Bitcoin celebrates 11th birthday
On 31 October 2019, Bitcoin celebrated the 11th anniversary of the publication of its seminal whitepaper by anonymous creator(s) Satoshi Nakomoto to a small group of cryptography enthusiasts.
It was a slow start from there, with Bitcoin's genesis block being mined in January of 2009, and the first recorded trading price being noted on Mar. 17, 2010 — on the now-defunct trading platform bitcoinmarket.com, at a value of $0.003.
Running to a mere 9 pages, the Bitcoin whitepaper remains an influential publication, and has formed the basis of much of our modern debates on how our relationship between technology, finance, money and decentralisation should be framed.
The problems with legacy financial networks outlined in the whitepaper remain true today:
While the system works well enough for most transactions, it still suffers from the inherent weaknesses of the trust based model. Completely non-reversible transactions are not really possible, since financial institutions cannot avoid mediating disputes. The cost of mediation increases transaction costs, limiting the minimum practical transaction size and cutting off the possibility for small casual transactions, and there is a broader cost in the loss of ability to make non-reversible payments for nonreversible services. With the possibility of reversal, the need for trust spreads. Merchants must be wary of their customers, hassling them for more information than they would otherwise need. A certain percentage of fraud is accepted as unavoidable.
Without the Bitcoin Whitepaper, who knows whether global regulators and legislators would even be debating the merits of digital currencies issued by private companies versus central banks, and certainly China would not have been rushing to bring Blockchain into all aspects of their economy.
The acceleration of blockchain technology adoption is gathering pace and it will be fascinating to look back in 11 years and see how much further we have traveled.