With the world changing and moving towards total decentralization, it is clear that cryptocurrencies are becoming a major part of our lives. A lot of major companies have adopted cryptocurrencies while some countries are making moves to legalize them. Given the fact, it is important to understand the concept of these digital currencies and also know how they came to be.
In this task, we would talk about Satoshi Nakamoto and take a recap on the definition of cryptocurrencies before delving into the Genesis Block concept.
What are Cryptocurrencies?
The term Cryptocurrency originates from the word Cryptography. Cryptography is a make up of the words “Crypto” which means hidden or secret and “Graph” which means to write. Cryptography can simply be defined as the art of transmitting secure or secret messages that can only be understood by the recipient.
The art of cryptography is really more technical with a lot of advanced encryption. Without this, cryptocurrencies would not be so successful. Cryptography is in fact what makes cryptocurrencies anonymous and secure tackling any attempt of double-spending. Thanks to this, transactions in cryptocurrencies can be facilitated without the intervention of a third party.
A Cryptocurrency can be defined as a digital or virtual currency that functions with cryptography on a blockchain. It is a makeup of computer codes that represent an online store of value in the form of coins or tokens on a distributed ledger.
Cryptocurrencies function on a peer-to-peer level meaning there is no central authority that controls them. It is unlike the banking system that oversees the daily transactions and accounts of their customers. Owners of cryptocurrencies have full control of their assets and can do anything with them.
A type of cryptography used in cryptocurrencies involves a public and a private key that come together. The public key is the address of a wallet while the private key is used to sign transactions. When coins are sent to an address they become encrypted on the public key and the transfer of ownership is recorded on the ledger. These coins can only be decrypted by the private key. Without the private key, there is no proof of ownership and the message (coins) remains encrypted. This is why your coins cannot be stolen without the private key.
The concept of cryptocurrencies have been around for a while but it saw great success thanks to the work of Satoshi Nakamoto.
Who is Satoshi Nakamoto?
Satoshi Nakamoto is a very important name in the crypto world. The name belongs to the person(s) that are attributed to the adoption of Blockchain technology, writing the Bitcoin Whitepaper and the creation of the first cryptocurrency, Bitcoin.
Satoshi Nakamoto is believed to have created the bitcoin.org domain in 2008 and published the Bitcoin Whitepaper with the title "Bitcoin: A Peer-to-Peer Electronic Cash System" in the same year. In the Bitcoin Whitepaper, Satoshi Nakamoto properly described how the Bitcoin project would function. Together with other blockchain enthusiasts and developers, Nakamoto worked on this project. In 2009, Satoshi Nakamoto mined the first Block of the Bitcoin blockchain known as the Genesis Block.
Nobody knows if the name, Satoshi Nakamoto, really belongs to the Bitcoin founder or if it is just an alias. Most people believe that the name isn’t real so currently it is considered a pseudonym. There have been several attempts to identify or link the name to someone but none has been conclusive. Although we might not know who Nakamoto really is, it is safe to say that this person(s) gave the world a solution at a time it seemed like the conventional banking system had failed. Cryptocurrencies have now become revolutionary all over the world and it all started with the Genesis block.
The Genesis Block
The word “Genesis” is used to refer to the beginning of something. Similarly in blockchain terms, the Genesis block of a Blockchain is the first block that was mined on that blockchain. As the first block, there would be no block before it. This block is either depicted as block 0 or block 1 depending on the blockchain.
The Genesis block serves as the foundation of the blockchain and defines how other blocks would be formed to make up the entire chain. All blocks in the blockchain are linked by their hash all the way to the Genesis block.
Bitcoin Genesis Block
For Bitcoin and every other cryptocurrency, this Genesis block is how it all began. I regard to it as “the beginning of the beginning” because it was what started the first cryptocurrency, Bitcoin.
It is believed that on the 3rd of January, 2009 at 18:15 UTC, Satoshi Nakamoto initiated a transaction that led to the mining of the Bitcoin Genesis block. This single event would later lead to a wide creation and adoption of cryptocurrencies which is still happening more than 12 years later.
The hash of this block is
The block is depicted as Block 0 and it had a block reward of 50BTC. To view this block, simply paste the hash above in the search bar of the Block Explorer
The Block reward for this block was received in the wallet address 1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa
There, they remain untouchable and seemingly unspendable.
Checking the wallet on the Explorer, we would notice that there are more then 50 BTC available. At the time of writing this, there are 68.52164819 BTC from 3,025 transactions.
Bitcoin has changed millions of life that people deem it right to send some coins in appreciation to Nakamoto. The coins are a type of offering to Nakamoto in a way to say “Thank you and we will never forget you".
Mining a Bitcoin block was easier back then because the network was not very large. The block time for Bitcoin is 10 minutes. This means it takes approximately 10 minutes to mine a block. To maintain this rate, the Bitcoin blockchain makes it harder to mine a block as the network increases. Although the normal block time is 10 minutes, Block 1 was not mined until 6 days after the Genesis block.
Some believe that Satoshi tried to mimic the story of the world being created in 6 days. Others believe that the delay was because the network was being checked and tested for any errors.
The Coinbase Transaction and Satoshi’s Secret Message.
When Mining blocks, miners always trigger a type of transaction called a Coinbase Transaction. This type of transaction is the first transaction in a block and it is the one that rewards the miners.
For the Genesis block, the Coinbase transaction is the only transaction in the Block.
Checking the input section, there is a message in Hexadecimal base.
The Hex Sigscript is given below;
Converting this to normal text, it would read:
”The Times 03/Jan/2009 Chancellor on brink of second bailout for banks."
The statement matched the headlines of an article from The London Times Newspaper that was published on the same day the Genesis Block was mined.
Nakamoto did not explain what the message meant but people have come to believe that it was to reemphasize on the failed state of the conventional Banking system. Personally, I agree with the thought.
Significances of the Bitcoin Genesis Block
A setting stone for the Bitcoin blockchain: The Genesis block is a measure of orderliness in a Blockchain and it defines how data should be stored in it. The Genesis block is a model for every block on the Bitcoin blockchain. The careful systematic order of the contents of this initial Block is followed by other blocks and determines the criteria to be met for a new block to be mined.
The birth of Cryptocurrencies: Bitcoin is considered the first successful cryptocurrency. This crypto coin inspired the creation of other cryptocurrencies and in a decentralized fashion too. 12 years after Bitcoin was created, there are currently over 10,000 cryptocurrencies and it all began with the Genesis Block.
An awakening of blockchain technology: The invention of Bitcoin is regarded as the first application of the Blockchain idea which had been dormant for years. The single event of the Genesis Block mining opened doors of possibilities to the applications of Blockchain in the real world. Now, the technology is being used to meet several problems around the world.
The Ethereum Genesis Block
Anyone just starting the crypto journey would likely hear about Ethereum. Just like Bitcoin, Ethereum has its own Genesis block.
Back in 2013, Vitalik Buterin, a 19 year old programmer, proposed a blockchain project that developers would thrive on. The de emperor Ethereum began with a couple of prototypes released. The last prototype, Olympic, was released in May 2014 with a bounty of 25,000 ether for users to stress test the blockchain. Finally, on the 30th of July, 2015, Frontier was released as the first official version of the blockchain, Ethereum 1.0. Frontier was launched with the mining of the Genesis block which had 8893 transactions from an earlier pre-sale of ether.
The has of this Genesis block is
We can check the block details on https://etherscan.io/block/0
The Steem Genesis Block
Step 3: Click Ok for Block 1
Step 4: You would be able to see the details of the Genesis Block.
Below I highlighted some basic details:
- Timestamp : 2016-03-24 17:05:00 UTC + 1
- Block ID : 0000000109833ce528d5bbfb3f6225b39ee10086
- The Previous Block ID is no available because there is no block before it : 0000000000000000000000000000000000000000
- Witness : initminer
Step 5: You can go ahead and sign in to SteemWorld from the top right corner.
The gift of cryptocurrencies have changed our view of finance and value. Although there had been other attempts to introduce these digital currencies, the idea became a reality with the success of Satoshi Nakamoto’s Bitcoin. By mining the Genesis block, Satoshi Nakamoto began the era of cryptocurrencies that have revolutionized the financial system. Today, there are numerous cryptocurrencies and it is safe to say that the idea will not disappear anytime soon.
You are required to attempt just one question
1a) What is the Genesis block?
b) What are the significances of the Genesis Block?
c) Explore the Bitcoin Genesis block and indicate how many transactions so far and the number of bitcoins.
2a) Who is Satoshi Nakamoto?
b) Explore the Coinbase Transaction of the Bitcoin Genesis block.
c) Find and decrypt Satoshi’s secret Hex message. What do you think the message means?
3a) What is a Cryptocurrency?
b) What is Cryptography and how does it make cryptocurrencies secure?
c) Explore the Steem Genesis Block and Sign in as proof of completion.
(1) Your article should be at least 300 words.
(2) This homework task does not have an expiry, however, you can submit your assignment only once.
(3) Eligibility Criteria--
- Must have a reputation of 50 or above
- Must have at least 150 SP (excluding any SP delegated-in, Delegating to vote buying services is viewed negatively)
- Must have completed Achievement Task-4 in Newcomers' Community
(4) Add tag #academys4-intro03 #cryptoacademy in your post and should be among the first five tags. And also make sure you post in the Steemit Crypto Academy community.
(5) You can attempt any one out of the three questions, but you must write the entire Question in Bold letter at the beginning of the post.
(6) Your homework title should be [Your Title] - Steemit Crypto Academy Season 4 - Homework Post for Task 3