Satoshi Didn’t Create Blockchain

  • Whatsapp

Reporting from Publish0x, one of the most misunderstood things about cryptocurrency is that Satoshi made a blockchain. It seems that every online article wants to reward Satoshi for making a blockchain, when in fact it is absolutely untrue. Not all blockchain products are cryptocurrency, and Bitcoin is only one of the blockchain-based cryptocurrencies.

In fact, it is not true that Satoshi himself gives credit to the creators of the blockchain. However, everyone seems to want to ignore this and strengthen credit from the true creator of the blockchain.

Read More

If we look at the bitcoin whitepaper reference, we will see the original creator of the blockchain. Blockchain was made in 1991 by Stuart Haber and W. Scott Stornetta. Blockchain was made 17 years before bitcoin was made, which at that time was not called blockchain. The original whitepaper for something, which would become a blockchain a few years later, was entitled “How to Time-Stamp a Digital Document.”

In that document, almost everything about how bitcoin works is explained. The document explains how to time-stamp, make cryptographic hashes, link time-stamp together, and everything we later call blockchain today. The original creators of the Merkle tree were referenced three times differently and the Merkle tree was the cornerstone of how blockchain technology works.

The Merkle tree was created in 1988 by Ralph C Merkle. These three people, R.C Merkle, Stuart Haber, and W. Scott Stornetta, worked together to create what we know today as the blockchain.

Satoshi does not make a Merkle tree or make a time-stamp that we know as a blockchain. Bitcoin is the first technology to use previous technologies so that many who associate the creators of bitcoin have created a blockchain, but that is actually not accurate. Bitcoin is the next step in building blocks. 1988 was the year the Merkle tree was created, then three years later came the time-stamp ledger system.

To understand what Satoshi actually made, you must first understand the basic problem with a distributed computer system such as bitcoin. That problem is known as the Byzantine General Problem.

Common Byzantine Problems are everyone who is part of a computer system must agree on a specific strategy to keep the system running, thus avoiding system failure. Meanwhile, they know that not everyone in the system will agree. Sounds like an impossible problem to solve.

This is very important with systems like bitcoin because without a solution to this problem two different people potentially write conflicting information to the ledger.

For example one person can write that Alice has 1 bitcoin and send one bitcoin to Bob, while another person can write that Alice has 1 bitcoin and send the bitcoin to Carol. To overcome this problem, Satoshi created what we know as Proof-of-Work. Proof-of-Work is a method of guessing solutions to cryptographic equations (one might say). When someone solves an equation, they can add it to the ledger. The person who works then is verified by someone else.

If someone tries to fake their work, it cannot be verified by others and is therefore removed from the ledger.

Double expenditure is what happens when two different people try to add conflicting data, which is different, to the blockchain. By using Proof-of-Work, we know people can prove they have the right to add data to the blockchain, but how do we know the data they added is valid?

Using the same example as mentioned before, how do you stop one person from being able to say that Alice sent bitcoin to Bob and another person saying Alice did not send 1 bitcoin to Carol?

Initially this is something that is solved by a combination of time-stamp mixed with inspection that is completed. The first person to add data to the ledger and ensure that the verified information is considered to be correct data, and any conflicting data will then be rejected.

Although most still work the same way, now bitcoin also considers mining costs.

So if Alice sends 1 BTC to Bob at a cost of 10 sat per byte, and one second then sends 1 BTC to Carol at a cost of 50 sat per byte and both reach a blockchain with zero confirmation, transactions with a cost greater than the two costs will be one received.

Related posts