeaks and other organizations began to accept bitcoins for donations.
- 2011, June 2nd. - USD to BTC rate is 10 USD to the coin. For 6 days, the Bitcoin value is fixed at 31.91 USD on MtGox.
- 2011, December 31st. at 11:59:59 - The Price of Bitcoin was $ 4,60 USD.
- 2012, November - WordPress had started accepting bitcoins.
- 2012, November 28th. - The reward to miners halved to 25 bitcoins in "Block #210 000".
- 2012, December 31st. at 11:59:59 - The Price of Bitcoin was $ 13,62 USD.
- 2013, October - The FBI seized roughly 26,000 BTC from website Silk Road during the arrest of alleged owner Ross William Ulbricht.
- 2013, November - The University of Nicosia announced that it would be accepting bitcoin as payment for tuition fees.
- 2013, November 30th. - A Bitcoin All Time High as set, was set at $ 1 156,14 USD.
- 2013, December 31st. at 11:59:59 - The Price of Bitcoin was $ 754,01 USD.
- 2014, February - Mt. Gox had filed for bankruptcy protection in Japan amid reports that 744,000 bitcoins had been stolen.
- 2014, December - Microsoft began to accept bitcoin to buy Xbox games and Windows software.
- 2014, December 31st. at 11:59:59 - The Price of Bitcoin was $ 320,19 USD.
- 2015, December 31st. at 11:59:59 - The Price of Bitcoin was $ 430,57 USD.
- 2016, July 10th. - The reward to miners halved to 12,5 bitcoins in "Block #420 000".
- 2016, December 31st. at 11:59:59 - The Price of Bitcoin was $ 963,74 USD.
- 2017, February 09th. - The price of one bitcoin is approximately $1070, - USD roughly 8900, - NOK.
- 2017, February 09th. - The Bitcoin Blockchain is running at approximately 4 ExaHash per second, that is 4.123.814.017.485.500.000 guesses per second.
- 2017, August 01st. - The Bitcoin / Bitcoin Cash Hard fork in "Block #478 558".
- 2017, December 17th. - The Bitcoin All Time High, at this moment, was set at $ 20 089,00 USD.
- 2017, December 31st. at 11:59:59 - The Price of Bitcoin was $ 14 156,40 USD.
- 2018, December 31st. at 11:59:59 - The Price of Bitcoin was $ 3 742,70 USD.
- * 2020, May 25th. - The reward to miners halved to 6,25 bitcoins in "Block #630 000".
- * 2024, February - The reward to miners halved to 3,125 bitcoins. in "Block #840 000".
- * 2140, - All Bitcoins will have been mined and there are no more rewards, however the transaction fee will be incentive for the miners to continue.