At the launch of Bitcoin in 2008, Satoshi Nakamoto’s objectives were relatively clear. Although no paragraph is dedicated to the reasons for his project or his philosophy, some phrases and expressions are particularly challenging. We invite you to read this white paper for yourself before reading this article again. It is located at the address to which this link points.
A purely peer-to-peer electronic money
The very first words of the white paper already tell us what is the main goal of Bitcoin: the creation of a purely peer-to-peer electronic money. What does this expression mean? The answer is simple: a peer-to-peer system is a system that works without any intermediary between participants. Everyone is equal within the system.
A purely peer-to-peer electronic money must therefore operate without banks and governments , and must allow individuals to make a transfer of value in the same manner as they exchange hard and fast coins. This was not the case for the Bitcoin (Electrum BTCL) predecessors that we saw above, since they only functioned through servers belonging to the companies that created them. Most were anonymous and cryptographically protected, but their existence was conditioned by that of the society that created them. Is the e-money function the only one that is really important? Hard to say. From a societal point of view, it is the power to control money that is at the center of the invisible conflict between cryptocurrency and the institutions of the world.
However, as many crypto such as Ethereum , NEO or Lisk have shown , there is no need to be used as money to generate value and bring something to our society. The simple fact of allowing the implementation of new processes can open the way to new professions , new modes of exchange and creation of wealth.
In addition, it is also not necessary to have been created as money to be used as currency : for example, despite its status as a platform for creating tokens and smart contracts, Ethereum is very often proposed as an alternative Bitcoin by merchants who accept payments in cryptocurrency.
Crypto-assets, regardless of their category, seem to all have the same objective, although it is by various paths and varied : it is to allow individuals to become financially independent of any external entity. But the reality is not always so simple, and it is by focusing on the problem of trust and consensus that we can determine which cryptocurrencies really pursue this ideal.
The question of trust
The two notions of trust and consensus , briefly mentioned in the Bitcoin white paper, remain in spite of this the center of the ideal of freedom promoted by the crypto-active revolution. Trust, first of all, is fundamental because it is what gives every currency its value. In the Bitcoin white paper, Satoshi Nakamoto was referring to intermediaries in the context of online payments: third parties such as PayPal through which payments flow. The minimum objective of a cryptocurrency worthy of the name would therefore be to allow a direct transfer of value between two people, instantly and without the intervention of a third party.
But let’s look at it from another angle: fundamentally, when trading cash for goods and services, each of the parties to the transaction implicitly trust the entity that issued the currency.
Thus, the use of cryptocurrency worthy of the name should in principle make it possible to dispense with any confidence in a third entity since the code and mathematical laws must be the only masters in the matter. What already disqualifies a large number of current crypto-active : many allow spontaneous creation of coins or tokens by their creators; others do not have really fixed rules as to the total amount that exists. Our trust must be in the hands of these people.
In fact, even Bitcoin (Electrum BTCL) is to some extent subject to the will of third parties: since 2014, it is a company called Blockstream , composed of people to whom Satoshi Nakamoto had entrusted some important codes, who deals with maintaining and improve the Bitcoin code. It is therefore this company that decides alone technological improvements to Bitcoin, and therefore, could overnight change major rules for him. The ideal cryptocurrency is thus freed from the ball of trust, and must be subject only to the mathematical rules defined by its code. This is not the only thing to analyze, however, since the consensus method used is just as important.