By Xiangqiong Liu
Blockchain started with the creation of Bitcoin, which is a “purely peer-to-peer version of electronic cash” was created by Satoshi Nakamoto in 2008.
Satoshi’s Bitcoin is the opening act of blockchain technology to create a means for trustless digital storage and transmission of value.
Martti Malmi is the first developer of Bitcoin, a decentralized cryptocurrency that is traded like money. He created Bitcoin when he was a sophomore at the Helsinki University of Technology in the spring of 2009. At the CHAINDD Conference in Beijing, China. Malmi recently spoke about the origins of Bitcoin and its importance for the future.
What does Martti Malmi, co-founder of Bitcoin, say about this first decentralized cryptocurrency?
Martti Malmi, the first developer of Bitcoin after Satoshi Nakamoto and the founder of the Bitcointalk.org forums. Malmi found Bitcoin when he was a sophomore at the Helsinki University of Technology in the spring of 2009.
Malmi has already proved that Bitcoin has the same value as the real currencies. In 2013, he started working on the identity and reputation project identi.fi., which is a decentralized address book online reputation application.
He is currently a co-founder at the startup MONI, and he is focusing on advancing Identi.fi., and distributing payment networks for Stellar, which is a similar cryptocurrency like Bitcoin, Ethereum.
The Story about Bitcoin Pizza Day:
Malmi talked about a famous story about Bitcoin. Someone bought two pizzas in 2010 with 10,000 bitcoins, which would be worth $100 million today.
Are Bitcoin and blockchain the same thing?
Many people usually misunderstand that “Bitcoin” means blockchain, since they are closely related and Bitcoin was the first application of blockchain.
“When Bitcoin was released as open source code, blockchain was wrapped up together with it in the same solution.” (Lucas, 2018)
“Bitcoin is a type of unregulated digital currency that was first created by Satoshi Nakamoto in 2008. Also known as a “cryptocurrency,” it was launched with the intention to bypass government currency controls and simplify online transactions by getting rid of third-party payment processing intermediaries.” (Lucas, 2018)
“Bitcoin transactions are stored and transferred using a distributed ledger on a peer-to-peer network that is open, public and anonymous. Blockchain is the underpinning technology that maintains the Bitcoin transaction ledger.” (Lucas, 2018)
Bitcoin has been called “digital gold” but what is it? Here is how Malmi explains it: “You could compare blockchain to magical paper, so even though I can have the business of this magic paper, we can both add records onto it, but neither of us can remove it,” he said.
“With this magical paper, we can make a distributed ledger. So we can record transactions all over the world. Nobody can deny that it’s happened,” Martti said. “So we can achieve consensus in distributed systems without a trusted third party.”
Malmi explained that the difference between a blockchain and a database is that a bank or other centralized parties that maintain these records, so we have to ask them for permission to make transactions, or if we want to verify a transaction, we need to go to a bank to do it. However, with blockchain technology, we do not need this mode to make this permanent, verifiable records or transactions.
The popularity of blockchain
Bitcoin and the vast array of cryptocurrencies have become extremely popular these days, and many people become addicted to them. Why has blockchain become so popular?
The incentive mechanism of these tokens motivates and attracts more and more people to invest in Bitcoin. “I think it’s the incentive mechanism of these token markets, and the networks effects that incentivize people to promote them and get more users to their currencies,” Malmi said.
What is more, most investors can make money with Bitcoin and benefit from it, so more and more people get addicted to Bitcoin. “Maybe you can see some of the same phenomena, as in all the level of marketing on these sketchy private practices,” Malmi said.
Bitcoin has grabbed the attention of lots of investors, at the same time, many people concerns about that is blockchain a safe investment? Or is it just a bubble? Malmi, co-founder of Bitcoin, has no doubts about its value.
“Personally, I think perhaps bitcoin is the most secure crypto assets because it is fairly high decentralized with the large user base and creates large network effects all over the world,” Malmi said. He thinks all of the features of bitcoin lead its users to consider it to be a valuable and secure asset.
However, Malmi said bitcoin is the most secure crypto assets; it seems like he doesn’t think Bitcoin is the safest investment. Due to bitcoin is in a very early stage of development and investing in it is similar to the stock markets, there are inherent risks associated with investing in cryptocurrency.
“If I manage my grandmother’s savings, I won’t put more than maybe 5 or 10 percent of all in bitcoin,” Malmi said. “I would put most of it into some very safe assets.”
“Because Bitcoin is a new technology and it has huge potential,” Malmi said. “Many people have followed this strategy in the past years.”
Malmi share a strategy that is used for investing in blockchain (Audio)
What is ICO?
From Bitcoin magazine, it defines the ICO, An Initial Coin Offering, is a fundraising mechanism in which new projects sell their underlying crypto tokens in exchange for bitcoin and ether. It’s somewhat similar to an Initial Public Offering (IPO) in which investors purchase shares of a company.
Suggestion for the new blockchain investors.
Malmi has some suggestion for the new blockchain investors. “Be honest and transparent.” Malmi suggested the new investors that “if you are doing an ICO(Initial Coin Offering), then you should make sure that investor interests are aligned with your interests.”
Malmi also thought that if the investors are going to contribute to that project for long-term value, then they should be honest and do work on actually meaningful things, not just most trendy, convenient and easiest ways to get funds.
What are the biggest concerns for investing blockchain？
Malmi also talked about the biggest concerns for investing blockchain both for venture capitalists and small investors.
“Finding all the good projects, and separating them from a majority of impact ICO projects. I guess you can make profits in investing in or long-term solutions.” Malmi said. “Not just for the government, or just trusting my point, or keeping trusting someone else to buy those assets before the value collapses.”
Malmi also suggests that investors should take a long-term view of Bitcoin investments, he said. “It’s a big project actually, and contributes to the real value in the real world.”
What does blockchain has transparency mean? (Audio)
Q: What is the difference between investing in blockchain and the stock?
A: “Tokens are like stocks, but they have no label responsibility used to entitle token illegally” Malmi said. “It’s unlike public company’s shares, which are heavily regulated public companies.”
“So if it’s ICOs, you need to convince investors that you are doing the right thing,” Malmi said. “If you want a long-term success to yourself that is what you should be doing to be open, transparent and responsible.”
Q: Do you think Investing in Bitcoin just like gambling?
A: “ It’s a form of gambling, in my opinion. I would rather just hold the points that tried to beat the market.” Malmi said. “I guess the vast majority of the traders make profits unless when trade is going down. They make a profit when trade is off.”
Q: How can we apply blockchain in our daily life? eg: education? (Audio)
Q: Can we apply blockchain into security?
A: “Blockchain has been used for a great many things. I haven’t seen great applications for security actually.” Malmi said. “Blockchain can be used for authentication and authorization purposes, for example, a computer with user rights, or console with blockchain.”