On America’s Independence Day, it’s worth revisiting the history of bitcoin because both origin stories share a fundamental impulse: freedom from a system that controls our lives without giving us any contribution.
This impulse led to the signing of the Declaration of Independence on July 4, 1776.
Without trying to suggest that the two are equal in historical weight or cost – no lives were lost in the fight over cryptocurrency – the Bitcoin white paper that pioneered both crypto and blockchain was on point. respects a declaration of financial independence.
The pressure for independence comes from a financial system rather than a political system, of course, but a financial system which, according to its pseudonymous founder Satoshi Nakamoto and many of his followers and cyberpunk colleagues, could be just as oppressive and inescapable, and who had co-opted and corrupted the government in the same way that America’s founding fathers believed unrepresented British rule had done in the 13 colonies.
The Genesis Block Message
The clearest sign of this is the message encoded on the Bitcoin Genesis Block that launched the blockchain on January 3, 2009.
It’s short and simple, referencing a Times of London newspaper headline of that day, and it served two purposes.
Basically, it was some sort of cryptographic timestamp, showing that the blockchain had launched when they announced it. This is vital, because the timestamp attached to each block on the blockchain uses that timestamp – along with the cryptography connecting it to previous and future blocks – to show its place in the chain and make it immutable. This feature means that with enough decentralization, it is impossible to change the data or the order of the blocks.
See also: Crypto Basics Series: What is a Blockchain and how does it work?
But more importantly, it was a statement of principles. The message read: “The Times 03/Jan/2009 Chancellor on the brink of a second bailout for the banks.
This was in reference to the massive bank bailouts that occurred in many countries following the subprime mortgage crisis that began in 2007, creating and then bursting a housing bubble that led to the Great Recession. Not only was this caused by blatant greed and lies about the quality of debt being sold as safe, but no banker, broker or rating agency has ever been prosecuted for it.
Bitcoin was seen as a way to circumvent this system – and ultimately destroy it.
Read more: Blockchain Basics Series: What is Bitcoin and how did it get here?
The first line of the Bitcoin whitepaper describes it as follows: “A purely peer-to-peer version of e-money would allow online payments to be sent directly from one party to another without going through a financial institution.”
The goal was to create a “trustless” system, or a system in which two parties could transact in confidence without having to trust or even know the other party, and do so without a “trusted third party”. ” – a bank or other financial institution – among themselves.
See more: Crypto Basics Series: What is a Consensus Mechanism?
“You have to trust the central bank not to depreciate the currency, but the history of fiat currencies is full of breaches of that trust,” Nakamoto wrote in a post about a month after bitcoin was launched. “Banks have to be trusted to hold our money and move it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve.”
So without further ado, and with my apologies to Thomas Jefferson, et. al, here is a declaration of Bitcoin financial independence:
We hold these truths to be self-evident: that all consumers are created equal, that they are endowed by Satoshi Nakamoto with certain inalienable rights, among which are immutability, pseudonym and the search for lack of trust.
— That to guarantee these rights, Blockchains be instituted among the Peoples, drawing their just powers from the consensus of the minors,
– That whenever any form of financial system becomes destructive of these ends, it is the right of the people to modify or abolish it, and to institute new financial systems, laying their foundations on such principles and by organizing its powers in such a form as they find most likely to affect their privacy and financial freedom.