Who is Satoshi Nakamoto
To truly understand bitcoin, we first have to understand the group behind it.
You see, Satoshi Nakamoto is the pseudonym for the person or people who designed the original bitcoin protocol all the way back in 2008. He, she, or they also launched the entire network back in 2009 and in turn, held responsible for creating the majority of the official bitcoin software.
Of course, as with any pseudonym, there have been countless speculations of who this person or group of people might be, with real investigations being made by The New Yorker and even Fast Company, both of which brought up possible candidates.
However, the involvement of Satoshi Nakamoto stops at around 2010 to 2011, where Nakamoto communicated that he, she, or they had moved on to other things at the time.
Bitcoin is essentially a digital currency originally created in 2009. It follows the ideas set in the whitepaper by Satoshi Nakamoto. Bitcoin offers the promise of lower transaction fees than any traditional payment mechanisms out there, including FIAT currencies, and is fully decentralized.
FIAT currencies are currencies that are accepted by a government for paying taxes or dept, but it is not pegged to or backed directly by gold or other valuables.
Bitcoin is a cryptocurrency that has no physical bitcoins, but balances that are kept on a public ledger that everyone has access to view.
All of the bitcoin transactions are then verified by computing power, people, or organizations you might know as miners. As such, bitcoins are not issued by banks or governments and they are not valuable as a commodity. Bitcoin as a system is a collection of computers that all run bitcoin code and store its blockchain.
The blockchain is essentially a collection of blocks. All of the computers running the blockchain have the same list of blocks and transactions and can clearly see the new blocks being filled with new bitcoin transactions.
As such, this is a system that cannot be manipulated. It is important to note that just about anyone can see these transactions occur live, even if they do not run a bitcoin node themselves and are not miners.
A transaction is a transfer of value between Bitcoin wallets that gets included in the blockchain itself. A bitcoin wallet keeps a secret piece of data known as a private key or a seed that is later on used to sign transactions and provide mathematical proof that the bitcoin has indeed come from the owner of the wallet itself.
The signature is also there to prevent the transaction from being altered by anybody else once it has been issued. All of these transactions are broadcasted to the network and typically are confirmed within 10 minutes through the process of mining.
In order for the system to be cheated, or a piece of information to be manipulated, the specific group or people that want to do so would need to operate 51% or more of the computing power that makes up the bitcoin, which is impossible. As of February of 2021, Bitcoin has over 12.000 Nodes.
Let’s talk about how the balances are kept…