danonymous on Nostr: What Problems Did Bitcoin Solve? Why is it often hailed as a game-changer in the ...
What Problems Did Bitcoin Solve?
Why is it often hailed as a game-changer in the world of money?
As mentioned in an earlier lesson, a mysterious figure who called himself, Satoshi Nakamoto authored a white paper titled, Bitcoin: A Peer-to-Peer Electronic Cash System.
The paper revealed details of creating “electronic” cash” (digital currency) free of control from any organization or government.
During Satoshi Nakamoto’s research though, he discovered there have been multiple attempts in the past to create a digital currency.
There were early pioneers such as b-money, Bit Gold, ecash, E-gold, Hashcash, Liberty Reserve, and RPOW. But they didn’t work out for two main reasons:
Centralization. These digital currencies were controlled by a central authority which introduced a single point of failure. Having centralized control also created other types of risk. An entity in control could decide to do something shady like create secret amounts of additional money for personal use. Or the system gets hacked and users’ money gets stolen, or the government forces the entity to shut down which means everybody’s money is now worthless.
Double Spending. There wasn’t a foolproof way to know whether the currency was being duplicated or double-spent (the digital version of counterfeiting money).
#bitcoin
#nostr
Why is it often hailed as a game-changer in the world of money?
As mentioned in an earlier lesson, a mysterious figure who called himself, Satoshi Nakamoto authored a white paper titled, Bitcoin: A Peer-to-Peer Electronic Cash System.
The paper revealed details of creating “electronic” cash” (digital currency) free of control from any organization or government.
During Satoshi Nakamoto’s research though, he discovered there have been multiple attempts in the past to create a digital currency.
There were early pioneers such as b-money, Bit Gold, ecash, E-gold, Hashcash, Liberty Reserve, and RPOW. But they didn’t work out for two main reasons:
Centralization. These digital currencies were controlled by a central authority which introduced a single point of failure. Having centralized control also created other types of risk. An entity in control could decide to do something shady like create secret amounts of additional money for personal use. Or the system gets hacked and users’ money gets stolen, or the government forces the entity to shut down which means everybody’s money is now worthless.
Double Spending. There wasn’t a foolproof way to know whether the currency was being duplicated or double-spent (the digital version of counterfeiting money).
#bitcoin
#nostr