Between work, band practice, recording, and going on those gorgeous autumn hikes, I’ve been spending a solid chunk of time familiarizing myself and delving into the science and application behind the digital currency craze known as Cryptocurrency. Unless you haven’t been on the internet in the last 5 years, you’ve no doubt heard of Bitcoin, the first and still most important cryptocurrency out there. But while a lot of us have heard of it, some may find themselves asking…
What is Cryptocurrency?
You’ll get a different answer from each person you ask, and some may give a lengthy response that still leaves you scratching your head. But the simplest definition of cryptocurrency is that it’s a form of digital money that is designed to be secure and anonymous.
Full disclosure: the theories, protocols, applications, and sciences behind cryptocurrencies vary between the various types of cryptocurrency (Last documented number of cryptocurrencies was clocked at over 900 and still growing!). For the sake of these guides, I’ll be referring specifically to Bitcoin. And another warning: this stuff is dense, but throughout this series, I’ll do my best to make it palatable.
While the boom of cryptocurrency (henceforth called simply ‘crypto’ in these guides) is not new, it only truly took off within the last ten years. Throughout the early 2000’s, there were a number of attempts to create a digital currency system (see: Digicash) that ultimately failed. It wasn’t until late 2008 that the concept of crypto became more than just a failed pipe-dream.
In October 2008, an individual, (or individuals, the identity is still debated) using the name Satoshi Nakamoto published a paper on a cryptography mailing list titled “Bitcoin: A Peer-to-Peer Electronic Cash System”. This has come to be known as the Bitcoin “White Paper”. Within the white paper, Nakamoto describes and details the methods of using a peer-to-peer network to generate what was described as “a system for electronic transactions without relying on trust”. By the following January, Nakamoto implemented the Bitcoin software as open source code and released it to the public. The Bitcoin network was born after Nakamoto ‘mined’ the first ever ‘block’ on the ‘chain’, known as the “genesis block”, for a reward of 50 Bitcoin***. Embedded in this first block was the following text:
“The Times 03/Jan/2009 Chancellor on brink of the second bailout for banks.”
But wait, block? Mine? Chain? What do these mean, you may be asking yourself? And we will certainly go down that rabbit hole! But I think it’s better left for The Crypto Craze Part Two: Party On The Blockchain.
Fun fact: 50 Bitcoin would be worth $275,497.50 at the time of this writing.
