- The bitcoin white paper was published 15 years ago by Satoshi Nakamoto.
- The paper outlined the blockchain technology that would underpin a decentralized payment system.
At the end of October 2008, an unidentified individual or group on people under the pseudonym Satoshi Nakamoto published a paper to a mailing list called Metzdowd titled, "Bitcoin: A Peer-to-Peer Electronic Cash System."
The paper introduced bitcoin as a currency and explained the foundations of blockchain technology. It was a short paper, just nine pages long, written in an academic style, with an abstract, introduction, and conclusion — but it introduced the world to what would become the biggest cryptocurrency by market value today and laid the groundwork for the cashless payment system that is underpinned by the blockchain.
"A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution," the paper reads.
The paper has made its mark, but intriguingly, nobody today has figured out who Satoshi Nakamoto is.
Theories say that Nakamoto is probably from the UK because they used British English spelling for words like "favour". It is also assumed that Nakamoto is a billionaire, by tracing the amount of bitcoin presumably held in wallets linked to Nakamoto.
The last time Nakamoto was heard from was in April 26, 2011, when they sent an email to fellow bitcoin developers, Mike Hearn and Gavin Andresen.
Other rumored identities have also cropped up over the years. Newsweek in 2014 claimed someone named Dorian Nakamoto was the crypto's creator, though he denied this. Australian computer scientist Craig Wright meanwhile has publicly stated that he is bitcoin's inventor, though this has been disputed. Programmer Nick Szabo has also been proposed as the author's true identity.
No one individual has been proven to be Satoshi Nakamoto and other theories claim they are most likely a group of people who collectively came up with the idea for what would eventually become the world's largest cryptocurrency by market cap.
In 2014, Nakamoto made their final post on a forum saying, "I am not Dorian Nakamoto."
What's in the white paper
While bitcoin was officially launched in January 2009, in the 2008 paper Satoshi Nakamoto laid out the fundamental framework of the blockchain-based payment system.
"What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party."
Trust was the biggest issue the electronic transaction system was supposed to solve. Instead of relying on a central authority to verify transactions, Nakamoto wanted to create a decentralized system, in which verification did not rely on a single entity.
Nakamoto proposed a currency where a coin would be defined by a "chain of digital signatures." Every time a transaction took place, the payer had to "sign" off on it. Each transaction would be broadcasted to a network of receivers and payers, who would verify the order of the transactions, which is done via complex and energy-intensive cryptographic computer work. Whoever verifies a certain transaction first would post their "block" in the chain of other verified "blocks," and be rewarded with bitcoin.
It wasn't written in the white paper, but the system is designed so that there are only 21 million bitcoins that will ever exist. Because the amount of coins that enter circulation is finite, every four years, the amount of bitcoins a miner is rewarded with is reduced by half. The next halving event will occur around the middle of 2024, which will reduce the reward to miners to 3.125 bitcoins for each verified transaction block.
There are currently 19.5 million tokens in the market. As more bitcoin is mined, verifying the transactions requires more and more time, energy, and power. Experts predict that the last bitcoin will be mined in 2140.
Since the white paper's publication, the crypto market has surged in value and cultural relevance, and the total market value of all crypto coins is about $1.2 trillion.
The market is currently awaiting on the approval from regulators of the first ever ETF that would track the spot price of bitcoin.
Bitcoin on Wednesday was trading around $34,300.