What is Bitcoin Genesis Block?

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January 3rd marks the day when Bitcoin blockchain started working. Some refer to this day as the real birthday of Bitcoin, despite 31st of October when Satoshi Nakamoto published the Bitcoin white paper. January 3rd was the day when the first block was mined, and the first 50 Bitcoins were issued to Satoshi Nakamoto. Eventually, people started calling it “block 0”, although previous adaptors called it Block 1.

What is Bitcoin?

Ten years ago the Bitcoin white-paper, also called as “Bitcoin: A Peer-to-Peer Electronic Cash System” was first published. It was posted by an anonymous pseudonym Satoshi Nakamoto on October 31st, 2008. To this day people are still exchanging opinions on what, who or they are.

The definition says that Bitcoin is a peer-to-peer (P2P) electronic cash system, as described in the white-paper. It was first published on October 31st, 2008 by Satoshi Nakamoto. Because of blockchain technology, Bitcoin can offer a completely transparent way to transact payments. This system can entirely question the need or importance of Banks and other similar money transfer institutions. It ultimately allows sending money from one peer to another (peer-to-peer). Thus getting rid of the third-party instances such as Banks.

Coinbase transaction

The coinbase, basically, is the input of a generation transaction. While regular transactions use the input section to refer to their parent transaction outputs, a generation transaction has no parent and creates new coins from nothing. The coinbase gives the possibility to contain any arbitrary data. And, interestingly enough, the Genesis Block includes a rather famous message:

“The Times 03/Jan/2009 Chancellor on brink of second bailout for banks”.

The Genesis block with the interesting note

Originally, that was a headline in The Time magazine on January 3rd, 2009. Some say that Satoshi intended this to provide proof that this is the first block. Others vary in speculations that this kind of proves that Satoshi Nakamoto was living in the United Kingdom or that the text might have a meaning about Bitcoins purpose.

The Time magazine on January 3rd, 2009.

The first block reward

In the first block which was mined in the Bitcoin blockchain, the reward was 50 BTC. It went to address 1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa.

An interesting fact is that these coins cannot be spent due to the Bitcoin code. So even if Satoshi once came out and wanted to claim these 50 BTC, he couldn’t. It is not entirely sure if this was done on purpose. A Redditor who goes by the nickname theymos, explained it very well:

“This is how the Bitcoin client worked when Satoshi created it: The client maintains a block database and a transaction database. When it finds that its block database is empty, it inserts the genesis block into its block database to get things started. This block includes a transaction sending 50 BTC to 1A1z…, but the client does not insert this transaction into its transaction database. So even though this transaction is part of the blockchain, if the client sees a transaction spending this 50 BTC, it won’t be able to find the 50 BTC transaction in its transaction database, and the spending transaction will be rejected. In other words, the genesis block’s transaction isn’t considered to be a “real transaction” by the original Bitcoin client.”

Since then, people supporting the Bitcoin movement and the creation of Bitcoin blockchain has sent small amounts of donations to the address. For example, today, January 3rd, 2019, at 11:10 AM UTC, the address already has received six gifts. The amounts vary, but overall they are tiny amounts. Over time, the genesis address has collected more than 16 BTC, altogether from 1492 transactions.

Recently transacted donation with a very interesting Bitcoin address.

BitMEX advertisement on The Time cover!

BitMEX advertisment on the front page of The Time on January 3rd, 2019.

On January 3, 2019, 10 years after the creation of Bitcoin, BitMEX has purchased an ad placement on the cover of The Time magazine. It says “Thanks, Satoshi. We owe you one. Happy 10th birthday, Bitcoin”. Below this ad is a block hash. When opening the transaction coinbase, we see a message which reads:

 “w#\/ ThanksSatoshi /BTC.COM/��mm,���CA4Z_IGQ�~YVM܈H����{�|�|###B#b)#�”.

Bitcoin block timestamp

The average block time in the Bitcoin blockchain is 10 minutes. Referring to this, it seems rather odd that the next block was mined only six days later. There are many speculations on why this happened. Some say that it could be that Satoshi mined the first block with a backward timestamp to match the edition by The Times. Another opinion is that Satoshi actually was mining all these six days with the same timestamp because of the block’s low hash. 

Raw block data

The raw HEX version of the Genesis block looks like:

Image from Bitcoin Wiki

However, broken down it looks like:

01000000 – version
0000000000000000000000000000000000000000000000000000000000000000 – prev block
3BA3EDFD7A7B12B27AC72C3E67768F617FC81BC3888A51323A9FB8AA4B1E5E4A – merkle root
29AB5F49 – timestamp
FFFF001D – bits
1DAC2B7C – nonce
01000000 – version
01 – number of transaction
01 – inputs
0000000000000000000000000000000000000000000000000000000000000000FFFFFFFF – prev output
4D – script length
04FFFF001D0104455468652054696D65732030332F4A616E2F32303039204368616E63656C6C6F7 2206F6E206272696E6B206F66207365636F6E64206261696C6F757420666F722062616E6B73 – scriptsig
FFFFFFFF – sequence
01 – outputs
00F2052A01000000 – 50 BTC
42 – pk_script length
04678AFDB0FE5548271967F1A67130B7105CD6A828E03909A67962E0EA1F61DEB649F6BC3F4CEF3 8C4F35504E51EC112DE5C384DF7BA0B8D578A4C702B6BF11D5F – pk_script
AC – OP_Checksig
00000000 – lock time

Source:

cnn.com
btc.com
bitcoin.it/wiki/Genesis_block
bitcoin.it/wiki/Coinbase
https://www.reddit.com/r/Bitcoin/comments/1nc13r/the_first_50btc_block_reward_cant_be_spend_why/
bitcointalk.org
blockchain.com/btc

Photo by NASA.

Happy Birthday, Bitcoin!

If you like what you read, feel free to share it:

Ten years ago the Bitcoin white-paper, also called as “Bitcoin: A Peer-to-Peer Electronic Cash System” was first published. It was posted by an anonymous pseudonym Satoshi Nakamoto on October 31st, 2008. To this day people are still exchanging opinions on what, who or they are. Some speculate that he could be British because of the Japanese-like pseudonym. That is because of his perfect English in his posts. Also, people believe that that might be a group of people rather than just one. Nevertheless, there have been multiple people claiming that they are the real Satoshi Nakamoto. Also, many journalists have tried to find out who the mysterious creator of Bitcoin is, but all evidence is circumstantial. 

What is Bitcoin?

Bitcoin along with Satoshi Nakamoto presented an entirely new alternative to the traditionally centralized currency transactions. A system built by the people for the people. So the primary intent is that people are the ones, who control it. Because of blockchain technology, Bitcoin can offer a completely transparent way to transact payments. This system can entirely question the need or importance of Banks and other similar money transfer institutions. It ultimately allows sending money from one peer to another (peer-to-peer). Thus getting rid of the third-party instances such as Banks.

How Bitcoin has performed over the years.

The first data on Bitcoins’ (BTC) price goes back to July 7th, 2010, when the price was $0.05. So the first bull-run took it to $18.89 in May 29th, 2011. Then it went in a bear market for almost a year, cutting the price back to around $5. After that, a year of a slow bull market sent the price to $14, and at the beginning of 2013, it exploded to $142. Not long after, it surged its way to the first four-digit price – $1,205 in 2013 November. Then BTC went in on a two-year-long bear market lowering the rate to $228.50 in August 2015.

The biggest bull-run in Bitcoin history

After that, a three-year-long bull market began. The price completely exploded and reached unbelievable heights. The cost of one BTC was $19,000! In some exchanges, it reached even $20,000! Thanks to this bull market, lots and lots of people found out about Bitcoin. Media was covering it every day. CNBC was talking about how to buy Bitcoin and encouraging everyone on it. Everyone wanted to own a Bitcoin, which, preferably, he or she had purchased in 2013. During December 2017, it almost felt like Bitcoin is the only thing what interests people. The market was booming, new projects were coming out every two hours, and it felt like – this is it! Bitcoin has gained the needed attention – now we have to start using it.

The problems

Along with massive popularity, came the networks’ usage problems. Bitcoin transaction fees skyrocketed and reached a shocking $37 per transaction in December 21st. That meant that small payments via BTC couldn’t be transacted. Since then the hype around Bitcoin has settled. Small payments now can be made through LightningNetwork – Bitcoins’ off-chain solution for micro-transactions. However now, the transaction fees are as low as $0,01.

The Future

Today Bitcoin is accepted in a total of 13,435 venues across the world. The most active areas being Europe and North America. The multiple payment cards and apps give us the possibility to spend our cryptocurrency as we want. You can buy cars, houses, boats, coffee, pay for rent, mobile services, and mainly use it as money, which it is. Just recently, during the Baltic HoneyBadger Bitcoin conference, The B Foundation was announced, which is an organization through which people will have the opportunity to finance Bitcoin.

Also, Bitcoin soon could enter the traditional equity markets. Intercontinental Exchange (ICE) has launched a company called Bakkt, which will present Bitcoin Futures markets on December 12th, 2018. Also, the SEC (Securities and Exchange Commission) soon will review the multiple Bitcoin ETF (Exchange Traded Fund) applications. These two milestones are rumored to bring huge funds coming into Bitcoin, which could eventually increase the price.

However, are we all in this just for the money? Alternatively, are we in for the technological and financial revolution? How long will it take for Bitcoin to reach mass adoption, and, in general – will it be Bitcoin?

You can read the original .pdf file of the Bitcoin White-Paper HERE.

Source:

https://goo.gl/dNx2Np
https://goo.gl/WsvvCY
https://goo.gl/hAV6Pi
https://bitcoinfees.info
https://coinmap.org

Photo by Canva.com