Syed Yusuf Saadat
Research Associate, Centre for Policy Dialogue
E-mail: saadat@cpd.org.bd
This is part two of a series of blog on “Bitcoin”. Read part one and three here.
Bitcoin emerged in the aftermath of the global financial crisis of 2007. On 18th April 2008, the domain name bitcoin.org was registered anonymously. On 31st October 2008, a thirty-three year old Japanese man named Satoshi Nakamoto published a white paper on metzdowd.com, titled “Bitcoin: A Peer-to-Peer Electronic Cash System”. In this paper, Nakamoto proposed the concept of Bitcoin and outlined how it would work. Subsequently, in January 2009, Satoshi Nakamoto released the first version of the Bitcoin software and started mining the first bitcoins. Nakamoto made the Bitcoin software open source and collaborated with others in its development. Around mid-2010, Satoshi Nakamoto handed over the source code to an American software developer named Gavin Anderson. Although Satoshi Nakamoto did not attempt to mine all the early bitcoins for himself, there is evidence in the publicly available bitcoin transaction log that he owns roughly one million bitcoins. As of 17th December 2017, the value of one million bitcoins was over 19 billion US dollars, making Nakamoto the 44th richest person in the world.
However the real identity of the Bitcoin creator, Satoshi Nakamoto, remains enshrouded in mystery. The original Bitcoin paper is written like an academic research paper of the highest caliber. It includes concepts of computer science, cryptography, economics, accounting, programming, and probability theory. Due to the complexity of the problem and the ingenious method in which it is resolved, there are speculations that the paper may have been written by a group of people, instead of one person. In fact, the abstract of the paper mentions “we propose a solution”, instead of “I propose a solution”. There are also doubts as to whether Satoshi Nakamoto is really Japanese, due to his use of impeccable English and lack of use of Japanese, both in the Bitcoin paper and in the software.
As of 7th January 2018, the global market capitalization of bitcoin was over 280 billion US dollars at an exchange rate of one bitcoin equaling 16,713 US dollars. 16, 787, 675 million bitcoins were in circulation throughout the world, which is 79.94 percent of all the bitcoins that can ever be created. In the worldwide bitcoin community, 96.57 percent were male, 45.71 percent were between twenty-five to thirty-four years old, and 66.75 percent used a desktop computer to use bitcoin. In the total crypto-currency market, Bitcoin had the largest market share of 35.25 percent, followed by Ripple with 16.49 percent, and Ethereum with 13.46 percent.