#81- The Case for Digital Currency: Nakamoto on Bitcoin
12 years ago, an anonymous person using the pseudonym Satoshi Nakamoto published Bitcoin: A Peer-to-Peer Electronic Cash System. This week, Scott and Karl discuss this revolutionary concept of how Bitcoin set out to change the way the world views currencies.
At just ten pages long, Nakamoto’s original paper is still recommended reading for anyone studying how Bitcoin works. Nakamoto’s vision for the project is this: digital currency that anyone can use without needing to go through a bank or any other centralized organization.
Bitcoin provides a solution to the double-spending problem using a peer-to-peer network. According to Nakamoto, “The network timestamps transactions by hashing them into an ongoing chain of hash-based proof-of-work, forming a record that cannot be changed without redoing the proof-of-work.”
Although the paper spares no technical detail in explaining how the Bitcoin network operates, both Scott and Karl agree— there is elegance and unrealized potential of Nakamoto’s idea. Karl says, “It’s a very clever solution to get at the core of money: it’s non-repeatability, it’s finiteness, but made of digits and not gold, silver, or copper.”
Scott adds, “We can operate this currency using a certain kind of citizenship, a certain way of running referendum, a certain way of self-governing, and none of those ways can be changed by a court ruling or a tyrant.”
Tune in to learn more about the future of cryptocurrency.
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