Crypto Decrypted

2Bitcoin, the First Application of a Blockchain

We won't overlabor Bitcoin as there are plenty of books that dive deep into this origin story. Because Bitcoin is Bitcoin, however, we have to start here. Bitcoin was the first crypto superstar, created in response to the chaos of the 2008 financial crisis. During this time lenders failed consumers in a public way, feeding a growing distrust of big banking. Banks received far more than just bailouts. Profits were allowed to stay private while losses were socialized—the public, instead of the banks, shouldered the burden. Bitcoin, by far the most well‐known and trusted token, was born out of destruction.

Bitcoin's pseudonymous creator, Satoshi Nakamoto, responded by creating an alternative digital currency that did not rely on too‐big‐to‐fail central banks and other murky authorities such as the Securities Investor Protection Corporation (founded and funded by brokers to more or less insure investors who lose money at financially troubled member firms). Nakamoto's whitepaper influenced developers and investors worldwide. He proposed a peer‐to‐peer (P2P) payment system that did not require third‐party confirmation. Banks, governments, and other central authorities aren't required to settle every transaction, noting that “what is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party.” Given ...