Hello everyone, I am Paul Miyu, a small coder. If you are interested in blockchain technology, you can follow me and learn together. Today I want to talk to you about a funny thing that happened yesterday. It is said that some of the mnemonics of Satoshi Nakamoto’s Genesis wallet were cracked. Today we will take this opportunity to tell you the basic concepts. After listening, you probably know what’s going on.

1. The Origin of Bitcoin

We all know that Bitcoin (BTC) is a decentralized digital currency proposed by a mysterious person with the pseudonym Satoshi Nakamoto in 2008. Its creation is aimed at responding to the shortcomings of the traditional financial system exposed by the global financial crisis. The core concept of Bitcoin is to achieve peer-to-peer transactions through blockchain technology and eliminate dependence on central institutions (such as banks).

In 2008, Satoshi Nakamoto published a white paper (Bitcoin: A Peer-to-Peer Electronic Cash System), which described in detail the design principles of Bitcoin. The white paper mentioned that the traditional financial system relies on intermediaries to verify transactions, and this model is prone to high transaction costs, inefficiency, and threats to user privacy. Bitcoin uses a decentralized network to store all transaction records in a distributed ledger called blockchain. Each block records transactions within a period of time, and all blocks are connected in chronological order to form a chain.

The Bitcoin network was launched on January 3, 2009, and Satoshi Nakamoto mined the first Bitcoin block, the Genesis Block. As the first block, it contained a signature message: "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks", satirizing the bank rescue at the time. The Bitcoin generation mechanism is based on "mining", that is, miners verify transactions by solving complex mathematical problems, and receive Bitcoin as a reward if they succeed. This mechanism is called Proof of Work.

The total number of Bitcoins is designed to be 21 million, and the mining reward is gradually halved over time to ensure its scarcity. Due to its decentralization, transparency and immutability, Bitcoin is called "digital gold". Although it was only used by a few technology geeks in its early days, it gradually attracted global attention, became the beginning of blockchain technology, and led to the booming development of the digital currency field.

2. How to store

In the early days of Bitcoin, users stored private keys in a relatively rudimentary way, mainly relying on manual records and simple software tools. At that time, most users were technical geeks with a certain understanding of security and technology. The main ways to store private keys in the early days were:

1. Manually record the private key

  • The private key is a string generated by random numbers, consisting of a string of 64 hexadecimal characters (256 bits). For example: 5Kb8kLf9zgWQnogidDA76MzPL6TsZZY36hWXMssSzNydYXYB9KF

  • Users will write their private keys directly on paper (i.e. paper wallets) or store them in text files.

While this method is simple and does not rely on any equipment, the private key cannot be recovered if the paper or document is lost, stolen or damaged.

2. Wallet file storage (wallet.dat)

  • Bitcoin Core, the official Bitcoin client, is the main software used by early users. It generates private keys and stores them in the wallet.dat file on the local computer.

  • The wallet.dat file is encrypted (if the user has set a password), but the private key may be lost if the file is not backed up or the hard drive is damaged.

  • Many early users lost their Bitcoins permanently because they did not back up their wallet.dat files in time.

3. Command Line Tools

  • Early Bitcoin users were mainly developers or geeks who would use command line tools to generate and manage private keys, such as generating private keys and exporting public keys through commands.

  • This method relies on the user's proficiency in technology, but is very unfriendly to ordinary users.

4. Offline storage

  • Some users store the generated private key in an offline storage device, such as a USB flash drive, offline computer, etc. This method improves security, but there is a risk of device loss or damage.

So from the above we can see that in the early days of Bitcoin, there was no concept of mnemonic words (BIP-39), so users had to completely save the complex private key string. Losing the private key is equivalent to losing the funds. This complexity made Bitcoin mainly used by the technology circle in the early days. It was not until wallet technology gradually developed that the user experience was significantly improved. Then do you think Satoshi Nakamoto’s wallet had a mnemonic phrase at that time? ?

3. The Generation of Mnemonics

The way Bitcoin users stored their private keys in the early days was simple but risky, especially when they were not encrypted or backed up, and the risk of losing them was very high. This demand has driven the continuous improvement of wallet technology, such as the subsequent mnemonic standard (BIP-39), hardware wallets, etc., which greatly improved the security and convenience of private key management.

The concept of mnemonics originated in the early days of blockchain technology and was proposed to facilitate user management and backup of private keys. The first standardization of the mnemonic system was formally established with the launch of the BIP-39 proposal.

In 2013, Bitcoin Improvement Proposal 39 (BIP-39) was proposed by community members. This proposal defines a standard for encoding private keys into a set of easy-to-remember words, which are called mnemonics or mnemonic codes. BIP-39 was officially released in 2014 and gradually became the universal standard for cryptocurrency wallets.

Features of mnemonics:

  • Humanized: Made up of a set of common words, usually 12 or 24.

  • Security: Generated from random numbers through a standardized algorithm, conflicts can be effectively avoided.

  • Universality: Supports most mainstream blockchain wallets.

So which one do you think came out earlier, Satoshi Nakamoto’s wallet or the mnemonic phrase?