Aditya Madanapalle May 03, 2016 14:58:55 IST
Bitcoin trading is in its highest volumes ever, Steam just started accepting Bitcoin as payment, and Australian security researcher Craig Wright just confirmed his identity as Satoshi Nakamoto, the mysterious and elusive creator of Bitcoin. This is a quick recap of the history of Bitcoin.
1997: Adam Back conceptualises hashcash. This is underlying technology for Bitcoin mining. Hashcash is a proof of work system that uses random computer processing, or burnt CPU cycles for different applications. The main use of this technology is to prevent excessive spam and restrict the damage caused by denial of service attacks. Hashcash is most notably and widely used for the Bitcoin mining algorithm.
2008: The early phase of Bitcoin, just before the introduction and implementation. The domain Bitcoin.org is registered at this time, through a service that allows users to anonymously register web domains. Satoshi Nakamoto publishes a paper titled bitcoin: A Peer-to-Peer Electronic Cash System (PDF). This gives an outline of the the peer to peer cryptocurrency, based on artificial digital scarcity.
2009: The genesis block is mined, the first block of Bitcoin ever, and the start of the Bitcoin blockchain. It has 50 Bitcoin. The Bitcoin Project hits SourceForge. The first Bitcoin transaction takes place between Satoshi Nakamoto and Hal Finney. The latter is going to be important years later. Pizza is one of the first things purchased with Bitcoin. Late in the year, an exchange rate is established, based on the amount of computer resources and electricity that is needed to mine Bitcoin.
2010: A major vulnerability in the blockchain used to verify transactions is spotted, and promptly exploited. The vulnerability is patched, the network forked to a new version, and the billions of Bitcoins generated by the exploit erased from the record. The first Bitcoin transaction on a mobile device happens. Nakamoto's involvement with Bitcoin reduces considerably.
2011: Bitcoin reaches parity with the US dollar early in the year, but the bubble bursts and the prices remain low for the rest of the year. Mike Caldwell starts minting physical Bitcoin, called Casascius coins. Nakamoto releases a statement, saying that he has moved on to other projects. The hunt for Satoshi Nakomoto starts in earnest. The New Yorker speculates that Nakamoto is a cover for Dr. Vili Lehdonvirta, a social economist working with virtual economies and Michael Clear, a researcher of cryptography and internet security. Both deny that they are Nakamoto, in singular or in plural. A Fast Company article speculates that Neal King, Vladimir Oksman and Charles Bry are together Nakamoto. This guess is based on similar wording in the Bitcoin whitepaper released by Nakamoto, and a patent application filed by the three "suspects". The timing of the patent application is also suspiciously close to the date of registration of the Bitcoin.org domain. All three deny that they are Nakamoto, and the search continues. Block 157235 has the largest ever fee, 171 Bitcoin is exchanged in a single transaction.
2012: An FBI report showing concerns over use of Bitcoin for illegal activity, including trafficking of drugs and weapons, gets leaked. WordPress starts accepting Bitcoin as payment. Bitcoin value slowly rises throughout the year because of European economic troubles. The largest block, 181919 tracks 1,322 transactions.
2013: The University of Nicosia in Cyprus begins to accept Bitcoin as fees from students. China bans Bitcoin. Ted Nelson, information technology pioneer and sociologist uploads a YouTube video, where he theorises that Japanese mathematician Shinichi Mochizuki is Nakamoto. There are unreliable reports claiming that Mochizuki also denies being Nakamoto. There are clues based on the analysis of the kind of words and phrases used in the Bitcoin Whitepaper, that Nakamoto is not Japanese. Vice notes in an article listing all the suspects till, that Nakamoto alternates between US English and UK English words and phrases, which could mean that Nakamoto is deliberately masking his identity, or that it is a moniker for a group of people. Vice's lists of suspects includes those associated with Bitcoin in various ways, including Gavin Andresen, the lead developer of Bitcoin and Jed McCaleb, the founder of Mt. Gox, one of the largest Bitcoin exchanges. Studying the language and style of Nakamoto becomes a favorite passtime for sleuths on the hunt for the elusive Bitcoin founder. Skye Grey uses these techniques, to guess that the Bitcoin creator is Nick Szabo. Szabo is a developer who has posted articles relating to cryptocurrencies before the advent of Bitcoin. Szabo frequently and repeatedly denies he is Nakamoto.
2014: Zynga announces that it is testing Bitcoin for in game purchases on seven of its titles. Casinos in Las Vegas also start accepting Bitcoin. Efforts to find Nakamoto continue in 2014, with Newsweek identifying Dorian Satoshi Nakamoto as the same person who used the name Satoshi Nakamoto. The article has a long and in-depth profile of the wrong man. The same article carries a denial from Dorian S Nakamoto. Hal Finney, the first person to engage in a Bitcoin transaction with the unknown Satoshi Nakamoto, and who confusingly lives close to Dorian S Nakamoto, is also suspected to be Nakamoto. Investigations by Forbes reporters shows a good match between Finney's writings and Nakamoto's whitepaper.
2015: Law enforcement authorities are accused of stealing Bitcoin as part of Silk Road investigations. EU rules that bitcoin transactions are exempted from VAT. The Bitcoin network is forked, with an update that allows for blocks larger than 1MB in size. This tackles a scalability issue in the system. Wired follows the digital trail of Satoshi Nakamoto, and ends up identifying Craig Steven Wright as the creator of Bitcoin. The article uses blog entries, and archived copies of deleted posts that seem to have prescient knowledge of Bitcoin developments.
2016: Steam starts letting users buy games using Bitcoin. The move is aimed at gamers from emerging markets without access to traditional payment methods. Australian Craig Wright claims to be Bitcoin creator Satoshi Nakamoto. The Wired article from 2015, has another tantalizing possibility, that Wright is leaving around clues in a deliberate effort to confuse people into thinking he is Nakamoto. For those unconvinced by his demonstrations, the search continues, and may never be over.
There never was any doubt over the secret identity of Shibetoshi Nakamoto, the creator of Dogecoin. It is Billy Markus, a developer from the US.
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