In 2010, Florida resident Laszlo Hanyecz received 2 pizzas from fellow Bitcoin enthusiast Jeremy Sturdivant in exchange for 10,000 Bitcoin (BTC). At the time, the transaction was only worth about 42 United States Dollars (USD). In fact, Laszlo had worried the 10,000 BTC offer might be too low.
Yet, word of the new digital asset being used for practical purposes quickly spread. As its adoption exploded in the years to follow; the 10,000 BTC was eventually worth thousands and then millions of USD.
Today, Bitcoin Pizza Day commemorates the milestone when Bitcoin was first used to purchase real goods.
NOT FINANCIAL ADVICE: The information contained here is for entertainment and informational purposes only. As of the publication date, I hold Bitcoin (BTC), and several other cryptocurrencies.
Ultimately, a blockchain is a data type where collections of data are validated (in part) by the collection before it. These data are organized into blocks, which are linked together using cryptographic hashes similar to the SHA2 hashes I explored using GNU Octave and Scilab.
Blockchain is often wrongly conflated with cryptocurrency. However, the blockchain approach is only one of Bitcoin’s key features, which include…
| DECENTRALIZATION | Bitcoin’s decentralized ledger is maintained by automated nodes that operate on a peer-to-peer basis… * No node has authority over any other node * Nodes are scattered across the globe for extreme geo-redundancy * Nodes are rewarded only if they can prove they have secured the current block using SHA2 cryptography. This process (called Proof of Work) requires computational effort and it serves as a rewards randomization mechanism. |
| PERMISSIONLESS | The Bitcoin network does not require high social status, authority, or special approval from its participants. Instead… * Nodes abide by strict, pre-determined rules for validating transactions * Invalid blocks are easy to detect * Non-faulty nodes will not cooperate with faulty nodes or the chains they produce. |
| IMMUTABILITY | By design, the computational cost of detecting an invalid block is trivial compared to the cost of creating an invalid one. This is due to the one-way nature of the hash functions Bitcoin uses. * The Bitcoin chain functions as a tamper-resistant, append-only ledger. * The chain is not perfectly immutable, as a few chain splits and blockchain reorganizations have happened in 2010, 2013, and 2015 to address critical faults |
| PSEUDONYMITY | Bitcoin users do not require secret information such as an account number or routing number to exchange Bitcoins. Nor do they require Personally Identifiable Information (PII). * Sending Bitcoin simply requires the knowledge of the recipient’s public address. |
| LIMITED SUPPLY | Bitcoin’s nodes operate off a shared set of rules that (among other things) cap the maximum possible supply of Bitcoins to 21 million. * This supply cap prevents arbitrary and arguably abusive monetary policies * There is also an upper limit to the number of new Bitcoins that can be created per block. This rate (sometimes called the rate of emission) is throttled |
References
| [1] | Creative Commons, “Attribution-ShareAlike 2.0 Generic (CC BY-SA 2.0),” [Online]. Available: https://creativecommons.org/licenses/by-sa/2.0/. [Accessed 22 May 2023]. |
Important Notice: This article and its contents (the “Information”) belong to Unboxing-tomorrow.com and Voxidyne Media LLC. No license is granted for the use of it other than for information purposes. No license of any intellectual property rights is granted. The Information is subject to change without notice. The Information supplied is believed to be accurate, but Voxidyne Media LLC assumes no responsibility for its accuracy or completeness, any error in or omission from it or for any use made of it. Liability for loss or damage resulting from any reliance on the Information or use of it (including liability resulting from negligence or where Voxidyne Media LLC was aware of the possibility of such loss or damage arising) is excluded.
