Core Blockchain Origin

Core, powered by Satoshi Plus consensus, is the result of the dialectical clash of Bitcoin and
Ethereum. Inspired by the principles of both blockchains, Core displays a deep appreciation for
the history of the crypto ecosystem paired with an even greater excitement for Core’s role in its
future. However, before standing on the shoulders of the giants that came before, this post will
look back on the path they have set. That journey all begins with the man to which Core’s
consensus mechanism owes both its name and influence.
Bitcoin:
In 2009, Satoshi Nakamoto carved scarcity out of the stone of abundance. Despite its enablement
of infinite replicability, the internet could now have its own native currency on the blockchain:
Bitcoin. Powered by code and governed by unchangeable laws guaranteed by mathematics,
Bitcoin’s creation represents a step-change in the evolution of money.
Historically, populations looked to physical laws to determine and govern the dominant currency.
These laws or characteristics can be broken down into two camps: store of value characteristics
and medium of exchange characteristics.
Store of value characteristics include hardness, durability, sovereignty, and counterfeit resistance.
* Hardness: Resistance to unpredictable supply increases
* Durability: Resistance to rot, wear, pressure, or deterioration
* Sovereignty: Resistance to confiscation and counterparty risk
* Counterfeit resistance: Resistance to misidentification or forgery
Medium of exchange characteristics include liquidity, fungibility, portability, and divisibility.
* Liquidity: Units can be sold quickly at market price
* Fungibility: Units are mutually indistinguishable and interchangeable
* Portability: Units are easily transported across space
* Divisibility: Units can be easily subdivided or grouped, increasing salability across scales
In order to be a functional form of money, a currency must be effective first as a store of value,
then as a medium of exchange. Therefore, hardness, also called soundness, has historically been
the most important characteristic for initial currency adoption, because the difficulty to produce
an asset defines its scarcity and ability to retain value over time. Historically, the standard
currency across all civilized societies became gold, the asset most difficult to produce while
sufficiently maintaining the other essential monetary qualities.
Although gold was the hardest asset throughout most of history, its utility as a store of value
sacrificed some medium of exchange use-cases. Most notably, gold lacks portability. Carrying gold
around to pay for everyday goods is a practical non-starter. Therefore, banks were needed to
provide portable credit while holding the gold.
Although portability made payments easier, the sacrifice threatened sovereignty and soundness.
The likelihood of confiscation and inflation rose. Over time, these threats became promises.
Leaving the gold standard in favor of fiat currencies destroyed the foundational soundness
principle. Additionally, globalization required the need for more intermediation to transact across
distant spaces. As a result, a permissioned system replaced the self-sovereign system.
Defying the trend towards permissioned access, the internet enabled informational self-
sovereignty. By enabling the infinite replication of data, the internet effectively gave each
individual permissionless information. However, this permissionless information was based on
abundance, which is contrary to the hardness principle of effective currencies. Early payments on
the internet actually increased the need for intermediaries. All online payments needed to be
intermediated by a trusted third party that prevented double-spending. Money could exist on the
internet, but only as a tourist.
With the invention of Bitcoin, the internet could finally have its own native currency. As the first
truly digital monetary asset, Bitcoin returned to first principles by perfecting what gold could only
approximate: absolute scarcity. Only 21 million bitcoins will ever exist, meaning that Bitcoin is the
hardest possible money. It is completely inflation resistant.
At its heart, Bitcoin is the complementary synthesis of gold and the internet itself. In bringing the
best physical characteristics of money to the digital realm, Bitcoin either matches or outperforms
gold’s effectiveness on all fronts.
Portability was gold’s most significant limitation and the reason for its ineffectiveness. Bitcoin,
however, pairs gold’s scarcity with the internet’s portability. It ensures absolute scarcity and
infinite portability. Whereas gold’s portability shortcomings led to permissioned custodians and
the sacrifice of financial self-sovereignty, Bitcoin needs no such tradeoff. With Bitcoin, payments
across any time or space could be permissionless and self-sovereign.
Before Bitcoin, “digital cash” was an oxymoron. Cash payments had to be hand-to-hand, limited
to the physical domain. Bitcoin fulfilled the vision of truly digital cash money by combining four
core technologies:
* Proof of Work: Bitcoin’s consensus mechanism is the most secure and decentralized in
the blockchain world. PoW requires miners to use energy to validate transactions and secure the
network. This energy usage functions as the skin in the game necessary to maintain the ledger’s
truthfulness and the currency’s hardness.
* Distributed peer-to-peer network: Bitcoin’s entire transaction history is preserved by
each network participant (a node) checking each other’s work. This process ensures censorship
resistant peer-to-peer transactions.
* Hashing: Bitcoin’s trustless verification is ensured by irreversible hashing, a method of
computer cryptography that transforms any stream of data into a dataset of fixed size (known as
a hash).
* Digital Signatures: Bitcoin’s self-sovereignty relies on mathematically related elements
called private keys, public keys and signatures. Holding Bitcoin is holding its private key, which
makes its owner self-sovereign.
With the combination of these technologies, a new level of economic freedom is now possible:
trustless, peer-to-peer transactions across any distance and digital medium. In order to maintain
its legitimacy and continue to gain users, Bitcoin needs to continue down money’s evolutionary
path, starting as a store of value.
To ensure the storage of value across time, monetary first principles cannot be forgotten again.
The Bitcoin community needs to prioritize security by focusing on maintaining its hard supply cap
of 21 million bitcoins. Decentralized security is non-negotiable. Nevertheless, blockchain use-
cases are not limited to Bitcoin’s maximally secure and decentralized model.