What Did Satoshi Do That Was So Great?

It’s a great feeling to understand what problem Satoshi solved.  To understand the spark that led to the implementation of Bitcoin.  That missing link that took so long to figure out. To solve the impossible problem.

Bitcoin's creator, Satoshi Nakomoto, solved the Byzantine General's Problem

In mathematics or network theory there is a question called the Byzantine General’s Problem.  A version of it goes like this:  There are five Byzantine armies that are surrounding a Bulgarian stronghold.  The general at one of the camps want to order all Byzantine armies to attack at the same time.  How can the general get the word out, and know that all armies will follow the same instructions?  How can the armies know the other armies will follow the same instructions?  How can the Byzantines do this with the Bulgarians sending their own messages to the Byzantine armies? If they attack in a coordinated way they will win, but if they are disorganized then each army will meet its own demise.

Satoshi Nakomoto—the anonymous coder or group of coders that created Bitcoin—is credited with solving this problem.  Satoshi’s solution is that any Byzantine general publish their attack time along with the solution of a problem using the attack time that takes some time to solve.  The other armies then encode the attack time and publish a solution of a problem using the encoded time.  Then the armies encode the encoding of the attack time and publish a solution of a problem with the encoding of the encoding.  This forms a chain of encodings each taking some time to establish the next step.  After some time, the Byzantines will attack with at the time that have the longest chain attached.

When the Byzantines attack with this method as long as the Byzantines publish their plans first there is a low chance that the Bulgarians will ever be able to catch up and create a longer chain.  After some time, it’s almost impossible that the Byzantine armies will attack at different times.  Each step in the chain increases the certainty that all Byzantines will attack at the same time.

The first application of this was indeed Bitcoin.  In this application the goal was not to agree on a time to attack, but rather the state of a distributed ledger.   Each block has all the transactions that change the state of the ledger.  As a new block gets published it contains an encoding of the previous block. With each block the transactions before it become more certain to stay on the longest chain.  As time goes by, it’s almost impossible to create a longer chain than the one already ahead of a transaction, and we can be certain of the state of the ledger.

[VIDEO] Decrypting Bitcoin: Blockchain Technology Explained

Two of the co-hosts of Neocash Radio—JJ Epic and Randy Clemens—created this video to explain the benefits of using Bitcoin, as well as to provide an informative overview of how Bitcoin works under the hood to someone who may have never even heard of it.

If you’re new to cryptocurrencies: WELCOME! And if you’re an expert, we hope this intro video will be a valuable tool that you’re inspired to pass along to curious friends and family!

Through our new media studio—5th Quill Studios—we will be producing more in-depth videos to explain Ethereum, DASH, Steemit, and the Federal Reserve soon! (We’ll also be upgrading Neocash Radio to be a video podcast in the coming months!)

Bitcoin is so much more than just an electronic payment system…

Many call cryptocurrencies like Bitcoin “the future of money,” but a majority of people don’t really know much about them. What are cryptocurrencies? How do they work? How do you get them? Where can you use them? And what makes them safer, faster, and often cheaper to use than cash or credit?

We created this helpful video to answer these questions and more, walking you through an in-depth overview of this paradigm shift in money. You’ll see how Bitcoin is already benefitting millions of users across the globe, and you’ll learn how you can be one of them.

Join us as we decrypt Bitcoin, from its enigmatic beginnings in late 2008 to a look at its promising future. We’ll also explore the breakthrough technology underneath Bitcoin—”the blockchain”—and how it can change more than just our relationship with money; it can transform our societies, our governments, our businesses, and possibly our every interaction. Continue reading