Bitcoin And CRYPTOCURRENCIES:
Emerging from the planet of cryptography within the mid-2000s, the mysterious Satoshi Nakamoto is attributablebecause the mastermind creator behind bitcoin the currency, and Bitcoin the network.
Is that his real name? Is he Japanese? American? Is he or she, in fact, a lot of people merged under one pseudonym? To this day, no one knows.
As a direct response to the financial crisis of 2008, Satoshi Nakamoto envisioned a new and decentralised digital currency system he called bitcoin. In October 2008, Nakamoto published a paper entitled “Bitcoin: A Peer-to-Peer Electronic Cash System” which detailed a payment system based on chains of data blocks (later to become known as blockchain) and the removal of third parties between transactions.
It came at a perfect time, of course, because a lot of people had lost trust in traditional financial institutions due to the crisis. Nakamoto’s proposal detailed how the new system would function without financial institutions, how a peer-to-peer network would resolve the issue of double spending and what this new system would mean for transactional privacy.
A few years after his proposal, Satoshi Nakamoto stopped being involved in the development of bitcoin and completely disappeared from all public forums.
Decentralisation & The Peer-to-Peer (P2P) Network
The core principle of decentralisation is the removal of a central, controlling body, whether that be an entity in the form of a financial institution (i.e. a bank), a “trusted third party” in the form of a payment provider, or an individual middle-man between the sender and the receiver of a transaction.
One type of decentralised system like this has existed for many decades. Known as peer-to-peer – P2P for short – this network consists of, in its most simplified definition, two or more computers connected to one another and sharing all types of data. Torrent file-sharing, which is widespread and allows users to download music, movies, documents and other types of files, is based on a P2P network.
P2P technology has a long history. As a fault-tolerant network, P2P was initially designed for the purpose of transmitting military messages without any vulnerability to human fatality, natural phenomena or technical malfunction. Its primary feature is its autonomy – in other words, its inherent decentralised nature.
A P2P network has no centralised authority or regulatory entity that monitors, facilitates or controls any of the data that is shared between the two peers.
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