Satoshi Nakamoto’s white paper on Bitcoin

Satoshi Nakamoto’s white paper on Bitcoin

Previous blockchain blogpost

Today, many of the blockchain assets are tokens that are distributed as initial coin offerings. It constitutes the Internet’s second business model. Associated jobs have soared as its value has risen. Candidates who understand initial coin offerings, know how to write smart contracts, and have a good understanding of Ethereum would have an extra competitive edge. Interested applicants should read up the online literature on how blockchain works and be aware of the basics before applying in the field.

In my last blockchain blog series, I promised that I would wrap this segment by posting the white paper written and published by an anonymous hacker who goes by the pseudonym of Satoshi Nakamoto, the creator of Bitcoin. Since the publication is in PDF format and because it is too long for a single blog post, I have attached the link for anyone who might be interested to know more about the crypto science behind digital money.

Bitcoin: A Peer-to-Peer Electronic Cash System

Here is an abstract of the white paper:

A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution. Digital signatures provide part of the solution, but the main benefits are lost if a trusted third party is still required to prevent double-spending. We propose a solution to the double-spending problem using a peer-to-peer network. The network timestamps transactions by hashing them into an ongoing chain of hash-based proof-of-work, forming a record that cannot be changed without redoing the proof-of-work. The longest chain not only serves as proof of the sequence of events witnessed, but proof that it came from the largest pool of CPU power. As long as a majority of CPU power is controlled by nodes that are not cooperating to attack the network, they’ll generate the longest chain and outpace attackers. The network itself requires minimal structure. Messages are broadcast on a best effort basis, and nodes can leave and rejoin the network at will, accepting the longest proof-of-work chain as proof of what happened while they were gone.

Evolution of blockchain technology ecosystem

Evolution of blockchain technology ecosystem

Previous blockchain blogpost

Charlie Shrem the first Bitcoin felon went to federal prison in 2015 for 2 years. Upon his release he went about strengthening the ecosystem of blockchain. A real breakthrough came when he created a prepaid Dash debit card. He then joined Intellisys Capital and decided to raise funds in the form of initial coin offering but got cold feet, as he feared the intense scrutiny from the authorities and eventually backed off.

The Bitcoin community in the early days believed that the free flow of capital is a human right. The members were together in its sense of mission, which they considered was righteous. Because the digital currency circumvented central banks, many of its first adopters were libertarians, black marketers and anarchists who wanted to conduct business away from the watchful eye of the government. They were gleeful at Bitcoin’s impending triumph and enraged by any show of malice or incompetence by the big banks and the government.

Leads to collapse

Source: Twitter

Source: Twitter

A case in point is Charlie Shrem, the founder of Bitinstant, who was the first Bitcoin felon. He squandered the opportunity to make the company a world-beating one by helping drug dealers source funds. Upon his arrest, Tyler and Cameron Winklevoss, the venture capitalists, disavowed Shrem and would go on to scoop up 1% of all the Bitcoins. Depending on each person’s point of view, this fact makes Shrem either a martyr or a criminal who got what he deserved.

Job at Jaxx

After the release from prison, Charlie Shrem was ready to seize any suitable opportunity that came along to get in on the door. That lot fell to a full-time job as the head of business development at Jaxx mainly because the values of the company appealed to him. Shrem is no longer operating for himself but has landed a job at this startup that allows holding separate balances of different digital coins in virtual wallets. It also lets users exchange virtual currencies and digital money with one another all over the world. Anthony Dilorio, an entrepreneur who was also the co-founder of Ethereum, founded Jaxx too. The company wants to expand to China and Shrem will play a crucial role in that process. He is in charge of working with developers and turning relationships into revenue.

Right the wrong

Jaxx

Jaxx

Today, Charlie Shrem is a free man whose world has changed dramatically for the better and is using his skills to strengthen the community. He thinks that if he can build Jaxx, he will be an industry player again like old times. Having helped Bitcoin grow to a giant, he is confident he can tell which ones do not have real promise and which ones have. He expects to see technology where Bitcoin, Dash, Ethereum and other networks communicate. For instance, the balance in a Bitcoin wallet could trigger an Ethereum contact and vice versa.

Blockchain digital tokens

Today, many of the blockchain assets are not digital currencies like Dash or Bitcoin. They are tokens. They are different from digital money because they lack a blockchain. Instead, they run on existing blockchains and are built for specific applications, like a marketplace for computation, a blockchain-based advertising platform, or a crowd-sourced prediction market. These days $6.6 billion worth of digital tokens change hands every day, and the numbers are growing.

Initial coin offerings

The creation of digital currencies is through mining, but the production of tokens is through distribution in crowd sales called initial coin offerings. These crowd sales raise funds and give potential investors their first opportunity to grab a piece of the service. A token is a wealth-sharing mechanism where everyone, from hedge funders to consumers, places bets on or take positions in the future of the Internet. Several initial coin offerings have been launched already raising $230 million in 2016, followed by $450 million in 2017.

Digital token business

The tokenization craze constitutes Internet’s second business model, says Carlson-Wee a hedge funder who is backed by Andreessen Horowitz. Take the case of Facebook as a company issuing initial coin offerings as an example. If Facebook had published a token, with its value from the content and connections, then early users would have scooped up a significant amount of those tokens at low prices. Late adopters might have found themselves able to afford just a few. But all who were holders of this digital asset would have been able to participate in the growing success of Facebook. But, of course, this is not the case, and that is not how it works neither is it as easy as that. Only Mark Zuckerberg and company stockholders share the value of Facebook. Most other platforms operate on the same principle where their owners extract value from interactions between users.

Career in blockchain

Careers in Blockchain

Careers in Blockchain

It is the cryptocurrency gold rush era, and associated jobs have soared as its value continues to rise. According to the job site Freelancer, cryptocurrencies have been one of the rapidly growing online jobs. The practice of code-breaking known as cryptography, which is central to cryptocurrency, has also seen an increase in interest on the site. According to Zippia.com, a career website, most cryptocurrency jobs are for developers with tech skills including building full stack applications. Companies are searching en masse for qualified developers, promising substantially high salaries.

Skills worth sharpening

Job candidates who understand initial coin offerings would have an extra competitive edge. It is a method borrowed from the financial sector whereby capital is raised by putting up a new virtual coin for public sales. Knowing how to write smart contracts and a good understanding of Ethereum is another skill worth sharpening.

Awareness of basics

A variety of literature on what Bitcoin is and how it works is readily available online. Interested applicant should read it up to be aware of the basics before applying in the field. But every blockchain-related job does not require a comprehensive grasp of the technology. Most of these companies also hire people in marketing, communications and human resources, just like any other business.

No unified source

Although cryptocurrency jobs are booming, there are no centralized locations to find them. A simple search on Google for initial coin offerings and token sales will bring up some startups in the blockchain space. Looking beyond traditional job-listing sites would help too and is highly recommended. Looking at specific Bitcoin forums can help find job listings in the industry and keep up with what is happening. Being involved in the cryptocurrency community creates more authentic and reliable means of detecting positions and networking.

Coming up next:

The publication of the white paper written by an anonymous hacker who goes by the pseudonym of Satoshi Nakamoto, the creator of Bitcoin.

Cryptocurrency felon during and after prison

Cryptocurrency felon during and after prison

Previous blockchain blogpost

Charlie Shrem was among the pioneer public faces of cryptocurrency. He co-founded a startup company in 2011 called BitInstant that was one of the earliest cryptocurrency companies processing a third of all Bitcoin transactions. In 2015, Shrem went to prison for two years for aiding an unlicensed money transmitter acquire Bitcoins to trade in the underground marketplace, where it was used to buy drugs. It was a felony that is the first of its kind in the crypto world.

Charlie Shrem entered prison in 2015 after medicating himself with vodka just before his incarceration. In the federal prison camp in Pennsylvania, Charlie Shrem began frequenting the library. It became Charlie Shrem’s sanctuary where he would stay in for hours and read 137 books.

Value of currency

Shrem found himself mulling over the question of what made money worth anything

Shrem found himself mulling over the question of what made money worth anything


Shrem found himself mulling over the question of what made money worth anything. Luckily, the jail economy provided the answer as the prison had its cash, mainly packets of mackerel. For those prison inmates in Lewisburg, sachets of mackerel were an ideal form of coins. Inmates serving long sentences would use stockpiles of mackerel as a store of value, much like a savings account. Gradually he came to believe that the acceptance of any form of money is mostly a social convention. But it was true that some features could make one currency more suitable than another.

Halfway house life

In 2016, Charlie Shrem was transferred to a halfway house and says that living not merely with embezzlers, drug dealers, and fraudsters, but also with murderers, child molesters, and bank robbers was worse than prison. One of the conditions of residency at the house was gainful employment and making money via Internet did not qualify. Therefore, during his time in the halfway house, Shrem worked as a dishwasher for $8 an hour. 

Life after prison

After serving time in prison, the 27-year old Bitcoin pioneer was looking for a real comeback. It was a time when Bitcoin and other digital currencies were about to explode in epic proportions, and their value had already risen to up to six times its previous price. When he tried to visit an online exchange, one of his old haunts, where he had once played with altcoins, he found that all familiar landmarks had gone. The website no longer existed and even the jargon and terminology had changed drastically. It was humbling for Shrem to realize that the Bitcoin community had changed in his absence. 

Rise from fall

Out of the gates, Bitcoin’s first felon took the same stance with the blockchain industry and set about catching up on everything he missed. He gracefully rose from his fall and found a new mission with a determination. Since his release, he started building the Internet’s future by strengthening the ecosystem of the blockchain. In this newly diverse ecosystem, Shrem has positioned himself to play a significant role not only as a coder but also as a connector. Although, after his comeback, he has fallen once on the wrong side, he claims that he is different now. 

Virtual money rivalry

Cryptocurrencies

Cryptocurrencies

When Shrem was one of the first in the game, Bitcoin was the only virtual currency. Now that it has given rise to more kinds of digital money, he is embracing the transformation. He agrees with other pioneers that there will be not just one supreme digital currency but instead many because there is a crypto-pluralism taking hold right now. That may make Shrem the perfect poster child, as cryptocurrencies transition from a form of exchange favored by those who reviled any establishment into a rapidly growing mainstream system. The old Shrem and the likes were not above taking advantage of such a situation either. 

Dash debit card

As Dash took off, Shrem decided to get involved and proposed creating a prepaid debit card. The cardholder can load it with coins, convert them into dollars and use it at any company that accepts a Dash debit card. That way hundreds of millions of digital dollars can enter the mainstream economy. Dash-funded debit cards are several, but Shrem’s innovation would be the first to be used in America. Eventually, it allowed users to convert cash into Bitcoins at conventional banks such as Bank of America and Wells Fargo, at hundreds of thousands of locations across Russia, America, and Brazil including 7-Eleven and Walmart. His plan garnered overwhelming support because people within the Dash universe take someone like Shrem very seriously and reputation plays an important role. Its price shot up to $266/- from $50/- and Shrem became a millionaire overnight again. But expecting more than that was foolhardy and he decided that it is better to let each cryptocurrency do what it does best. 

Digital token sales

Having seen that the new frontier was token sales, Charlie Shrem became the technology officer of a startup, Intellisys Capital, that he predicted would revolutionise the investment world. The plan was to raise funds by issuing blockchain digital tokens as initial coin offerings. The issue was that under American law this would undoubtedly be classified as a security. The decision was made by the company to bar British and American citizens from participating in it to avoid legal trouble. But the idea also had other drawbacks as they would have to depend on partners to vet investors for them. Shrem was back in pitch mode and became the face of the venture, touting Intellisys to the public and the press. He described the proof of concept, a waste-management company, as the fund’s first investment. 

Mired with doubts

As the date approached, Shrem had doubts in his mind and began to get cold feet. A person, already convicted of a financial crime once, selling security would bring intense scrutiny. This thought increasingly made him nervous, restless and sleepless for months leading to the sale. Fortunately for Shrem, fate intervened, and he decided to walk away because it was a bomb. It was easier to take a risk and tarnish his reputation than live in constant fear all his life. 

Taking it easy

Charlie

Charlie

The failure of Intellisys cost him, but Charlie Shrem wants to make the right comeback. He had moved with his fiancée to Sarasota and is living with her in a rented pink townhouse. His abundant off-hours, he spends on relaxing on the beach, boating, eating in upmarket restaurants, and Jet Skiing. Today Shrem is more patient and mellower and less arrogant and cocky than in the past.

Coming up next:

Today, many of the blockchain assets are tokens that are distributed as initial coin offerings. It constitutes the Internet’s second business model. Associated jobs have soared as its value has risen. Candidates who understand initial coin offerings, know how to write smart contracts, and have a good understanding of Ethereum would have an extra competitive edge. Interested applicants should read up the online literature on how blockchain works and be aware of the basics before applying in the field.