There are hundreds of online publications that describe what Bitcoin is in great length, but most still miss the mark. The best source for learning is to read the document Dr. Craig S. Wright wrote while using the pseudonym Satoshi Nakomoto.
On October 31st, 2008, he released the whitepaper titled Bitcoin: A Peer to Peer Electronic Cash System. Its purpose is to explain the decentralized electronic payment system based on economics.
The word “Bitcoin” is only used twice in the original whitepaper (in the title and a link to a web domain) and goes on to describe a system for electronic transactions without relying on trust. Governing the system are fixed protocols that utilize an immutable blockchain.
The medium of exchange for the system is a digital coin. In essence, Bitcoin is a triadic term that comprises fixed protocols, a digital coin, and also a decentralized blockchain forming an Electronic Cash System that works as a Peer-to-Peer Exchange.
Why is Bitcoin revolutionary?
While online anarchists will have readers believe that Bitcoin will overthrow fiat currency and more reasonable people believe Bitcoin is a censorship-resistant, anonymous digital currency that is free from seizure, both are incorrect.
Bitcoin is not anonymous; it is private and has an open, immutable ledger. It allows privacy as only the address is public, but this means that activity on the address is examinable to discourage illegal activity. As Dr. Wright said,
Bitcoin needs to work within the law to be valid.
Bitcoin’s real genius is more in its economical design than in any technical innovation. Decentralization happens through the fixed protocol. Bitcoin creates a cash system where participants do not have to rely on an intermediary (such as a bank or payment processor) to facilitate transactions.
The protocols were also designed to prevent the “double-spending” of a coin. Each coin unit is unique and cannot be replicated or destroyed. The system runs on top of a distributed immutable network, maintained by thousands of incentivized miners across the globe.
