What is Bitcoin Whitepaper? Why is It So Important?
Love might or might not be in the air but money is surely not. Money has to be generated and earned by proposing a value in the market and presenting even a million dollars worth of value in a single attempt is not an easy task to achieve. But what if we say that only a 9-paged document became the foundation of something whose market capitalization crossed even a trillion dollars?
We are talking about the whitepaper of Bitcoin that gave its community a vision to move forward and achieve what it is worth. In the article ahead we are going to explore how a 9-paged document has been able to raise a new trillion-dollar economy. So without further ado, let us get started with the article.
What is a Whitepaper
Labeling the whitepaper of a project as its heart and soul would not be an exaggeration. A whitepaper is a written document that magnifies the idea behind the project while discussing the technicalities involved. Whitepapers are used to communicate the project idea to the target audience while addressing the key points of confusion.
Having a whitepaper is not a mandatory practice for projects from all industries. However, almost all the crypto tokens have well-written whitepapers which cite their reasons for starting up with the project. Having a whitepaper document for your cryptocurrency has become a tradition following the first cryptocurrency, Bitcoin’s well-written and explanatory white paper.
Who Wrote Bitcoin’s Whitepaper
When the first cryptocurrency hit the internet, the concept of a currency that is based on a blockchain network was completely non-existent. This idea of creating an alternative to traditional fiat was so revolutionary and technical for people to understand that it had to be explained in simple words.
Bitcoin’s whitepaper was written by an unknown individual or a group of individuals named Satoshi Nakamoto. Nobody knows who is Satoshi Nakamoto and from where Bitcoin originated. However, there are multiple speculations and myths about the founder of Bitcoin and people believe him to be a blockchain developer from Japan. Nevertheless, there is almost no solid evidence behind any of these speculations.
Bitcoin’s whitepaper starts with a detailed abstract and deals with the different aspects of Bitcoin while explaining its method of functioning. The entire Bitcoin white paper is a 9-page document that can be divided into 12 parts but the impact these 9 pages created on the world cannot be measured in the metrics.
How Bitcoin’s Whitepaper Changed the World
In this segment of the article, we are going to explore the impact of a nine-page document in creating a global crypto revolution. We will examine the changes through which Bitcoin has been able to become a name, known to all.
Made Bitcoin Possible
Bitcoin whitepaper’s foremost aim has become its greatest achievement. It has been able to incite the trust in readers that Bitcoin is not just another financial gimmick. Bitcoin has been a solid project from the start and its whitepaper explained how things are going to work, how miners are going to make their profits, and how security is going to come at the forefront of the Bitcoin ecosystem.
Handing over the project to the community in 2009, Satoshi Nakamoto ensured that people understand the project clearly enough to take it forward, and they did! Bitcoin was raised to become the largest digital currency in the world and even hit the trillion-dollar mark at the market peak.
Created an Alternative to Traditional Banking
Traditional banking has been a part of our lives for a long time. With all the inadequacies and levied charges, the banking sector has been enjoying its position due to a lack of better alternatives to its services.
When Bitcoin entered the market and presented the people with a method of exchange that was not only faster but also reliable and private, it shook the foundation of traditional finance. Bitcoin was working on Blockchain Technology that cuts down the need to have a central regulating authority while transacting any assets. This was a direct threat to banks and the traditional banking ecosystem.
Introduced Decentralization to the Masses
Before Bitcoin emerged as a major force in digital finance, most people had no knowledge of the disadvantages of centralized institutions. The hidden cost of transactions, the vulnerability in the mechanisms, and complete control being held by individuals, institutions, or governments are some of the most common concerns that came to the forefront with the Bitcoin proposal.
The Bitcoin world is completely decentralized and does not involve any intermediaries that charge you for their services. Its functioning has been encoded in an immutable manner and its whitepaper explains the advantages of having a decentralized mode of asset transfer.
Made Our Contracts Smart and Trustless
Contracts are based on trust between the two parties with a regulating authority playing a key role in the entire operation. However, the Bitcoin whitepaper started a revolution that lead us to move towards understanding the concept of blockchain better than ever before. Bitcoin became the reason for the development of new technologies in the blockchain and eventually, we had smart contracts.
Smart contracts are self-executable pieces of code that can move the assets as per the programming when certain conditions are met. Smart contracts are immutable and immune to any foul behavior from any party, making the entire transaction trustless.
Efficient Funnel For Crowdfunding
Crowdfunding has been part of our culture for a long time and it has been foundational to some of the greatest projects of our time e.g Wikipedia. However, crowdfunding as a project also used to involve the cost of transactions along with a hefty commission to the platform bringing the donations. Bitcoin changed this picture completely by removing the intermediaries from crowdfunding and reducing its cost of it by a sizeable margin.
Since the rise of cryptocurrencies, we were able to witness some of the greatest attempts of crowdfunding both in terms of volume and numbers including the Project Constitution DAO, raising over $47 million from people to buy the last original copy of the USA’s constitution. Constitution DAO could not succeed because of excessive gas fees but it surely flexed the muscle of the global crypto community. Ukraine’s recent NFT museum is another example of successful crowdfunding.
Made International Transactions Affordable
Sending money across borders without any central authority was unimaginable before Bitcoin hit the market. The decentralized fund transfer does not involve additional gatekeepers and that reduces the cost of transferring money across borders much more affordable.
A Blockchain network does not follow the rules and regulations of a specific geographical location and works only by the bounds of the cryptocurrencies. This ensures uniformity even during international transactions, making the transactions much simpler to execute.
Significance of Bitcoin Whitepaper
The bitcoin whitepaper made it possible for the users to understand the core ideas of Satoshi Nakamoto behind the formation of Bitcoin. This allowed Bitcoin to steer in the right direction without losing the values for which it was standing from day one. Bitcoin whitepaper has acted as a guide for multiple projects and showed them the way to become what they are today.
Even though all the crypto projects differ fundamentally from each other, the values in the Bitcoin whitepaper remain intact and relevant for all. Nakamoto’s vision is now helping the government and banks to develop their own blockchains. A 9-paged is leading the world to achieve the solution to one of the biggest hurdles that we are facing today, and it will stay in the ecosystem forever to inspire innumerable upcoming projects.
The Way Ahead
Bitcoin took its time to develop within the community before taking its leap in the market. Even after a massive market crash, Bitcoin is leading the cryptocurrency market with the largest market capitalization. With loyal investors, an interactive community, and market whales, Bitcoin has everything that a successful crypto project can dream of.
However, the excessive energy consumption in its mining process is emerging as a huge challenge that is yet to be overcome by Bitcoin. A shift from Proof-of-Work to Proof-of-Stake might sound reasonable but a hard-to-achieve consensus within the blockchain is the biggest hurdle on the way ahead.
