12 years ago today, Satoshi Nakamoto released version 0.1 of an experimental but set in stone digital money protocol known as Bitcoin. It’s been a tumultuous 12 years, but this year is special—it sees Bitcoin celebrate its birthday with the original protocol restored.
Bitcoin, restored to its original form as Bitcoin SV (BSV), has unbounded scaling capabilities and not only functions as Satoshi’s “peer to peer electronic cash system” but is also capable of processing and verifying all the world’s data. Bitcoin isn’t just an economic layer for the internet, its blockchain is able to be the internet.
Why is January 9th Bitcoin’s birthday?
On this day in 2009, Dr. Craig Wright (under the pseudonym Satoshi Nakamoto) released Bitcoin v.0.1 on Sourceforge. The first block was mined using proof-of-work, and from that point on anyone with an ordinary Windows PC could participate.
We also marked January 3 as an anniversary. That was the date Satoshi created what’s now known as the “Genesis Block,” or Bitcoin block #0. The keys to block #0 were pre-computed using external software and hard-coded into the block, thus it wasn’t “mined” the usual Bitcoin way. Since no-one else could join in until the protocol was available to all, January 9, 2009, and block #1 mark a more appropriate Bitcoin Birthday.
Things didn’t all go smoothly from there. The late Hal Finney was Bitcoin’s second-earliest adopter, receiving the first Bitcoin transaction a few days after the software release. Dr. Wright has credited Finney with helping keep the early Bitcoin network running in that first month after it “fell over” several times. Wright’s friend Dave Kleiman also provided advice on getting everything back on track.
Those first string of days between January 3 and 9, 2009, saw the network (which at that stage consisted of 69 computers, all Dr. Wright’s) restart unexpectedly, requiring Wright to frantically travel between distant locations and update Microsoft licenses to get them all online again.
The 12 years since
From its earliest years, the Bitcoin network’s earliest participants questioned how the network could scale to handle payments for everyone on Earth. To provide some context, the VISA network alone has over 3.3 billion cards issued and can handle over 65,000 transactions per second. Bitcoin would need to compete with that, and more.
Once other developers joined in, and especially after “Satoshi” left the Bitcoin project in 2010, alterations were made to the protocol rules that changed the way it handled transactions—especially those based on timing (nLockTime). Almost immediately upon his exit, Nakamoto’s development repository was moved from the central development focused Sourceforge repo and relocated to GitHub, which is more typically used for communal development. Soft forks became the norm, undermining the role of honest nodes and giving more deliberate power to software developers with repository keys. Pay to Script Hash (P2SH) arrived in 2012 to replace Bitcoin style multisignature wallets. In 2016, BIP 125 introduced “Replace by Fee” (RBF) protocol which allowed transactions in the mempool to be rebroadcast to a different address than the original transactions—fundamentally undermining the reliability of instant transactions.
The other big issue was block size. While many said Bitcoin could handle the extra traffic simply by increasing the transaction block’s maximum size over time, others argued this couldn’t be done—the network didn’t have the bandwidth and it would create massive amounts of data; too much for small, independent networks to handle.
Dr. Wright has always argued that advances in technology hardware would accommodate this growth, and that “mining” (now known on Bitcoin as “processing”) would become a professional pursuit rather than a hobbyist interest.
The “scaling debate” never went away though, becoming near-religious in its fervor and eventually leading to a split in the network in August 2017. BTC, which falsely claims to be the original Bitcoin but is actually an airdropped token, allowed control of the protocol to remain with its core group of centralized developers, and also altered the protocol to remove digital signatures from the transaction block data (aka “segregated witness,” or SegWit).
The group favoring “big block,” on-chain scaling first continued the Bitcoin protocol issuing the new ticker symbol BCH in 2017. The Bitcoin network later split again, in November 2018, with centralized protocol developers airdropping BCH, and Bitcoin took the new ticker symbol BSV. The developers following Satoshi’s Vision as outlined in the original Whitepaper vowed to restore the Bitcoin protocol to its original form and prevent anyone from altering its basic rules forever after.
BSV achieved this goal in February 2020, just after Bitcoin’s 11th birthday, calling its restored protocol software update “Genesis,” or Bitcoin v1.0.0. Genesis also removed all maximum transaction block size limits, finally allowing Bitcoin to process as much data as it needed, at minimal cost to ordinary users. The update also restored the original Script language which was disabled many years ago.
Bitcoin may have just turned 12, but it’s been a rough 12 years. We can say at least that enough people had the vision to maintain Bitcoin’s original purpose, taking guidance from Satoshi himself to restore a network that was always destined for greater things.
Bitcoin’s blockchain is now ready to be the world’s universal ledger of truth, processing all data from payments between individuals to millions of “nanotransactions” from connected devices. It’s a great accomplishment and so now, more than perhaps any other year before it, we’re happy to celebrate Bitcoin’s birthday and continue to imagine what comes next.
New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.