Bitcoin - a primer, or (Who invented bitcoin, and why?)

Bitcoin is so hot right now. The media has hyped it and with that hype new people are hearing about it.

So, Who invented bitcoin, and why?

The answer to that question is pretty easy, no one really knows who invented Bitcoin or why - the motives have never been made public. Having said that, bitcoin is not something that was just hacked together. You can find the seminal Bitcoin whitepaper that outlines the actual ground breaking concept here: https://bitcoin.org/bitcoin.pdf

Now, without getting into the history too much, I'm going to morph that original question a little.

What I really think you're asking is "If we dont know who invented it, or why, why should I (or anyone) trust it?"

Now we're getting somewhere. Lets focus on the technology.
Side note: This is a primer, not an exhaustive list of technology

From a trust perspective the code is open and anyone can read it. Likewise the encryption algorithms, SHA and ECC are well understood and are regarded as highly attack resistant by the global encryption community.

At a conceptual level, the problem bitcoin solves is one of sending a message to someone, and have that message being known to be authentic without having to trust the sender.

This problem is known in the computer science community as the byzantine generals, or two generals problem which was widely thought to be unsolvable.

So I hear you say, "Well, cool, all that academic stuff about maths and stuff is good and all, but what does that really mean?"

The really important take away here is that by combining all that tech and maths, we came up with something we like to call digital scarcity.

<cough>Bullshit, wtf is that?</cough>

What this means, is that, for the 1st time ever in digital history we're able to give a piece of digital information exactly and specifically one time.

This is of ground breaking importance.

To take a quick tangent, Bitcoin introduced the concept of a Blockchain. Its like saying (for sake of argument) Ford inventing the car. Like a Ford is a car (and not all cars are Ford), bitcoin is a blockchain, and not all blockchains are bitcoin.

So, BB (before bitcoin), we could all take any bit of digital information and replicate it as many times as we wanted.

AB (after bitcoin) and using blockchain technology we have a process that without trusting anyone except the technical process (and protocol) we have the ability to disseminate a piece of digital information exactly and specifically one time.

The next question I hear forming is, "Ok, I can agree with that, but what gives bitcoin its value?'

The answer to that is actually really simple (thankfully!), pure market forces. Its as simple as someone saying I'll pay $x for a bitcoin, and someone saying I'll sell it for $y, and the negotiation processes settles for $z. Its really that easy.

The design and implementation of the protocol is genius. No-one on the network has to trust any other participant in the network.

Bitcoin has left the station, and while it's being hyped by media right now, the fundamental technology is sound and has weathered many, many attacks, and has prevailed.

Epilogue

You may come across information with the headline "bitcoin has been hacked".

Up until now, what you've read is misleading. The real meaning behind the headline is "bitcoins have been stolen from someone". This means that a bitcoin exchange has been hacked, or some malware installed on someones phone or computer has stolen bitcoins.

Its important to know that like most things in life, there are no absolutes. Like leaving your wallet at a bar and it being stolen, you leave your bitcoins unsecured and don't follow good practise by securing them yourself (or having someone else do it for you), they may also be stolen.

DISCLAIMER: I am not affiliated with or endorse any bitcoin digital wallet or security products.