The white paper that conceptualized blockchain technology, and also named Bitcoin, was published 13 years ago on October 31, 2008.
- Thirteen years after its creation, Bitcoin continues to fulfill its mission of economic equality for all who wish without a banking or financial intermediary.
- Over the past decade, Bitcoin has produced annualized returns of over 230%, 10 times greater than any other asset class for the same period.
Yesterday marked the 13th anniversary of Satoshi Nakamoto’s publication of the original Bitcoin white paper titled “Bitcoin: a peer-to-peer electronic payment system“, on October 31, 2008. The document is only nine pages, consisting of only 3,192 words, and its author is an anonymous mystery. No one knows if it was a person or a cabal of rogue developers who wrote the article that surfaced in the cyberpunk community during the global monetary collapse of 2008.
Fans of the first modern cryptocurrency marked the anniversary with social media posts and memes. Blockchain and crypto investment firm Pantera Capital converted the pages into wallpaper and used them to decorate its offices. While Cameron and Tyler Winklevoss, the billionaire founders of crypto exchange Gemini, reportedly signed a three-year deal to spin 150 phrases from the white paper on a high profile billboard, which previously promoted CNN, in New York. The Winklevoss twins then plan to convert images from each of these outdoor advertisements into small-scale NFTs for sale.
Why was Bitcoin even necessary?
Needless to say, support and adoption for cryptocurrencies – Bitcoin in particular – continues to grow all these years later, and here’s why.
As discussed earlier, the 2008 financial crisis came to a head after years of unfettered promotion and the use and sketchy bundling of financial vehicles, including subprime mortgages and underfunded credit default swaps. . Major banking and financial fiefdoms propelled these assets to the top, then pocketed massive gains before the fall, cracking the US economy and others around the world.
The author or authors of the Bitcoin white paper decided to put their eggheads together and outline a slick software solution – that’s what cryptocurrencies are at their core, software just like the apps on your phone – which allows foreigners to engage in direct economic transactions with each other without the need for banks, lenders or financial intermediaries. “What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing two willing parties to transact directly with each other without the need for a trusted third party,” reads an excerpt from the Bitcoin whitepaper.
Bitcoin – the best performing asset of the decade??
Since its inception, Bitcoin has been both extremely volatile and extremely profitable. In a tweet from March this year, Charlie Bilello, CEO of Compound Capital, declared Bitcoin the best performing asset of the decade and backed it up with data to prove it.
According to the graph tweeted by Bilello, Bitcoin has produced over 230% return on an annualized basis over the past 10 years, which was 10 times better than the next best performing asset class, the Nasdaq 100. Bitcoin has beat all other assets, including: US large cap equities; REITs; preferred shares; Treasures; junk bonds; high quality bonds; gold; U.S. dollars; and goods.
Despite these findings, many outspoken and powerful critics continue to claim that Bitcoin is “worthless” while others liken it to a Ponzi scheme, gambling, “squared rat poison” and the trope obligation of the “investment bubble”. But 13 years into this Bitcoin phenomenon, which has a current market capitalization of $1.16 trillion, if it is in fact a bubble, it must be a hard and resilient bubble.
Moreover, it is hard to ignore the influx of funds from institutional investors into the Bitcoin “bubble” this year alone. And the last time I checked, this class of investors generally don’t invest in scratch cards or three-card games. Thirteen years after its creation, Bitcoin continues to fulfill its mission, while its detractors continue to miss it.
In its application, the Bitcoin Whitepaper continues to aspire to its written promise of economic equality by using only a mobile device to engage in instant, cheap, person-to-person, encrypted global financial transactions for 1, 7 billion unbanked people on the planet who do not have access to a current account. It’s an idea worth celebrating.
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