Happy financial crisis! Satoshi, Bitcoin and the Lehman Brothers

The climax of the global economic crisis celebrates its sad 10th anniversary on 15 September. The US bank Lehman Brothers collapsed. Reason enough to come up with an alternative to the existing monetary system. The Bitcoin story: Lehman Brothers, Satoshi Nakamoto and the Bitcoin White Paper.

The Bitcoin story is related to the financial world as the Bitcoin price is linked to the dollar. Somehow they do not get off each other, although one is strictly the alternative to the other. As we take today, the 15.09.2018, the occasion to tell the story of how Bitcoin was reckoned in the world again. For the 10th anniversary of the banking crisis here a (slightly modified)

Excerpt from the Bitcoin Bible:

Two million pizzas

The world economic crisis

The year is 2008. The global economic crisis is in full swing - the United States real estate bubble has burst, other countries are slowing. On 15 September, the event reaches its premature climax, as the US bank Lehman Brothers collapses. As a result, the financial crisis is forcing countries to rescue the existence of banks such as UBS or Commerzbank with large sums of money.

The indebtedness of many states rose to dizzying heights. Corporations such as General Motors filed for bankruptcy, the American International Group insurance is not nationalized. In October of the year, the International Monetary Fund estimates the fall in the value of mortgages to a total of 580 billion US dollars.

The White Paper by Satoshi Nakamoto

The following month, November 1, 2008, an encrypted e-mail from a certain Satoshi Nakamoto made the rounds in a mailing list that should make waves:

I've been working on a new electronic money system that works entirely on a peer-to-peer basis and without a trusted third party. The paper is available at http://www.bitcoin.org/bitcoin.pdf.

In addition to the main features of his planned electronic money system, he added a note explaining the monetary system. Here the translated original text:

Exposé: A pure peer-to-peer version of electronic money would make it possible to send online payments directly from one party to another, without the need of a financial institution as a mediator. Although digital signatures can already do this in part, the biggest advantages are nevertheless lost: In order to prevent double-donating, trust in a third party is still necessary. We suggest a solution to the double-spending problem by using a peer-to-peer network. The network timestamps transactions by inserting them into a continuous hash-based proof of work chain. This chain then represents a constant protocol.

Not only does the longest chain prove the order in which the operations have expired, it also proves that the greatest amount of computational computing power was spent on it. As long as the majority of computing power is controlled by nodes that do not cooperate with each other to attack the network, they will generate the longest chain and hang off attackers. The network itself only needs a minimal structure. Messages are delivered on a best-effort basis, and nodes can arbitrarily leave and rejoin the network by accepting the longest proof-of-work chain as evidence of what happened in their absence - Satoshi Nakamoto

Sender: Unknown

Who has written this message, is not clarified until today. Again and again curious people tried to locate the person or group of people behind the pseudonym Satoshi Nakamoto. Initially, he worked with an open source team. He put a lot of emphasis on not disclosing any personal information.

In 2009, Satoshi Nakamoto released the first Bitcoin client and communicated with the Bitcoin community until the end of 2010. Then he disappeared from the scene without a trace. Analysis methods of the white paper from the criminalistics, searches on forums or inquiries in its orbit did not lead to exact results.

Laszlo and the Bitcoin pizzas

On May 18, 2010, another message appeared in the online forum bitcointalk.org, which should strike similarly high waves:

I paid 10,000 bitcoins for a few pizzas. Maybe two big ones, that I have something left the next day. I like pizza leftovers for later nibbling on it. You can make the pizza yourself and bring it home or order it at a delivery service. What I want is to get food delivered in exchange for Bitcoin without having to cook it myself. Like a breakfast plate in the hotel or something - they just bring you something to eat and you're happy! I like onions, peppers, sausages, mushrooms, tomatoes, salami etc. But just the standard stuff, nothing funny with fish or anything. I also like very simple cheese pizzas, which may be cheaper to prepare or to get. If anyone is interested, let me know and we can negotiate a deal. Thank you, Laszlo.

After four days Laszlo then announced that he got pizza for his 10,000 Bitcoins. What he did not know: The 10,000 bitcoins should be in November of the same year over 2,000 euros, two years later just under 40,000 euros and in December 2017 over 160 million euros worth. But by injecting bitcoins into the commodity cycle, he has done some pioneering work. Only then could the digital coins get a countervalue.

The party goes on

Since Satoshi published his white paper and pioneered Laszlo by making Bitcoin a barter object, a lot has happened at Bitcoin. The economic climax had the Bitcoin story probably in December last year: Since swelled the often cited bubble so that more speculation than utility was in the game - it had simply been too much air in Bitcoin pumped. But also the current happenings around Mt.Gox, Dread Pirate Roberts and the mysterious Wallet 1933p show: With its tender ten years the good Bitcoin still has to grow properly.

Nevertheless I wish: Happy financial crisis and Happy Bitcoin Birthday!