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The best, worst and most unknown future

Bitcoin Whitepaper 10 years ago: the best, worst and most unknown future

These days all cryptographic projects have white papers and roadmaps. Most people, however, do not know that the need started with bitcoins.

The Bitcoin whitepaper is the most complete whitepaper in the cryptography industry and considered one of the most authentic and significant documents in the history of computer science. That was the trampoline from which a multi-billion dollar industry was launched.

However revolutionary the paper is, there are some things that have done very well, others that have not worked so well and, finally, those that are so confusing / complex that we do not know how to interpret them.

The things he did great

One of the simplest ways to say how successful an invention is, is to try to remember what life was like before, and not being able to do it. Some good examples of this include computers, e-mails, cell phones and cars.

The success of the Bitcoin whitepaper was so complete that the results became such indelible parts of our lives. This is why it might be a little difficult to clearly distinguish what he did very well. Bitcoin's contribution to the world has radically disrupted the financial landscape and has changed the perception of money in the world.

For starters, he took power from centralized governments who decide how much money to print and how it should be distributed. Bitcoin did this by giving the average citizen, through his ability to extract.

The miners are rewarded for their efforts by the system. The network has seen and enjoyed an incredible success in this sense with many miners who have benefited from it. This is particularly important when one considers that before bitcoin arrived, peer-to-peer networks and nodes in the system were often subject to Sybil and other attacks.

While network owners made attempts to reward people for handling their parts as honest entities, the system never really prospered. Most peer-to-peer systems and networks enjoy considerable success due to technology.

One other thing that did well was helping the network set up more security measures designed to keep the network safe from malicious entities. While bitcoin was designed as a currency, its scripting capabilities helped with the introduction of multisig accounts and secure payment networks. In this way, it was not just a simple payment system, it was so and much more.

Thirdly, Satoshi probably anticipated the possibility of centralization and understood that doing so would leave the network full of risks. Thus, it has created long-term measures and incentives designed to keep participants and miners honest and discourage them from attempting to hijack the network.

He did so by ensuring that the miners invested heavily in the project. In this way, no one would be willing to just waltz, compromise the system, get rich and leave. So, even if there are many of these attempts, no one has ever succeeded.

What the whitepaper and bitcoin have done wrong

The first thing that was wrong was to start the network on a badly protected and profoundly bad signature algorithm. This algorithm, known as ECDSA was / is not as robust as EC-Schnorr.

It is possible that Satoshi used ECDSA because he did not know that EC-Schnorr was a feasible and better alternative. In any case, this was a terrible mistake. If he had known, he would have chosen for EC-Schnorr or even the most advanced BLS signature algorithm.

The ease with which the transactions were / are malleable was also a thorn in the side. This was one of the least weighted mistakes and led to the paralysis of the previously popular exchange. Gox.

Furthermore, the limited divisibility of bitcoin coins is another major flaw. With a single atomic bitcoin unit that is 2 ^ 52 sats, you can easily see how it could fail if it becomes a dominant currency in the world. With this kind of limitation, humans will be limited to less than 1 million units each.

This is not at all close to the amount of money required for daily transactions. This will invariably send us back to the cavemen or take us back at least another 300 years.

The third thing that was wrong was building blocks on a linear chain. This strongly limits its capabilities and makes it a very light client. This makes it rather expensive when trying to check the availability of an old block on a chain.

The best option would have been to put the blocks in "trees", thus making it easier, faster and cheaper to look for old blocks or blocks. Fortunately, it's not all bad since the Certificate Transparency project, created at the same time as the simple blockchain, does it very well.

In this case, the white paper allowed only one vote per node, which is a CPU. There was no vision for the ASIC or GPU miners who are now more popular. Perhaps Satoshi has not foreseen such massive adoption and large-scale commercial extraction that he is currently on the agenda.

What is not known

Bitcoin currently suffers from a block limit of 1 MB. This is one of the reasons for the bitcoin cash hard fork, which has limits greater than 4 MB. The 1 MB block of Bitcoin and the 10-minute interval between creating new blocks has been quite problematic.

It is believed that bitcoins can have larger blocks and increase blocking speed to facilitate faster transactions and volumes.

A second problem is the anonymous nature of bitcoin transactions. Unfortunately, through the use of transaction chart analysis, anonymous transactions are not as anonymous as they used to be. Bitcoin thought that all you needed was simply having the public keys that are not related to your details.

But this has not been completely bulletproof for a while. Right now, cryptographic projects like Zcash and Monero have better anonymity. Can Bitcoin improve this by implementing more cryptographic and privacy-based features? Only time will tell.

The third problem is Bitcoin's prevention of inflation. The reality is that all currencies have to deal with inflation. The insistence of Bitcoin to avoid it can actually lead to deflation. Unfortunately, we will not know it yet because it takes time for this to happen.

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