Sources often credit DigiCash with being the father of Bitcoin. This makes sense. However, during DigiCash’s time, the internet was still relatively young. It wasn’t as widely used as it was in the 2000s when Bitcoin appeared. Buying things on the internet hadn’t taken off in the 1990s. People simply didn’t trust the digital security of the time.
As security gradually improved, people’s spending habits online changed. Making online purchases became normal. This created the right environment for cryptocurrencies to emerge again.
It wasn’t until October 2008 that the world got the first glimpse of Bitcoin. It was at this time that Satoshi Nakamoto released the paper Bitcoin: A Peer-to-Peer Electronic Cash System. This event is important within the history of Bitcoin. It was this paper that mapped out the thoughts and ideas that Bitcoin is built around.
Not a lot is known about Satoshi Nakamoto. Many believe it is a pretend name designed to protect the Bitcoin inventor's real identity. Some have even suggested that it could be a cover name for a group of people working together. The Bitcoin creator has never revealed their true identity. People have claimed to be Nakamoto, with the most notable of these being Australian academic Craig Wright. However, the Bitcoin community was not convinced by Wright's bold claim. Bitcoin's true creator is still unknown.
Nakamoto’s paper talked about some of the issues with digital cash and how they could be fixed. The biggest issue with digital cash is that files can be copied over and over again. This essentially meant it was possible to copy and spend money more than once. However, Nakamoto came up with a system to stop this.
In order to combat this problem, Nakamoto talked about the idea of the blockchain. A blockchain is like a big address book or directory of all Bitcoins ever created. This directory can be accessed by anyone. It allows people to see all Bitcoin transactions and makes it very difficult to fake or copy Bitcoins and payments.
After this paper was uploaded to the newly set-up bitcoin.org domain, things started to take shape with Bitcoin. It started to form into the cryptocurrency that we recognise today.
The Bitcoin network was made live and accessible to the public in January 2009. This saw the release of the first Bitcoin client, which let people 'earn' Bitcoins through their computer. This process is known as Bitcoin mining. Bitcoin mining sees a computer try to solve a difficult math sum. If the computer cracks the sum and produces the right answer, Bitcoins are released as a reward. This works in a similar way to how people earn money by getting paid for the work they do.
Satoshi Nakamoto mined the first ever Bitcoins, dubbed the “Genesis block”. Due to how the blockchain works, this very first block can still be viewed online. One of the main things that is interesting about the Genesis block is that it had a message encoded within it. The messaged referenced the front page of The Times newspaper on 3rd January 2009. The headline read:
Chancellor on brink of second bailout for banks.
It is thought that this was included to prove the time that this first block was created. It's also a reminder of Bitcoin’s mission and the poor economy of the time. Within the Bitcoin community, this newspaper has become a sought-after collector’s item.