This book is for those who are Bitcurious, as in curious about bitcoin.
Introduction
This post is an Introduction to Bitcoin. Bitcoin is the worlds first digital money, built on the world's first cryptographically protected digital ledger. Cryptography is a special type of math, which hides things, in a process called encryption. Encryption is normally used to hide things, like military or government communications.
But bitcoin the cryptocurrency and Bitcoin, the digital ledger, use this technology called encryption to protect the digital ledger from alteration or changes.
This is called immutability or unchangeable.
In contrast to using cryptography and encryption to hide things, the bitcoin cryptocurrency, and the Bitcoin blockchain use cryptogrphy and encryption to display the ledger to anyone who wants to see it, and this is safe because anyone can see it, but no one can change it. So because the Bitcoin ledger is Unmutable or Unchangeable, it can be see by everyone anytime.
This is called Transparency.
The simplest way to explain why this cryptographically protected, immutable and transaparent ledger is special, is to describe it as a new way to record things, which involves the record and the action being one and the same.
The transaction is the record, and the record is the transaction.
Currently, all transactions recorded on a ledger, are recorded after the transaction. This means we trust someone to record it accurately. And if they make a mistake, they can change the ledger afterwards.
When this is ability to change the ledger involves money, there is a person, who records the exchange of money for goods and services. This gives the person doing the recording a lot of power to change the details of the transaction whenever they want, to benefit them, after the transaction.
-For example if I pay you 100 dollars for a car, and the person recording the transaction records that I paid you 50 dollars, then the official record states I still own you 50 dollars, even though I paid you 100. So now I am forced to pay you 50 dollars more because of the power the person controlling the ledger holds in their hands.
This great power seduces people to record transactions in a way which benefits them. So Bitcoin is a new technology which removes this power from human hands, by removing humans from the process of recording transactions.
The next things which is also simple to understand, is that Bitcoin removes the middleman from transactions, invovling the exchange of money for goods and services.
In the modern world you store your money in a bank, and when you want to buy something or pay someone for performing a service, you use a bank check, or a bank debit card, or a bank credit card. In the case of a bank check or debit card, you deposited your money in a bank, and you give someone a message via check or debit card, which promises to pay them for the goods or services. The person then takes that message containing the promise to your bank, where you store your money, and present that message to the bank, and the bank gives them money, in exchange for the message, which was your promise to pay.
This means when ever you pay someone for goods and services with your bank check or bank debit card, they don't get a payment from you, they get a message, which is a promise to pay. They have to trust you, that you will honor your promise to pay, by having enough money in the bank when they go there to exchange your promise for money. This means that in the modern financial system you pay for everything with not money, but a promise to pay money. A promise to pay is called a debt.
This means that in the current system, the payment is not a payment, it is a message, and the message is a promise to pay, also called a debt.***
*The message is a is a debt, and the debt is the message.
But with the Bitcoin digital ledger and bitcoin cryptocurrency you pay for the goods and services with bitcoin. So you don't give them a promise to pay, or a debt. You give them payment, in bitcoin.
So with bitcoin/Bitcoin, the message is the payment, and the payment is the message.
Another thing to know about the Bitcoin network is that there is not one copy of the ledger, but thousands of copies of the ledger. And they all update everytime a transaction is made with bitcoin, on the Bitcoin digital ledger.
This means there is no central office, where someone can break in and force the coputer to change the Bitcoin ledger to benefit one person. There are thousands of copies of the ledger, which all agree with each other. If you managed to get control of one computer with a copy of the ledger and changed the transactions creating a new ledger, that new, changed ledger would be reviewed by all the thousands of copies of the Bitcoin ledger and would be deemed a false ledger. And it would not only be ignored, but the other ledgers would ignore every other new ledgers entry from that computer, until it corrected the false ones.
This is called having a Decentralized Ledger, meaning not only in one place.
This is also called having a Distributed Ledger, meaning copies are not on one computer, but are on many, many computers. Which are not in the same location, but are psread out in many cities and many countries.
Bitcoin is sometimes called a Decentralized, Distributed, Global, cryptographically protected digital ledger. This means copies are on computers all over the world.
Transparency
The other amazing thing is that you can look at the Bitcoin ledger anytime you want and examine all the transactions ever recorded on it, because it is open to everyone to see. This is called transparency.
Trustless
Bitcoin does these things because it is a computer program, carrying out it's functions. It isn't a human who has needs, wants, desires and biases. So Bitcoin is fair, equitable and transparent. It does these things not because it wants to, or because it is the right or wrong thing to do. It does these things because these are the only choices the program has to do.
So you can trust the Bitcoin Digital ledger, because the transaction is the record, and the record is the transaction. The message is the payment, and the payment is the message. The record is immutable or unchangeable. The record is trnsparent or viewable by all. The record is decentralized, and distributed. The record is not recorded by human hands, so it is fair, equitable and transprent. i
The End
So now you know the most important basic principles about Bitcoin. In the next chapter I will explain why these qualities are so much better then our current money transaction ledger or point of sale transactions and elminating trust and trust worthiness as a limiting factor on expanding access to the ability to exchange goods and services locally or across vast distnces, by providing open access to the money transfer infrastructure where all commerce happens.
