By now, you’ve probably heard of Bitcoin. You may even have heard of Ethereum or Dogecoin. If you’re reading this I’m guessing you have an interest in knowing more about Bitcoin and the wider world of cryptocurrency and blockchain technology. My goal is to break down the difficult concepts of crypto into easy-to-understand words and ideas. I also think it’s critical for everyday people, not just “techies” to understand why Bitcoin exists and how it’s changing the world.
The idea for Bitcoin and the blockchain were created at the same time back in 2008. There was an internet forum site dedicated to people who enjoyed learning about and discussing cryptography1. An anonymous person who called themselves Satoshi Nakamoto2 logged onto this forum and made a post describing how they had figured out a way to make a new kind of money. This new kind of money didn’t rely on any government or gold bars to “back” it. Instead it would rely on math (cryptography) in order to do all the things that make money, well, money!
Shorty after posting about the idea for Bitcoin, Satoshi made another post including a white paper3 that outlined how this system could work. This white paper blew everyone’s mind (and still does to this day). The document is 9 pages long, and can be read here. In an upcoming newsletter I’ll break down each component of the white paper and how it applied to the Bitcoin network today.
In the next newsletter, I’ll continue with the timeline of Bitcoin and describe some of the important events along the way. Don’t forget to read the footnotes below as they add some helpful examples and explanations to new terms and concepts.
If anything in this newsletter is unclear, feel free to reply to this email with questions and I'll reply.
1 “Cryptographers” are basically math geniuses that use complex math to create various forms of encryption and ciphers. Cryptography powers a lot of how the internet works, but can also be like a puzzle game for people.
2 Satoshi Nakamoto is not the creator's actual name. To this day we still don’t know who he/she/they are. After several years of working on bitcoin as it grew. Satoshi told everyone on the forum that they were “going away” and then the account just went dead
3 A white paper is a document (not always an actual paper) that scientists have used for many years to describe something that is difficult to understand and has many parts that need a detailed explanation. Something like “How to build a car”. It has many different parts and systems that come together to make a car.
Bitcoin Mining ⚒️ Last week I said that in this weeks newsletter I would talk about mining. What is Bitcoin mining and why do we need it? Since you all know by now that Bitcoin is a completely digital currency the word "miner" is both a misleading and spot on term. Before I get into Bitcoin mining, let's talk about good ol' traditional gold mining for a minute. The main reason fiat currencies1 used to be backed by gold throughout history is because gold is physically hard to take out of the...
In last week's newsletter we left off with an anonymous person calling themselves Satoshi Nakamoto. This person (or people 🤷) had just shared a document called a "white paper" that explained how it could be possible to have peer to peer digital currency that's similar to cash but couldn't be taken away from you by any government. This idea instantly resonated with the small group of cryptographers and Satoshi got to work building a prototype. One of the main concepts to understand about...