How it all began: An announcement of the very first version of Bitcoin from Satoshi Nakamoto

Yesterday, on February 26, the official release of Bitcoin Core 0.16.0, the 16th generation of the original bitcoin software, took place.

In this regard, we decided to recall the very first release, which took place more than nine years ago, on January 9, 2009. He was introduced by Satoshi Nakamoto in an electronic mailing to a narrow group of Shifropankov and was ignored by the media.

This correspondence is especially interesting because it preserved the views and hopes of people who were engaged in bitcoin in pure enthusiasm and did not know what impact it would have on today’s understanding of the economy and the monetary system.

So, the historical release was a small letter:

«Announcement of the first release of bitcoin — a new electronic cash, which uses a p2p network to prevent double spending.

It is completely decentralized: without a server or centralized power. Screenshots on bitcoin.org.

Download link: http://downloads.sourceforge.net/bitcoin/bitcoin-0.1.0.rar

So far, only for Windows. Open source code is included in C ++.

The software is still at the alpha stage and is experimental. There are no guarantees that the system will not need to be restarted at any time, although I did everything I could to make it expandable and versioned.

You can get coins by asking someone to send them to you or by running «Options -> Generate coins to start a site and create blocks».

To begin with, I made the Proof-of-Work complexity ridiculously low, so that a typical PC will be able to generate coins for a few hours in a while. This will become much more difficult when competition forces you to automatically raise complexity.

The generated coins must wait 120 blocks to «mature» before they can be spent.

There are two ways to send money. If the recipient is on the network, you can enter his IP address and connect, get the public key and send the transaction with comments. If the recipient is not on the Internet, you can send funds to his bitcoin-address, which is a hash of the public key that he gave you. It will receive a transaction that will be included in the block, the next time it is connected to the network.

This method has a disadvantage: you can not send information in the comments, and the percentage of anonymity can be lost if you use the address several times. But this option is useful if both users can not be online at the same time or the recipient can not receive incoming data.

The total number of coins will be 21,000,000. The new coins will be distributed among the nodes that produce the blocks, and the number of coins will be reduced by half every four years.

The first four years: 10,500,000 coins;
the following four years: 5,250,000 coins;
the following four years: 2,625,000 coins;
the following four years: 1 312 500 coins
etc…
When this is over, the system will continue to support commissions for transactions, if necessary. The system is based on open market competition, and there will probably always be nodes ready to process transactions for free. »

Satoshi Nakamoto

Already at that time bitcoin was «betting» and predicting a staggering cost to him. On January 11, the late Hal Finney, the famous American programmer, who the next day became the world’s first recipient of bitcoins, responded to Satoshi’s letter:

«It is interesting that the system is configured for a certain maximum number of coins that will ever be created. I think the idea is that the amount of work required to create a new coin will increase over time.

One of the main problems in the case of any new currency is its valuation. Even if you ignore the practical problem (no one will take the currency first), it is still difficult to argue for the benefit of a particular non-zero coin value.

As an amusing thought experiment, imagine that bitcoin becomes the dominant payment system used throughout the world. Then the total value of the currency should be equal to the total value of all the riches in the world. Known to me, current estimates of total world wealth range from $ 100 trillion. up to $ 300 trillion. If you translate this into 20 million coins, then the cost of each will be $ 10 million.

Thus, the opportunity today to generate coins with a cost of several cents of processing power can be a pretty good bet with compensation in the ratio of 100,000,000 to 1! Even if the chances of bitcoin to achieve the above described success are small, is this really one chance against 100 million? There is something to think about … »

Hal

As early as October 5, 2009, the Bitcoin rate was first published on the New Liberty Standard exchange. It amounted to 1,309.03 BTC for one dollar, and on December 16 the version of Bitcoin v0.2 was released.