QA auto-generated University Article # 31

On January 3, 2009, a pseudonymous genius named Satoshi Nakamoto officially invented Bitcoin. Whoever this mystery person or group is, they managed to create the world's first cryptocurrency that would soon change everything as we know it. Formally defined, Bitcoin (capital ‘B’) is a global, borderless, decentralized protocol that enables the peer-to-peer exchange of the bitcoin currency (lowercase ‘b’), which has a fixed max supply and a known, decreasing issuance rate. It allows us to send money to anyone, anywhere in the world, without the need for an intermediary. Bitcoin doesn’t aim to do anything innovative — rather, it offers an improved alternative to the existing inequitable, inaccessible, and inflationary financial system. By decentralizing finance, bitcoin simplifies a system so complex that it locks out nearly two billion people worldwide and offers an alternative permission-less network that anyone can be a part of.

No one knows who created Bitcoin, there is no company behind it, and there is not a single entity or person in charge of marketing it, yet today at the time of writing this blog, it is worth over 1 trillion dollars! Bitcoin has grown from a small community of computer scientists, Cypherpunks, and cryptographers into an increasingly mainstream phenomenon. Bitcoin is a breakthrough technology because it solved three key issues: Centralization: Bitcoin alleviates the need for a centralized third-party system, like a credit card company or a bank, to confirm and validate transactions. Bitcoin works purely peer-to-peer, eliminating the need for trust in a central entity. Verifiability: Bitcoin is the most accurate currency that has ever been created. For example, fiat currencies could be counterfeit, entered into circulation, and used as a medium of exchange a few times before they are caught (the U.S. Treasury estimates that one in every 10,000 bills is counterfeit.) However, nobody can create fake bitcoin because the Bitcoin network is secured cryptographically via a public blockchain that anybody can access and validate any amount of bitcoin as real. Inflation: Bitcoin's supply is capped at 21 million. There will never be any more bitcoin than that. No one can just "print more bitcoin" like we currently have fiat currency, inflating the money supply. Bitcoin is an invention that, for the first time in history, enabled people to create and manage a digital money supply outside the control of any government or bank. The ramifications and impact of this revolutionary invention on our financial systems are just beginning to be understood by economists and technologists today. More importantly, bitcoin is considered “sound money.” Sound money is defined as money that has a purchasing power determined by markets, independent of governments and political parties, which is essential for individual freedom. More on sound money here