The Innovations Bitcoin: Appears As the World Faces Crisis

Two policemen and a journalist came to the man at his residence. The look on his face looked like a sleep-deprived person. Appearance with a dull t-shirt, old jeans, and white socks without shoes, adds to the mystery of the man.

The police asked reporters. "So what do you want to ask?"

Before the reporter replied, another policeman replied: "maybe he would think he would have trouble talking to you."

"I do not think it's a problem [...] I want to ask him about Bitcoin. The man we met is Satoshi Nakamoto, "said the reporter.

Leah McGrath Goodman, the reporter who, along with two policemen, came to Nakamoto, eventually becoming a little bit disappointed. The man they went to was not Nakamoto the creator of Bitcoin. He is just a 64-year-old man of Japanese descent who happens to have the same name. It is not known who Nakamoto is.

Bitcoin is a popular term and many people talk about it and discuss it in recent years. Based on a paper titled "Bitcoin: A Peer-to-Peer Electronic Cash System" written by Satoshi Nakamoto, it is a peer-to-peer version of electronic money that allows online payments to be made directly from one party to another without going through financial institutions.

Technically, Bitcoin utilizes a technology called Blockchain. Blockchain decentralizes the database to all the networks it's associated with. The data propagated, has been encrypted first. When new data is added, all computers involved in the network are required to verify data.

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Bitcoin, like gold, is obtained in two ways: buying or mining. However, keep in mind, Bitcoin has a limit on the number. The system will only have 21 million Bitcoin in circulation.

In a clarification uploaded by Newsweek, the media that published Goodman's work on the Bitcoin creator's investigation, they said it was important for Newsweek to reveal who the figure behind Bitcoin was. This is because the cryptocurrency is already popular in the community. People who invest in Bitcoin should know the origins of crypto money.

Satoshi Nakamoto, the creator of Bitcoin that Goodman is trying to trace, is estimated to have 980,000 Bitcoin. At current exchange rates, the holdings are worth $ 6.65 billion. Referring to CNBC publication, the number of Bitcoin holdings by Nakamoto is equivalent to nearly 5 percent of Bitcoin's total of 21 million Bitcoins.

The percentage is similar to US-owned gold holdings. Uncle Sam's country has about 8 thousand tons of gold. It's worth 4.3 percent of the world's total gold.

Nakamoto is considered to have a wealth of Bitcoin like the US has gold, affecting the life and death of Bitcoin world. It becomes a justification to reveal who Nakamoto really is. Beating the privacy aspect that people often echo.

Why would anyone or anyone else or Nakamoto create Bitcoin?

In whitepapers released almost a year before Nakamoto released Bitcoin, the reason why Bitcoin is present is the dominance of conventional financial institutions, along with third-party companies, for online transactions. The mediating financial institution is considered Nakamoto increasing transaction costs. The existence of such mediator ultimately limits the minimum value transactions to be performed.

However, there is one more reason that may very well be why Bitcoin was born into the world. The reason is none other than the presence of global economic crisis that had occurred in 2008.

Bitcoin's idea, in his article entitled "Bitcoin: A Peer-to-Peer Electronic Cash System", was born in November 2008, aka in the midst of a global economic crisis. Meanwhile, in the real form, Bitcoin slid into cyberspace right on January 9, 2009. It was the year of the end of the gloomy global economic crisis that lasted between 2007 and 2008. Directorate of Economic Research and Monetary Policy of Bank Indonesia in its publication entitled "Indonesia Economic Outlook 2009-2014: The Global Financial Crisis and Its Impact on Indonesia's Economy "mentioned that the global economic crisis began on August 9, 2007.

BNP Paribas, a bank headquartered in France, expressed its inability to dilute US subprime mortgage securities. The subprime mortgage is a term for housing loans given to people who have poor credit record or have never had credit. This credit is considered risky. There is very much a drained fund for this credit. In 2002, the subprime mortgage channel in the US reached $ 200 billion, then increased to $ 500 billion in 2005.

The stalled credits in the US are beginning to be a global financial crisis, especially for countries with trade links with the United States. In 2008, on the occurrence of the crisis, there was a decline in economic growth, from 2.7 percent in 2007 to 1 percent. In fact, still referring to the publication of Bank Indonesia, the IMF projected growth at 1.3 percent.

Specifically, the global economic crisis also caused a slowdown in trade growth. In the previous five years, world trade growth averaged 8.1 percent. However, the figure dropped to 4.1 percent in 2008.

The economic crisis also caused the decline in prices of various commodities, not to mention oil. In July 2008 the price of oil per barrel was pegged at $ 147 per barrel, then decreased to $ 47 per barrel in December 2008.

Economic difficulties make the world economy sluggish. The Federal Reserve, the US central bank, even had to lower its lending rate to a level of 0.25 percent by the end of 2008 in order for the public to re-take credit.

Another consequence of the global economic crisis is the weakening of the dollar against other currencies. In Q2 / 2008, the dollar exchange rate reached Rp9,193. The dollar subsequently weakened to Rp8,007 in Q3 / 2008. The weakening of the dollar is one of the reasons is the loss of public confidence in the dollar, or over the conventional financial system as a whole.

This condition creates crypto money like Bitcoin. People want other currencies as alternatives. Jason Leibowitz, a digital moneylender who is also a Wall Street professional who works on blockchain at Credit Suisse, once wrote about Bitcoin published by Coindesk, said Bitcoin's birth was a response to concerns that the bank was "too big to fail." Banks that fail, will be the cause of the systemic economic collapse. Then Bitcoin was born in answer to the question: "where can someone save treasure if the financial system fails?"

The trust that money users must make in conventional financial institutions is also a big issue. This is what the birth of Bitcoin wants to answer, especially in the context of electronic transactions. Bitcoin was born without creating a financial system that relied on trust but on evidence. The meaning is cryptographic evidence, evidence that is difficult to be tampered with by a person who has no rights.

Nakamoto, in his writing, considered that this dominance, although running well, still has weaknesses because the model that has been used based on the model of trust.

"What is needed is an electronic payment system based on cryptographic evidence, not trust," Nakamoto said.

Birth of Bitcoin "allows two parties to transact directly with each other without the need for a trusted third party," he said.

In the article by Maria Bustillos published by The New Yorker, mentioned that Nakamoto was really motivated to create Bitcoin due to the fall of the world economy. When Bitcoin first slid, the first fifty Bitcoins (or genesis block) contained a text from The January 3rd edition of The Times article that proclaimed the possibility of a bailout in crisis-affected banks.

By the Masters, Chief Executive Officer of Digital Asset Holdings, a digital asset investment firm, said that Bitcoin was indeed the answer to the economic crisis that hit the world at that time.

"Yes, this is an activist response (on economic conditions).The world will be more efficient if people can directly conduct individual transactions right now.When you transfer value, usually in the form of money, you need a centralized and accountable trustworthy institution. at this institution is proved by their beliefs that it does not help launder money, terrorism, and you know where to go if the problem is plagued.This belief is not in Bitcoin, but it is the inspiration of a crypto technology, "he said in an interview with The Wall Street Journal.

The journal, entitled "The Practical Materiality of Bitcoin" written by B. Maurer of the University of California Irvine reveals that Bitcoin is the currency that combines materialism with community politics, which is a response to conditions conventional finance.

That is, Bitcoin wants to divert the trust value of financial transactions that have been focused on conventional financial institutions on community roles. The role of the community is the fact that Bitcoin, as a software, is distributed with the concept of open source (Bitcoin code can be downloaded via Github). Everyone, who understands coding, can help improve, improve, and keep Bitcoin.

"In order for Bitcoin to work, people do not have to trust Nakamoto, the bank, or any other person or institution, we just have to trust the code or cryptographic algorithms," Maurer said in the journal.

More simply, Maurer mentions that Bitcoin is not working as a currency, but as "solidity, materiality, stability, anonymity, and, community."

"The world will be more efficient if people can directly conduct individual transactions individually"