QUESTION: Who designed bitcoin? How was it started?

00:02 Who designed Bitcoin and how was it 00:05 started? Well, in a separate video, I 00:07 talk specifically about Satoshi Nakamoto 00:09 and I will try to remember that to post 00:11 that comment uh the link to the YouTube 00:13 video of that in the comments. If I 00:15 forget, someone please do it for me. Um 00:17 anyway, so I'm not going to talk so much 00:19 about Satoshi Nakamoto, the uh founder 00:22 of Bitcoin, the creator, not founder 00:24 because it's not a company. Um the 00:26 creator, I won't talk so much about him 00:29 in this video. I'll talk more about the 00:30 launch process and you can watch my 00:32 video about Satoshi Nakamoto 00:34 specifically if you want more details 00:36 about the creator himself. Okay, so uh 00:39 the idea for Bitcoin started back in the 00:43 1970s. The idea for a digital currency, 00:46 lots of different people tried it lots 00:47 of different ways. None of them could 00:49 get it to work because they were all 00:50 relying on some sort of central 00:52 authority. and that central authority 00:54 would end up getting corrupted somehow 00:56 or the government would shut it down for 00:58 being an unlicensed money transmitter or 01:00 just you know one series of bad things 01:02 after the other. So, but all of the 01:04 ideas were slowly falling into place, 01:07 slowly falling into place. All the ideas 01:09 were there. They just had never been 01:11 combined in a way that would actually 01:13 work in the real world. And so, Satoshi 01:15 Nakamoto, the inventor of Bitcoin, 01:17 started working on it in the middle of 01:20 2007. And we know this because in 01:22 January of 2009, he said he had been 01:25 working on it for 18 months. So the 01:27 middle of ' 07 plus all of '08, he 01:29 launched it on January 3rd of 2009. So 01:32 uh so he initially wrote the white 01:34 paper. The white paper is a 9-page 01:37 document that describes Bitcoin that 01:39 went live on October 31st of 2008. So he 01:42 started working on it in the middle of 01:43 2007. by by October of 2008, he had 01:47 written the white paper that described 01:48 how it was going to work and he released 01:50 that on October 31st of 2008 and then it 01:54 took him until January 3rd of 2009 to 01:58 finish writing the first version of the 01:60 software code for how it would work. So 02:03 it took 18 months to design, but again 02:04 he was incorporating ideas that were 02:07 literally 40 years in the making. 40 02:10 years. And his big ideas that he added 02:13 that nobody else had thought of before 02:15 was the difficulty adjustment, which I 02:18 will not go into how that works. Um, but 02:20 I can do that in a separate video, but 02:22 I'm not going to do that on this one. 02:22 The difficulty adjustment. Uh, and the 02:25 concept of a blockchain. Uh, so and the 02:29 ability because of the difficulty 02:31 adjustment and because of the fact that 02:33 it was a blockchain to make it 02:35 decentralized, meaning with no one in 02:37 control. And you have to have a 02:38 blockchain. the concept of a blockchain 02:40 and difficulty adjustment and those 02:42 sorts of things are things you have to 02:44 have in order for uh the concept of a 02:47 blockchain to work. Okay, so those 02:50 things were sort of the secret sauce 02:52 that Satoshi added specifically the 02:54 blockchain to the technologies that had 02:56 already been invented between probably 02:59 1969 and 2009. Let's call it about 40 03:02 years. Um, okay. So, he has the white 03:06 paper, he finishes the software, and 03:08 when he launches the software on January 03:10 3rd of 2009, he wanted to communicate to 03:12 the world why he was launching it and 03:15 that it was a completely fair launch and 03:18 that he had not been secretly creating 03:20 bitcoins in the background without 03:22 anyone's knowledge or anything like 03:23 that. So 03:26 the way he did that was he launched the 03:29 blockchain on January 3rd of 2009 and he 03:31 embedded in the very first block two 03:35 messages. Well, a single message, but it 03:37 was intended to communicate two things. 03:39 Um, it said in the in the Genesis block, 03:42 it's called the Genesis block. It's the 03:44 very first block of the blockchain. That 03:46 blockchain now has more than 900,000 03:49 blocks that have happened because 03:51 there's been more than 900,000 10-minute 03:54 intervals. And the Bitcoin blockchain 03:55 adds a new block to the blockchain every 03:57 10 minutes. So, there's been more than 03:59 900,000 blocks added since January 3rd 04:02 of 2009. So, in that very first block, 04:04 he wanted to communicate that he had not 04:06 mined that block earlier than January 04:09 3rd of 2009. So he did that by embedding 04:12 in the block the message Times of London 04:17 January 3rd 2009 Chancellor on the brink 04:20 of the second bailouts of the banks. So 04:24 he did he communicated two things by 04:26 that message. one that he obviously he 04:29 could not have mined the first block 04:31 prior to January 3rd of 2009 because 04:33 that was the heading of the Times of 04:35 London newspaper on January 3rd of 2009 04:38 which is a very in cryptography it's a 04:40 very common way of anchoring things to 04:42 the external world is to imprint 04:44 something that would not have been 04:46 knowable before that date so by saying 04:48 times of London you know January 3rd 04:51 2009 chancellor on brink of second 04:53 bailouts of the banks he was taking the 04:55 headline line of the Times of London 04:57 from January 3rd of 2009. Meaning he 04:60 could not have possibly created Bitcoin 05:02 that first block prior to January 3rd of 05:04 2009 because nobody knew what the 05:07 headline of the Times of London was 05:09 going to be on January 3rd of 2009. I'm 05:12 passing a wreck here that would not have 05:14 happened if one or both of the parties 05:17 had been driving Teslas. Uh somebody 05:19 clearly rearended another person and 05:21 Teslas never do that which is amazing. 05:24 Um, but anyway, it's all torn up and 05:26 both of their vehicles are all torn up 05:27 and police cars there and Teslas just 05:30 don't do that, which is which is amazing 05:32 and I love it. Um, but I am sad for them 05:34 because their Toyota and their Chevrolet 05:37 are in a really bad shape. Okay. Um, so 05:41 uh January 1st, 2009, uh, that was the 05:44 headline. Obviously, the Times of London 05:47 decided to make that the headline of 05:49 their newspaper either the night before 05:51 or the morning of so that the block 05:52 could not have been mined any earlier 05:54 than that. So, uh, the this Bitcoin 05:57 blockchain was launched on January 3rd 05:59 of 2009. And it was important that that 06:01 block had not been mined earlier because 06:03 it was a fair launch unlike virtually 06:06 every other cryptocurrency in the world. 06:07 There's millions of them at this point. 06:09 They're all worthless or almost all 06:10 worthless and nobody knows which ones 06:12 aren't worthless. um other than Bitcoin. 06:16 Um so the uh the the by by having a fair 06:20 launch, Satoshi was communicating that 06:22 hey, I'm releasing the software to the 06:24 world. Anyone can use the software. The 06:27 the Genesis block that kicks off the 06:29 blockchain has a message in it that says 06:32 it was not created prior to January 3rd 06:34 of 2009. And so everybody gets a fair 06:36 launch. Everybody can run their 06:38 computers to mine this new Bitcoin. And 06:40 in the early days, there was no Bitcoin. 06:42 Which means the only way you could get 06:43 Bitcoin is to turn on your computer, run 06:46 the Bitcoin software, and every 10 06:48 minutes, if your computer worked harder 06:50 than the other computers, then you would 06:52 get 50 Bitcoin. And it was 50 Bitcoin 06:54 for the first four years, then it was 25 06:56 Bitcoin for the next four years, then it 06:58 was 6.5 Bitcoin or sorry, 12 Bitcoin for 07:01 the next four years, then it was 6.25 07:04 Bitcoin for the next four years. And 07:06 since we're more than 16 years into the 07:07 life of Bitcoin at this point now, 07:09 someone who mines a Bitcoin gets 3.125 07:12 Bitcoin. Now, there's no point in you or 07:15 I trying to mine Bitcoin at this point. 07:17 You basically have to have uh an entire 07:19 massive army, literally server farms of 07:23 specialized computers that do nothing 07:24 but Bitcoin. There's no there's no way 07:26 for an average person to mine a Bitcoin. 07:28 Not going to happen. Don't even try. Not 07:30 worth it, etc., etc. Uh but back then 07:33 you could. And that way that back then 07:34 that was the only way to get Bitcoin 07:35 because there was no marketplace for 07:37 Bitcoin. So to Satoshi Nakamoto wanted 07:39 to communicate that one he had not 07:41 secretly launched the network early. Two 07:43 it was a completely free and fair launch 07:45 because everybody including him could 07:48 just run the software starting at the 07:50 same time and all then have equal 07:52 chances of mining Bitcoin blocks so that 07:54 the Bitcoin would be fairly distributed. 07:56 um that is different than Ethereum or 07:58 Salana or XRP which all started by the 08:02 founders giving themselves a huge amount 08:04 of the tokens for free and then forcing 08:06 everyone else to pay for the tokens. So 08:10 virtually every other cryptocurrency uh 08:12 started unfairly. They started with 08:15 whoever got there first doing something 08:16 called a premine. The premine is where 08:19 they made up a bunch of the tokens out 08:21 of thin air first and then they forced 08:24 everybody to compete to get the rest of 08:25 them and then as the price of the token 08:27 increases, the founders dumped their 08:29 tokens on the marketplace which cost 08:31 them nothing. And Satoshi Nakamoto 08:33 wanted to be very clear that that is not 08:35 what he was doing. He was launching this 08:37 free and fair uh for the world and that 08:40 he had no intention of trying to frontr 08:42 run it or give himself free tokens or 08:45 anything like that. Um, so that is how 08:48 the network was launched. It was founded 08:50 by Satoshi Nakamoto. Uh, I'll give you a 08:52 few quick facts about him. 08:55 First, it's not his real name. Nobody 08:57 knows who Satoshi Nakamoto is. It's 08:58 definitely a pseudonym. Nobody knows 09:00 where he lives. People suspect based on 09:03 the time zones of when he posted online 09:05 that he was from the United States. Uh, 09:08 he claimed to be from Japan because he 09:10 picked the ter the name Satoshi 09:11 Nakamoto, but nobody thinks he was from 09:13 Japan. He alternated between English um 09:16 English spelling and American spelling 09:19 of the English language. So he would use 09:21 words like color c o l o r sometimes and 09:24 words color c o l o u r. So he'd use 09:27 words like you know that interchangeably 09:29 g r a y g r e y. He would he would 09:32 alternate between British and American 09:34 spelling of the English language but he 09:37 was always writing in English and he was 09:38 clearly you know English was his native 09:40 tongue. Um for his birthday he selected 09:44 uh the day of his birthday he selected 09:47 as the day that JF uh sorry uh FDR 09:50 Franklin Delaw Roosevelt belt uh 09:53 confiscated everyone's gold and Satoshi 09:56 Nakamoto often compared Bitcoin to 09:58 digital gold. Uh it's a digital 10:00 electronic gold. It's as precious and 10:02 more as now it's more you know it's as 10:04 valuable as gold except you can send it 10:06 over the internet. Uh, so he said he he 10:08 chose the day that um Franklin Delano 10:11 Roosevelt forcibly took away everyone's 10:14 gold back in 1933. He chose that day as 10:17 his birthday. And he chose the year of 10:20 his birthday on the message boards 10:22 online, the the public forums. He chose 10:24 the year of his birthday, the year that 10:26 Americans were allowed to reown gold, 10:29 which I think was uh 17 I think it was 10:31 1776. So it was either 1775 or 1776 that 10:36 uh average people owning gold was 10:38 relegalized after Franklin Delano 10:41 Roosevelt forcibly confiscated 10:43 everyone's gold in 1933. That was 10:45 reversed I think in 1975 or 1976. 10:48 Anyway, that was the year Satoshi chose 10:51 to uh as his birthday and the difficulty 10:54 adjustment, which is how often the 10:56 Bitcoin algorithm adjusts to make it 10:58 easier or harder to mine the Bitcoin so 11:01 that it's always mined about every 10 11:02 minutes. That is every 2016 blocks uh 6 11:07 sorry 2016, which is the exact inverse 11:10 of Executive Order 6102, which is the 11:14 executive order where Franklin Delano 11:16 Roosevelt took away everyone's gold. 11:17 that was done forcible confiscation of 11:20 the gold was done with executive order 11:22 6102. And when Satoshi Nakamoto created 11:25 Bitcoin, he set the difficulty 11:27 adjustment at 2016, which is the inverse 11:30 uh four digits of 6102. Uh and then at 11:34 various points, he talked about in the 11:35 message boards about how he was trying 11:37 to create digital gold, how you know the 11:40 physical yellow metal gold had been 11:42 confiscated. He talked about the fact 11:43 that he was trying to create an 11:45 alternative money that the government 11:46 could not confiscate that worked over 11:48 the internet. And um and obviously by 11:51 using the headline chancellor on the 11:53 brink of second bailout of the banks, he 11:56 highlighted the fact that he had created 11:58 Bitcoin as an answer to the 2008 uh 12:01 financial recession and all the insanity 12:03 and stupidity of all of that with 12:04 bailouts everywhere because in Bitcoin 12:06 there are no bailouts. You can't make 12:07 money out of thin air. So you can't bail 12:09 anyone out out because Bitcoin is 12:11 Bitcoin. Like there's no you can't just 12:14 print money out of thin air and give it 12:15 to people who make bad decisions like 12:17 they did in 2008. And you know most of 12:19 the the worst you know behaving people 12:22 got bailed out which is you know crazy. 12:24 Um so anyway uh all that to say that is 12:27 how Bitcoin was. To recap it took 18 12:30 months to create. It was created by 12:31 someone named Satoshi Nakamoto. Uh I'll 12:34 post in the comments the link to the 12:36 video where I talk about Satoshi 12:37 Nakamoto. It was launched 18 months 12:39 after it was started, the creation 12:41 started uh which was about 2 months 12:44 after the white paper was released uh 12:46 which was January 3rd of 2009 and it was 12:49 a free and fair launch where everyone in 12:51 the world could start running the 12:52 software simultaneously and have an 12:54 equal shot at Bitcoin uh obvious and 12:56 then he launched it on message boards 12:58 and said hey I've created this new 12:60 amazing thing everyone please try it out 13:02 and most of the people thought it 13:03 wouldn't work uh the reception back then 13:05 was surprisingly tepid of people saying, 13:08 "We've been trying to create digital 13:10 currency for 40 years now. It's never 13:12 worked. It's never going to work. Surely 13:14 you haven't cracked the code that 13:15 everybody else has failed at." Well, he 13:18 did. Just like for decades, people were 13:20 talking about uh AI and how big a deal 13:22 AI was going to be. And 40 years of 13:25 people trying to do AI, finally, you 13:27 know, Open AI with their app chat GPT 13:30 finally cracks the code. And suddenly AI 13:32 is a huge deal. It went from basically 13:34 nothing for decades and then suddenly 13:36 chat GPT turned the corner, cracked the 13:39 code, cracked the nut and made it 13:41 actually work and suddenly boom, AI is 13:44 everywhere. Um, that's the same way 13:46 Bitcoin was. They had been trying to 13:48 crack the code on how to create a money, 13:50 a digital money that was scarce that you 13:53 could not just copy paste and make more 13:54 of. They had tried to do that for 40 13:56 years and finally Satoshi Nakamoto put 13:59 in place the very last pieces of the 14:01 puzzle and boom made it work but most 14:03 people thought it couldn't work. So he 14:05 actually had to do a ton of marketing of 14:07 this new idea posting it on message 14:09 boards encouraging people to try it and 14:11 most of the people were just ignored it. 14:13 The vast majority of people who are 14:14 aware of it were like this has been 14:16 tried something like this has been tried 14:18 too many times. It's never going to 14:19 work. And he keeps kept saying yeah but 14:21 nobody's tried it this way. This is 14:23 decentralized. Nobody's in control. It 14:26 runs on servers all over the world. 14:28 There's no one single point of failure. 14:30 There's nobody for the government to go 14:32 arrest. There's nobody there's no single 14:34 point for the government to go shut it 14:36 down. And finally enough people believed 14:39 him that they tried the software and it 14:40 did work. And here we are today with 14:42 Bitcoin worth more than $2.5 trillion. 14:46 uh and you know probably 400 million 14:49 people in the world own it which is 14:50 still only 5% of the population which is 14:52 why if you're buying Bitcoin now you're 14:54 still very early because you know 14:56 Bitcoin is only owned by 5% of the world 14:58 which means 95% of the world owns zero 15:02 Bitcoin. Uh so anyway that's the story 15:04 of the creation and launch of Bitcoin. 15:07 And uh again watch my video specifically 15:09 about Satoshi Nakamoto if you want a 15:11 little more detail on all of that. Have 15:12 a great day everyone. Thanks.