the relentless resilience of peer-to-peer electronic cash « Kraken Blog


In 2008, an 8-page white paper outlined a new form of money. Today, we celebrate the 15th anniversary of Bitcoin.

On October 31, 2008, an anonymous entity named Satoshi Nakamoto published a white paper for a decentralized, “peer-to-peer electronic cash system.”

The Bitcoin white paper was a direct response to the systemic weaknesses laid bare in the 2008 financial crisis. With its fixed supply and decentralized nature, it proposed a radical alternative to the world’s government-issued money systems.


One million drachma, Greece, 1944

The problem: politicization of money

Government-issued money derives its value from the trust its holders have in the institutions that issue and manage it, like the central banks. 

These institutions benefit from having a good reputation for governance. But levels of trust citizens have in them vary over time, and when trust is the main value determinant of a currency, anything challenging that trust will tend to negatively impact that currency’s value. 

Five hundred million dinars, Croatia, 1993

One of the most notable examples in recent years is the Turkish lira, which has collapsed against other global currencies. Largely due to persistent inflation and the nonsensical policy idea that keeping interest rates near zero (encouraging aggressive borrowing and spending) will result in lower prices, a lack of confidence in the Turkish government’s fiscal management ability has only accelerated the lira’s devaluation. 

21 million and not counting

The risks of a monetary system based on trust are exponentially increased because governments can print money at will. There are no longer any governments or central banks that issue asset-backed currency. This makes it all too easy for officials to print money in an attempt to alleviate any manner of national crisis. 

10 quintillion pengő, Hungary, 1946

But the problem is that unlimited money printing leads to an ever-larger pool of currency chasing a finite pool of goods. This invariably leads to people having to pay more for those same goods. 

10 million zaïres, Zaire, 1992

Nothing new to see here

Currency failures are far from a new phenomenon; history is littered with government-issued currencies that were printed until they lost all of their value. For centuries, around the world, money printing has been the de facto governmental solution in times of war, financial stress or social upheaval. And as the value of a country’s currency is perpetually diluted by more of it entering the marketplace, trust in it is further eroded. 

50 billion dinars, Yugoslavia, 1993

In the early twentieth century, Germany’s gold-backed currency – the mark – was one of the strongest in the world. After the outbreak of World War 1, the government dropped the gold standard and introduced a new currency, the papiermarkto finance its war effort. The papiermark promptly lost value, a process that accelerated after Germany’s defeat in 1918. 

German officials did what governments always do as their last resort: print more money, faster. This led to one of the most dramatic instances of hyperinflation in history. By 1923, one pre-war mark was worth one trillion papiermarks.

Two trillion marks, Germany, 1923

This underscores an important truth: trust is a shaky foundation for a monetary system. Trust can last a long time, but government currencies are systemically vulnerable when nothing else backs them. While mass printing of more currency often stops an immediate crisis from turning into a near-term catastrophic collapse, it also reminds a country’s citizens that their government is creating money out of thin air.

One million pesos, Argentina, 1992

But you have a choice: Bitcoin

Bitcoin was designed specifically to address these risks. A system built on a fixed supply and a transparent, immutable ledger, Bitcoin is structurally engineered so its holders don’t end up with a currency that can be printed into inflationary oblivion for political reasons.

Bitcoin’s supply is algorithmically capped at 21 million coins. This built-in scarcity preserves its purchasing power. This is the same reason gold has maintained value for thousands of years: its supply is relatively fixed and its primary value determinant is demand. Created billions of years ago in cosmic nuclear explosions, mankind can’t just print more of it.

One million intis, Peru, 1990

Bitcoin has no central authority. It is protected from the whims of government bodies, individual leaders and financial institutions. The rules governing Bitcoin are public and apply equally to everyone, regardless of where they live, what they look like or who they know. Everyone gets the same deal: reliable money. 

We are all witnessing the future of finance

Bitcoin is a beacon of operational stability, a monetary system for the digital age, custom-built as a lesson learned from centuries of failures. Bitcoin has provided a reliable, disintermediated and decentralized means of exchange and store of value since the Genesis Block

Two million zlotys, Poland, 1992

Automatic for the people: Bitcoin just works

Over the past 15 years, Bitcoin has been declared dead 474 times. Yet it continues to work, executing its code unemotionally, while some people villainize and rail angrily against it. And day by day, more of the world’s citizens realize that no amount of doubt or name-calling changes the simple fact that Bitcoin just works.

One hundred trillion dollars, Zimbabwe, 2008

So as we celebrate the 15th anniversary of the Bitcoin white paper, we herald this new era of monetary sovereignty where individuals can take control of their wealth. At Kraken, we are proud to help accelerate its global adoption so that everyone can achieve financial freedom and inclusion.

Source for currency images: The Hyperinflation Gallery

These materials are for general information purposes only and are not investment advice or a recommendation or solicitation to buy, sell, stake or hold any cryptoasset or to engage in any specific trading strategy. Kraken will not undertake efforts to increase the value of any cryptoasset that you buy. Crypto products and markets are unregulated, and you may not be protected by government compensation and/or regulatory protection schemes. The unpredictable nature of the cryptoasset markets can lead to loss of funds. Tax may be payable on any return and/or on any increase in the value of your cryptoassets and you should seek independent advice on your taxation position. Geographic restrictions may apply.



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