Many years ago, Satoshi Nakamoto was an unknown member of a cryptic little group that met up roughly every ten minutes. One day Satoshi surprised the group by telling them he had a white paper. At first, the others weren’t interested because they already had plenty of white paper.
But Satoshi was being cryptographic. He was actually telling them about what was written on his white paper. When he stuck it up on a message board, the others could see that he had invented a new kind of money which, unlike old money, didn’t really exist.
His friends were amazed. They told him they’d believe it when they could see it. But Satoshi said they would only ever be able to see it in a wallet. And that the wallet wouldn’t be a real wallet either. Satoshi’s friends were all very clever so they didn’t mind about that.
Then Satoshi disappeared and was never heard from again. Some people said he’d turned into an old man in California. Others said he’d become a whole group of people who spent too much time on their computers. Nobody really knew. They only knew he probably wasn’t Japanese.
But now we do know. What Satoshi predicted all those years ago came to pass. The new money first appeared in the most unlikely setting—a run-down cow shed in the middle of nowhere. A wise man travelled there every day from a long way off to tend his computers. And then, one day in the depths of winter, he had some great news. He had given birth to Bitcoin.
At first, the new money just sat in the barn because its creator didn’t need to buy anything. He sent some of it to a friend in Florida, but his friend didn’t need anything either so he sent it back.
The wise man returned to the big city and tried to pay his tax bills with the new money but the tax people were old-fashioned and said no. The wise man decided to leave the country but he forgot to switch off his computers in the cow shed and the new money started multiplying of its own accord.
Every day more and more Bitcoins appeared. Some of it escaped from the barn and soon it was spotted on computers all over the world. Luckily someone discovered you could buy pizza with it so finally it was useful.
Because people love pizzas, Bitcoin became incredibly expensive and if you want to buy a pizza with it today, it could cost you about ten million dollars (for an extra-large pepperoni).
Sadly, there are bad people in the world and some of them have also tried to buy hash with Bitcoin. Fortunately, the wise man who created it made that incredibly difficult. You have to solve a ridiculously hard maths problem before you can get any hash and even then only one person at a time can have it. All the hash is joined up into a long chain, so although the bad people think they can’t be seen, they’re actually very easy to spot.
So that’s how, to this day, we have this amazing new money called Bitcoin. If you really want to understand it, just look at the word: it’s “bit” joined to “coin.” Experts have discovered that it’s called that for a good reason: because it’s a “bit” like a “coin.” See? Easy, isn’t it?
In tribute to R. J. Yeatman and W. C. Sellar
See also: Dr. Craig Wright’s presentation at CoinGeek Live, From Internet to Bitcoin: The Digital Ledger to Advance the World’s Technology Infrastructure
New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.