What Bitcoin Means

"Don't limit your challenges; challenge your limits"

Bitcoin is digital money. It is money just like euros or dollars, only it’s not owned by a government. You can send it from any point in the world to any other point in the world instantaneously, securely, and for minimal or no fees at all.

Bitcoin is a digital currency that came into existence in 2008 as an invention by a person called Satoshi Nakamoto. He published a paper where he said that he had found the way to create a decentralized network that could achieve consensus, agreement, without any central controlling authority. Now, if you have studied computer science or distributed systems, this is known as the Byzantine Generals’ Problem. It was first described in 1982. Until 2008, it was an unsolved problem. Then, Satoshi Nakamoto said, "I have solved it." He published his paper, and three months later, he published software that allowed people to start building the bitcoin network.

Bitcoin is not a company. It is not an organization. It is a standard or a protocol just like TCP/IP, or the internet. It’s not owned by anyone. It operates by simple mathematical rules that everyone who participates in the network agrees on. Through this simple mechanism, through this invention of Satoshi Nakamoto, bitcoin is able to allow a completely decentralized network of computers to agree on what transactions have occurred on a network, essentially agreeing on who currently has the money.

So, if I send money from my account to somebody else’s account in this peer-to-peer, completely decentralized network, it’s just like sending an email. There’s no one in the middle. Every ten minutes, the entire network agrees on what transactions have happened, without any centralized authority, by a simple election that occurs electronically.

This particular solution, this invention, is far more important than currency. Currency is just the first app - just the first application that you can build on a distributed consensus system. Other applications include distributed fair voting, stock ownership, asset registration, notarization, and many other applications we’ve never thought of before.