Bitcoin is protected by encryption, and it is classified as a crypto asset. Bitcoin is one of the earliest digital currencies to use Peer-to-Peer (P2P) technology to allow immediate transactions.
Bitcoin “miners,” who own the governing computing power and participate in the bitcoin network, are responsible for processing transactions on the blockchain and are given rewards (for the release of new bitcoin) and transaction fees paid in bitcoin.
This article will discuss how bitcoin works, the founder of bitcoin, his net worth, and much more.
A brief about bitcoin
Bitcoin is decentralised digital money and is protected by encryption. It was first introduced in January 2009. It’s based on Satoshi Nakamoto’s ideas, laid out in a whitepaper. There is no real bitcoin; instead, balances are stored on a public ledger that everyone can see (although each record is encrypted). It uses a vast amount of computational power to verify all bitcoin transactions through a process known as “mining.”
The identity of the person or people who developed the technique is anonymous. Bitcoin, unlike government-issued currencies, promises lower transaction fees and is controlled by a decentralised authority. The bitcoin system consists of a network of computers (also known as “nodes” or “miners”) that execute bitcoin’s code and store its blockchain.
Each block contains a set of transactions. Nobody can deceive the system because any computer running the blockchain has the same list of blocks and transactions and can see these new blocks filled with recent bitcoin transactions in real-time.
These transactions can be seen in real-time by anyone, regardless of whether they run a bitcoin “node.” A bad actor, player, participant, or miner would need to control 51% of the processing power that makes up bitcoin to do any unethical acts. As of September 2021, bitcoin has roughly 11,300 complete nodes, with more on the way, making such an attack highly implausible.
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Founder of bitcoin
Satoshi Nakamoto is the pseudonym for the person who wrote the initial bitcoin whitepaper. He is known for developing bitcoin. The bitcoin crypto asset’s inventors employ Satoshi Nakamoto’s name to remain anonymous. Despite various people claiming to be Satoshi, his genuine identity has never been confirmed or exposed. Based on bitcoin’s current price, Satoshi would be a billionaire today and continue to be in future.
It is still unknown if the bitcoin founder’s name relates to a single person or a group. It is known that Satoshi Nakamoto wrote a paper in 2008 that catapulted crypto asset development. When Nakamoto posted his famous whitepaper on a cryptography mailing group, detailing a digital currency that would allow safe, peer-to-peer transactions without the involvement of any middleman, such as the government, financial system, or a firm, bitcoin was born.
These transactions would be tracked using blockchain, a ledger similar to those used by financial institutions, except that it would be distributed throughout an entire network, with exact duplicates kept by all participants and visible to all, and it would be safeguarded by cryptographic means. There will never be a total of more than 21 million bitcoin in circulation.
The smallest unit of bitcoin is known as a Satoshi, and it is divisible to eight decimal places (100 millionths of a bitcoin). If necessary and if the participating miners accept the change, bitcoin may someday be made divisible to even more decimal places.
The purpose of Nakamoto’s crypto asset was to take control of cash away from banking elites and place it in the hands of ordinary people. When Satoshi Nakamoto handed over ten bitcoin to Hal Finney, a well-known developer who had downloaded the bitcoin software on the day it was released, it was recorded as the first transaction.
They are Supposedly said to be bitcoin founders.
Craig Wright, an Australian, claimed to be Satoshi in 2016, and bitcoin developer Andresen backed up his claim, claiming he was “98 per cent convinced” that Wright was the elusive Satoshi. The bitcoin community was outraged, and Wright recanted his statements.
Nick Szabo, a reclusive crypto specialist who played a vital role in the invention of bitcoin, was also a target of suspicion. Linguistic experts studied Szabo’s writing and that of other Satoshi suspects. The linguists stated that Szabo’s papers and the bitcoin founder’s writings were strikingly similar.
Although Szabo has categorically disputed the allegations, the New York Times even named Szabo the enigmatic Nakamoto.
Efforts to determine Satoshi Nakamoto’s identity will undoubtedly continue. He offers far too much of a threat to the bitcoin industry, and the mystery surrounding his identity is far too alluring. Satoshi Nakamoto has kept his secrets beyond imagination in a world where anonymity is becoming harder to maintain.
How was bitcoin invented?
A pseudonymous individual known as Satoshi Nakamoto presented the concept of bitcoin to the world on October 31, 2008, during the height of the financial crisis. “Bitcoin P2P e-cash document,” Nakamoto wrote on a cryptography mailing list. He also linked a white paper titled “Bitcoin: A Peer-to-Peer Electronic Cash System” in the email.
Nakamoto outlined the notion of bitcoin as a decentralised, digital currency in these writings. Decentralisation means that instead of having a single administrator, there is a public ledger of transactions that anybody can record on their computer.
The blockchain officially started when the first block, known as the genesis block, was mined on January 3, 2009. The first test transaction happened a week after that.
On May 22, 2010, a Florida man bought two $25 Papa John’s pizzas delivered for 10,000 bitcoin. This purchase was the first economic transaction that took place. The first real-world price or value of bitcoin was set at four bitcoin per penny due to this transaction.
The earliest Bitcoin transactions were ‘negotiated’ on online forums, with people trading assets and services for bitcoin. Then, starting in 2011, miners and coders began to build additional networks, such as Ethereum and Litecoin, and modify the code behind bitcoin’s blockchain, adapting it for other uses.
This effort was probably the most high-profile attempt to discover bitcoin’s creator. Dorian Nakamoto was named as the currency’s founder by Newsweek in March 2014. The article’s publishing caused a stir in the crypto and tech communities because it was the first time a mainstream journal attempted to uncover the identity of bitcoin’s founder.
Satoshi Nakamoto and Dorian Nakamoto
According to Newsweek, Satoshi Nakamoto and Dorian Nakamoto share some similarities. Both, for example, were said to be libertarians with ties to Japan. (Dorian is Japanese-American and has worked on classified security programmes after graduating from California Polytechnic State University with a degree in physics.) According to the creator of the paper, Satoshi Nakamoto stated that he was “no longer” involved with bitcoin and had “handed it over” to others.
Nick Szabo is a law
scholar as well as a computer engineer. In a 1996 paper, he is credited with being the first to propose the idea of smart contracts. He proposed Bit Gold, a forerunner to bitcoin, as a decentralised currency in 2008.
Bit Gold, he explained, is a mechanism for creating unforgeable expensive bits online with little reliance on trusted third parties. It is comparable with the bitcoin concept; transactions are verified and validated via a series of bits created by a network of computers without a leader.
In the book Bitcoin: The Future of Money?, author Dominic Frisby advances that Nick Szabo is Satoshi Nakamoto, the bitcoin founder.
The net worth of bitcoin’s founder
Bitcoin is already worth more than $1 trillion, and while Nakamoto’s identity may be merely a matter of conjecture for some, it holds far more significance for others. Satoshi owns over a million bitcoin, with a current market worth roughly $60 billion.
This equates to roughly 5% of the total bitcoin currently in circulation. Even though this net-worth figure is an estimate and the exact net worth is unknown, it is expected to climb even more after Tesla spent $1.5 billion in crypto assets.
Sergio Demian Lerner, the creator of RSK, started digging in 2013 to see how much bitcoin Satoshi had mined and how much of it was still residing in those wallets. Several researchers have now backed up; it was a lot!
Sergio’s initial projection was based on the rationale that the rate remained at a low of 7 million hashes per second for virtually the entire year of 2009. This seems to support the theory that at the time, a loan miner was the only one contributing to the network.
Sergio also pointed out that these 7 million hashes per second were the same as the hash rate in the first 14 days of bitcoin’s existence, confirming Satoshi’s claim that he was the only miner at the time.
Sergio followed up a few days later with an even more persuasive technical explanation of why Satoshi was likely the dominating miner in 2009, as well as a hint as to whose wallet Satoshi was mining.
Sergio’s research, which has been picked over by various researchers, notably the BitMex team, reveals that about 1 million BTC remain in the wallets of the leading 2009 miner, who is now thought to be Satoshi Nakamoto.
Satoshi sent part of the bitcoin to be mined to other people without a doubt. Satoshi made the first transaction on January 12, 2009, when he wired 10 BTC to Hal Finney, who is now deceased. Finney received the 10 bitcoin one day after his now-famous tweet, which stated, “Running bitcoin.” In retrospect, we can see how much wealth Satoshi created as one of the first, and at times, the only bitcoin miner on the network, as 10 BTC represents about $421,412 at 2022 pricing.
Bitcoin founder Satoshi Nakamoto remains an unknown, a legendary creature with a massive bitcoin fortune. He’s got many reasons to keep his identity a secret. Personal security is a major worry when you have a $60 billion wealth. Because bitcoin can undermine sovereign fiat currencies, Nakomoto may be concerned about legal action, if not other types of government penalty.
FAQs
1. Who owns the most bitcoin?
The bitcoin founder, Satoshi Nakamoto, is at the top of the list, with an estimated 1 million bitcoin worth $34.9 billion in 2021.
2. Can you lose money on bitcoin?
Yes, you can lose money on bitcoin in the following ways:
- Investing in the wrong crypto assets
- Crypto assets scams
- Hackers
- Password loss
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