[INFORMATIVE] SATOSHI FACTORY - Brief History of BITCOIN!

Just 10 years ago, on 31st of October 2008, the whitepaper was released by Satoshi Nakamoto titled Bitcoin: A Peer-to-Peer Electronic Cash System as a response to the 2008 financial crisis that was sweeping through the world, and a failing central bank owned global monetary system.

Only a couple of months after the release of the whitepaper, on 3rd of January 2009, the network came into existence with Satoshi Nakamoto mining the genesis block (block number 0), which had a reward of 50 BTC. Embedded in the coinbase transaction of this block was the text:

The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.

The text refers to a headline in The Times published on 3rd of January 2009. This note has been interpreted as both a timestamp of the genesis date and a derisive comment on the instability caused by fractional-reserve banking.

The first open source client was released on 9th of January 2009, and one of the first supporters, adopters, contributor to and receiver of the first transaction was programmer Hal Finney. Finney downloaded the software the day it was released, and received 10 BTC from Nakamoto in the world's first transaction on 12th of January 2009.

One of the most notable transactions in 's early days is of 10,000 BTC used to indirectly purchase two pizzas delivered by Papa John's. Today that transaction is worth $64,347,040 USD (at today's price) showing just how far we have come since only a few years ago...

Content referenced from Wikipedia. Continue reading here...

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While the point of this post is to give you a brief overview of the history of , I find it important to also have a simple understanding of how it actually works. Since I will not go into the technical details, I will only briefly touch on the main components that make it work...

BLOCKCHAIN - The blockchain is a shared public ledger on which the entire network relies. All confirmed transactions are included in the blockchain. It allows wallets to calculate their spendable balance so that new transactions can be verified thereby ensuring they're actually owned by the spender. The integrity and the chronological order of the block chain are enforced with cryptography.

TRANSACTIONS - A transaction is a transfer of value between wallets that gets included in the blockchain. wallets keep a secret piece of data called a private key or seed, which is used to sign transactions, providing a mathematical proof that they have come from the owner of the wallet. The signature also prevents the transaction from being altered by anybody once it has been issued. All transactions are broadcast to the network and usually begin to be confirmed within 10-20 minutes, through a process called mining.

MINING - Mining is a distributed consensus system that is used to confirm pending transactions by including them in the blockchain. It enforces a chronological order in the block chain, protects the neutrality of the network, and allows different computers to agree on the state of the system. To be confirmed, transactions must be packed in a block that fits very strict cryptographic rules that will be verified by the network. These rules prevent previous blocks from being modified because doing so would invalidate all the subsequent blocks. Mining also creates the equivalent of a competitive lottery that prevents any individual from easily adding new blocks consecutively to the blockchain. In this way, no group or individuals can control what is included in the blockchain or replace parts of the blockchain to roll back their own spends.

Content referenced from Bitcoin.org. Continue reading here...

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Now that you have a basic understanding on how works, I would also like to touch on what makes different from any other currency in existence today. While this is a topic that is still highly debated, that can be judged through a lot of economic and monetary points of view, I will share with you the most important functions and attributes of that set if apart, but first, you need to understand the difference between money, and currency...

The functions that both money and currency serve, are almost exactly the same, with only one exception...

MONEY	CURRENCY
MEDIUM OF EXCHANGE	MEDIUM OF EXCHANGE
A UNIT OF ACCOUNT	A UNIT OF ACCOUNT
PORTABLE	PORTABLE
DURABLE	DURABLE
DIVISIBLE	DIVISIBLE
FUNGIBLE (INTERCHANGEABLE)	FUNGIBLE (INTERCHANGEABLE)
STORE OF VALUE

Money is also a store of value, while currency is clearly not. Just for serving that function, makes for better money than any of the fiat currencies in existence right now. can accomplish that by being a deflationary currency, with a fixed supply of only 21,000,000 coins that will ever be created.

While new coins are being found as a reward for every block found (currently at 12.5 BTC/block), the rewards are cut in half every approximately 4 years, significantly slowing down the creation curve of new coins, until the total supply will be mined out. In other words, over time, less and less coins will be created, and with a steadily increasing demand, and a steadily decreasing supply, the value of each coin can only increase, therefore allowing it to be a store of value.

On the other hand however, the fiat currency that we use on a day to day basis in not nearly as transparent or trustworthy as , nor does it serve the function of being a store of value, due to the continued creation of new currency, both in physical and digital format, otherwise known as inflation, as a tool for governments to stay ahead of the curve, and chip away at people's wealth and purchasing power, therefore taking away their freedom.

The hard earned currency that you sometimes afford to save should go up in value over time, not down. Not even the interest you get from your bank can keep up with inflation, so year after year, you have less and less wealth stored - crazy when you think about it, right?

Learn more about Money vs Currency by watching Mike Maloney's Hidden Secrets Of Money here...

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Although I know it's a lot of information, a lot to process and think about, and that it seems very doom and gloom, since the invention of money, civilizations have faced boom and bust cycles of their monetary systems, and the best thing to do right now is to prepare yourself. To learn about how our current monetary system works, as well as what doesn't, and what are the ways we can fix it. Start investing into your knowledge, so you have the necessary tools to also invest your wealth when you will be ready...

To help you in your journey of financial education, I have linked several sources throughout this post, with very useful information on certain topics, and I highly encourage you to go back and read through them, as I am sure you will find the content to be very informative.

Next time I will be posting, now that you have a basic understanding of how both and our monetary system works, I will share with you the first, and most important tool and strategy on how you can start earning for free, as well as setting the foundation for the overall strategy, as promised in my introduction post here...

If you found this information to be useful, and decide to show your support in any way towards me, then I think a simple upvote on this post would be enough for now, and also a follow on the blog @satoshifactory as I will be putting up more such content in the future. With that being said, I want to thank you for reaching this point, and I hope to see you in the next one...!