The World As Satoshi sees It
In this post we are not going too far to inspect the idea technically, we are taking a look at the idea philosophically. This post is not for encouraging you to invest financially in BTC, it’s trying to encourage you to think about this concept.
Satoshi as a team or a person had an excellent vision for the future of the value.
In the beginning, people started to barter. They exchanged goods with goods without using money. But there were lots of problems, and a medium was needed to make this trading more efficient. They used some limited supplied material for trades as a medium. Like Salt and then Gold.
Money, as we use it these days, is a great invention in history. It’s not only for trading goods, it’s a tool for storing values, and inheritance the value to the next generation. At the beginning of history, humans with more muscles had more chances to survive and get more food. But with money, people can survive even without physical advantages.
I believe Satoshi is one of the most influential ideas in our contemporary time. We needed to take a huge step toward the next version of the money. Actually, not the money, but something new to trade anything, especially digital assets.
To innovate this tool, Satoshi must have a good understanding of the value itself. and they did this in the best way possible, Bitcoin.
Bitcoin is not only a cryptocurrency, it’s a concept. A tool to trade, to store, to transfer a value.
Bitcoin
You heard about the Bitcoin Wallet for sure. A virtual wallet to store and hold the Bitcoin value. But in fact, the wallet is only a random string (actually an array of bytes) which is called a Private Key. The Bitcoin network uses Asymmetric cryptography. There is a key pair with two bonded mathematical numbers. One of them is the Private Key, the main secret key, and the other is the Public key, which is used to receive the value, like your address. There are different methods to encode the public key to the BTC address. The addresses we use to receive the BTC value are encoded from the public key.
Each Bitcoin private key has only one paired public key, and each public key can be encoded to an address. Therefore, each private key has only one address to receive value. What? Wait a sec! Are you using a wallet that can generate multiple addresses? Yup. It’s alright. Regarding privacy and security issues, the BIP44 standard defines a method to derive more private keys from the master key. So with infinite private keys, which are derived from the master key, you can have infinite addresses.
The beautiful part is here:
There is no wallet! The BTC network has no awareness of a wallet concept. Actually, you are receiving a redemption code, something like a banknote or money paper, that you can only spend with your signature (signing the input with your private key).
In fact, when I send some BTC value to your address, I’m sending the value to your public key, that only can be spent with your private key signature.
You can transfer multiple received values (even with different public keys) to various addresses in one single transaction! Only you need to sign each of these received values with the corresponding private key!
It’s brilliant, isn’t it?
One of my problems with the Ethereum network is the account or wallet concept. On the other hand, it doesn’t support multiple inputs or outputs for the transaction. Puff!
Network
Satoshi designed a decentralized consensus, so there is no centralized system to decide about the transactions’ authority. The data is stored in a decentralized network as a list called Blockchain. Thus, the data is not centralized and each node of the network has a copy of the Blockchain.
Supply
The miners validate the broadcasted transactions to prove that they are unspent to prevent double-spending. The competition to receive the network reward is so tight, so how should we judge them? when two miners validate the whole block transactions at the same time? The best choice is the Nature selection. After validating the transaction and building the new block, the miners need to solve a mathematical game to receive the reward.
Value
Satoshi knows that the price is a result of the demand and supply, so the BTC is needed to be limited. Yes, it’s a code, we can change it, but a balance between demand and supply can make it more precious. Thus in the planned steps, each time, the network reward for the miners is halved.
Flexibility
The network is not only about the BTC, it’s about everything. you can store any data on the network, not only the value. Bitcoin uses a stacked-based programming language to lock and unlock transactions. The sender uses this script to lock the transaction, so the receiver could unlock it. The script allows the sender to be flexible about the unlocking rules. the sender can put a lock on the transaction which can not be unlocked! Yup, an unspendable transaction! or put a lock on the transaction which can be opened by a joint signature from multiple different private keys! but this is a little more complicated because those private keys must receive the transaction at a joint address.
BTC and Energy
We can judge any idea with its costs and benefits. If the benefits are more than the costs for the majority, so it will be used. Bitcoin is no exception. Lots of computer processing and electric power are used to run this network. Does it cost much?
Last word
I’m not a technical trader or predictor, but I see a future in Bitcoin. Bitcoin is not the ultimate solution but it’s a huge step to solving this problem in the digital world. If you have a different idea or see a different aspect, put a comment!
I wrote this article several years ago and kept it as draft because I wanted to start a new technical series to publish my design for a distributed wallet API. However the time was not on my side and I couldn’t finish the implementation. So I’m publishing it to cleanup. Maybe someday I work on it again or at least publish the architecture design.
