Tuesday, July 27, 2021

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    This is the document that brought bitcoin and its fascinating history to life

    Many people talk about bitcoin, and it is some of its holders who consider that cryptocurrency will ever replace gold as a store of value, due to its strict digital properties, its immutability and scarcity, but to understand what it is really about, you have to go to the root of the matter knowing the document that gave it life.

    It is surprisingly surprising and has gained inches on the front pages of the newspapers the news that, since its conception in 2008, at the beginning of May of this year has reached a capitalization of more than 663,524 million dollars (mdd).

    Therefore, the crypto (despite Warren Buffet says that it lacks value) at some point is transformed into a payment currency and acquires an economic value that registers capitalization and therefore becomes an asset, and by its digital characteristic of accounting and transferring value, clearly it comes to life as a digital currency.

    But digital currency from what or where: of the idea of a person, or core of them or entity under the pseudonym of Satoshi Nakamoto who together with other volunteer developers created a decentralized accounting form, based on cryptography, which was not going to require the banking services as we know them.

    That is the moment when Nakamoto and his partners must have thought about how big they had done, a tool for electronic money transfer, open source, that no one could ever regulate, or put themselves as intermediaries of payments or collections, and whose validity is ratified through a succession of mathematical calculations that are recorded in a blockchain or blockchain, in the public domain and unmanipulable.

    Nakamoto and his colleagues called this system “A Peer-to-Peer Electronic Cash System” (a P2P or point-to-point electronic cash system) and we would say that it saw the light of day when its authors, anonymously, published it in the list of mail of Metzger, Dowdeswell & Co. LLC, practically the authority of the crypto society and policies related to its use.

    The document that gave life to bitcoin, can be found in the web of crypto, and basically underpins Nakamoto’s creation & partners, as “a peer-to-peer version of electronic cash that would allow online payments to be sent directly from one party to another without going through a financial institution.

    Bitcoin, owner of a particular story

    “Digital signatures provide part of the solution, but the main benefits are lost if a trusted third party is still required to avoid double spending ( that is, you spend twice but register one).

    “We propose a solution to the problem of double spending using a network peer-to-peer -prays the paper-. The network times transactions by converting them to a continuous proof-of-work chain (proof of work blockchain) based on hash (the processing power of the bitcoin network), forming a record that cannot be changed or redoed its proof of work.

    “The longer chain not only serves as proof of the sequence of events witnessed (operations of whatever), but also as proof that it came from the largest group of processing power (from the blockchain on timestamp servers, which are the ones that record operations based on time stamp).

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    “Provided that most of the processing power used for the ratification of these operations, andsté controlled by nodes that do not cooperate to attack the network, will generate the longest chain and they will outperform the attackers.

    The network itself requires minimal structure. The messages are transmitted optimally and without greater effort, both the nodes (the miners or digital counters, which are the ones that generate the bitcoins) can exit and rejoin the network at will, accepting the longer proof-of-work chain as proof of what happened whilethey were out,” he concludes.

    If we think of this in an abstract way, the Paper ratifies the philosophy of avoid relying on financial institutions who act as trusted third parties to process electronic payments from internet commerce.

    The global accounting that bitcoin proposed in a certain way, grows as its miners or accountants are recording crypto operations in the “global virtual ledger” that represents the blockchain, with its many virtues of irreversibility (what the blockchain’s time server records, cannot be deleted or corrected) ratifying the continuity of its growth.

    the foundation of the creation of bitcoin states that “what is needed is an electronic payment system based on cryptographic evidence rather than trust, which allows two interested parties to transact directly with each other without the need for a third party to provide that trust.

    “Transactions whose reversal is not computationally practical would protect sellers from fraud, and routine custody mechanisms could easily be implemented to protect buyers. The system is secure as long as honest nodes collectively control more CPU power than any cooperating group of attacking nodes,” he specifies.

    In this regard, in the history of crypto have been raised doubts about the decentralization of the network and one who substantiated his claim was Elon Musk, who said that the network is actually “highly centralized”, due to the episode of the flooding of a single mine in the city of Xinjiang that recently caused, according to several media, a decrease in computing power or hashrate of the crypto network, by 35%.

    From its inception in 2008 until 2010, when Nakamoto and company stopped developing the system (then continued by the Bitcoin Foundation), accounting that some might define as “the abacus of the non-capitalist world“, was receiving numerous tests of confidence that have been ratifying it over the years, as when in 2011 Wikileaks, began to accept donations in bitcoin after the blocking by the processors of electronic payments Visa, Mastercard and PayPal.

    Not all revolutions are like those of television, or like that of Mister Robot, but clearly these fantastic iterations are inspired by some real facts and some of the imagination of their creators.

    The fact that a country like El Salvador has been the first to legalize bitcoin as an official currency, he continues to advocate for the trust that many people put outside the traditional banking system.

    In addition to the Salvadoran movement, paraguay is added, through the bill deputy Carlos Rejala, who announced the initiative before the Congress of his country, in order to adopt bitcoin officially.

    If approved, Paraguay would be the second country in the world to grant the main cryptocurrency the legal tender status. While Rejala did not give too many details about his project, the document he will present will intend to introduce measures to make Paraguay a center for investment crypto.

    Just one final detail for reflection: the environmental footprint of bitcoin mining. In 2021, bitcoin mining has been consuming the same energy as all of Argentina, according to a research journalistic with data of the Cambridge Bitcoin Electricity Consumption Index, therefore, the challenge of creating sustainable energy sources is prevailing.

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