Getting to know Bitcoin's "White Paper".

As I have already told you in my previous publications in order to succeed in the world of cryptocurrencies we must begin to study and learn about this vast and fascinating world.

With the analysis of the white paper of Bitcoin, we can have a clearer idea of how it works and understand why the value of its currency.

In 2008, Satoshi Nakamoto, in the middle of the strong financial crisis of the year caused by the real estate bubble and the bankruptcy of Lehman Brothers, sent an email to many of his contacts in the cryptographic world, what we know today as the Bitcoin white paper.

Source

In this document, Satoshi Nakamoto proposed the creation of digital money that would allow transactions and payments between people without the need for the intervention of a financial institution. The operations are peer-to-peer, or person-to-person, without the intervention of banks or centralised institutions, benefiting from greater effectiveness, as this would serve to avoid the double cost of transactions today.

There he proposed the creation of electronic money where transactions between people would be concluded by means of digital signatures, thus eliminating trusted third parties and limiting double spending, using a peer-to-peer network. We propose a solution to the double-spending problem.

These person-to-person transactions would be carried out through a network (blockchain) which will generate blocks of the transactions made. The chain itself will place a stamp on each of the blocks generated by the continuous proof-of-work chain based on hash (encryption) that would act like fingerprints in humans, it would be a unique and unrepeatable mark, thus establishing an inviolable record, which cannot be modified without redoing the proof-of-work.

Source

What does this mean?

If someone tries to modify the information contained in one of the blocks, the network itself will invalidate this block because it will generate a new hash which will be invalidated by the rest of the chain.

Remember that this blockchain is formed by the Bitcoin software (blockchain) itself and by the miners or nodes that generate the cryptographic encrypted blocks and who all have a copy of the blockchain.

When any of the nodes wants to attack the network by modifying the information contained in any of the
contained in any of the blocks already generated, the blockchain itself will invalidate the attackers as long as the network is controlled by nodes that are not involved in the attack on the network itself.

Bitcoin is open source; its design is public, no one owns or controls Bitcoin and anyone can participate in it. Bitcoin is a payment system with qualities that no other known means of payment possess.
This gives it properties such as decentralisation, security, immutability of the information stored there, transparency, verifiability and innovation. This means that people have more and more confidence in it and it can be used as a store of value, as the value of the bitcoins that will be generated is limited to almost 21,000,000 BTC.

Source

In future posts we will talk about certain concepts described in the Bitcoin white paper that will give us a more complete understanding of the workings of this blockchain that has come to change the lives of many of us. We will talk about:

• Transactions
• TimeStamp or Time Stamp Server
• Proof of work
• The Network
• Merkle tree
• Privacy

This will help us to get a more accurate picture of this fantastic blockchain and help us to understand more about the strengths and weaknesses of Bitcoin.

Related publications:

1 - Beginner's guide..: Blockchain: core features..

2 - Main characteristics of blockchains - Bitcoin