Harry Sudock is Chief Strategy Officer at Griid. In this interview, we discuss what Bitcoin is: specifically, on what ideological foundation was it developed, what problem was it designed to solve, how it solves that problem, and why is it the best technical solution for solving that problem. It’s a tl;dr of the basic technical features underpinning Bitcoin.
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This is the second in a series of special What Bitcoin Did shows aimed at opening people up to Bitcoin. In the first episode, we learnt that Bitcoin is a new form of money. In this episode, we discuss what functions Bitcoin performs, which differentiates it from other forms of money. We then discuss the technical innovations that enable it to achieve these functions. In essence, this show focuses on what Bitcoin is.
Bitcoin is rooted in the cypherpunk movement that developed in the late 1980s centred on the US. As digital technology started to proliferate, its capacity to track and record digital activity became readily apparent. Concerned computer scientists, mathematicians and cryptographers acted to develop systems aimed at protecting individual privacy, despite a concerted government that sought to control the development of privacy-providing technology.
The cypherpunks movement included extensive work by many to develop anonymous digital cash. But, despite some incredible breakthroughs, none of these efforts had any material success. It was not until the pseudonymous Satoshi Nakamoto brought numerous strands of all this work together that a viable anonymous and uncensorable digital currency was born.
The innovation centres on four key pillars: a clear and immutable monetary policy ensuing both scarcity and transparency; a proof of work consensus mechanism that provides decentralised security to the system; a difficulty adjustment, which ensures the issuance rate is highly predictable; and finally, its design considerations aimed at prioritising decentralisation.
To the uninitiated, these four key pillars may seem as merely interesting innovations. But, once comprehended, the effectiveness and elegance of Bitcoin’s design is truly breathtaking. The software has worked, day in and day out, for over 14 years, without being hacked. And, it’s all without a leader, or a clearing house, or a central committee dictating policy. Quick, uncensorable and private global settlement. By open-source code. Satoshi Nakamoto is the genius of our times.