Bitcoin’s unknown creator was inspired by BitTorrent, the legacy file-sharing protocol that was recently acquired by the cryptocurrency and blockchain platform Tron.
Back in November of 2008, the mysterious coder known as Satoshi Nakamoto wrote a series of emails on his plan to create “a new electronic cash system that’s fully peer-to-peer, with no trusted third party.”
Describing how the system could scale, Nakamoto cited BitTorrent as an example of a peer-to-peer network that could give a digital currency monetary value.
He also noted why decentralized networks are essential to avoiding a backlash from political leaders and governments around the world.
“For transferable proof of work tokens to have value, they must have monetary value. To have monetary value, they must be transferred within a very large network – for example a file trading network akin to bittorrent…
Governments are good at cutting off the heads of a centrally controlled networks like Napster, but pure P2P networks like Gnutella and Tor seem to be holding their own.”
Tron founder and CEO Justin Sun recently unveiled how he plans to integrate the Tron protocol into BitTorrent to reward users who share content.
“At this point, there is no incentive for peers who have completed downloading to continue to seed. We intend to extend the rewards to peers who seed torrents, infusing more resources into the current ecosystem…
Hundreds of millions of BT users across the globe will become part of the Tron ecosystem. BitTorrent will be the largest application on the Tron network, which will allow Tron to pass Ethereum on daily transactions and become the most influential public chain in the world.
The integration of BitTorrent and Tron will offer new possibilities to global payment and settlement of the Tron online content. The creators of this content will reach hundreds of millions of global users through this decentralized network without intermediaries.”
[the_ad id="42537"] [the_ad id="42536"]In the introduction to Bitcoin’s highly influential whitepaper, Nakamoto further outlined the need for truly decentralized platforms that cut out the middleman.
“Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments. While the system works well enough for most transactions, it still suffers from the inherent weaknesses of the trust based model. Completely non-reversible transactions are not really possible, since financial institutions cannot avoid mediating disputes. The cost of mediation increases transaction costs, limiting the minimum practical transaction size and cutting off the possibility for small casual transactions, and there is a broader cost in the loss of ability to make non-reversible payments for nonreversible services. With the possibility of reversal, the need for trust spreads. Merchants must be wary of their customers, hassling them for more information than they would otherwise need. A certain percentage of fraud is accepted as unavoidable. These costs and payment uncertainties can be avoided in person by using physical currency, but no mechanism exists to make payments over a communications channel without a trusted party.
What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party. Transactions that are computationally impractical to reverse would protect sellers from fraud, and routine escrow mechanisms could easily be implemented to protect buyers. In this paper, we propose a solution to the double-spending problem using a peer-to-peer distributed timestamp server to generate computational proof of the chronological order of transactions. The system is secure as long as honest nodes collectively control more CPU power than any cooperating group of attacker nodes.”
