Introduction

With the launch of Bitcoin in 2009, Satoshi Nakamoto created the first inception of what would become a global public infrastructure of money that is not controlled by anybody but is accessible by everybody. It combined different technological breakthroughs and ideas put forth in the decades prior to solve a fundamental problem of computer science that had entertained the minds of many cryptographers and cyberpunks. In hindsight, it is a historical moment that marks a change in what money is going to be to us. After putting Bitcoin out into the world, its creator mysteriously disappeared.

In this section we will go over how Bitcoin actually works under the hood so we understand how it addresses the aforementioned issues of trust. I have attempted to keep the content somewhat high-level so everybody can follow along, while hopefully doing justice to the impressive nature of the technology.

Nevertheless, I want to stress that some of the content might be difficult to digest at first, especially if you do not have a technical background. If this is your experience, just know that you are not alone. Given the nature of how Bitcoin works, understanding it deeply simply requires discussing some of its technical intricacies, and it is hard to avoid doing so. This means there are essentially two options as to how you can proceed:

• (1) trust me when I say that Bitcoin solves these issues of trust... there is your paradox, or;

• (2) attempt to understand for yourself how Bitcoin solves these issues of trust, even if just at a high-level.

My hope is that going through the upcoming content will help you with option 2. Even if you glance through it and only pick up some of the high-level ideas, this can be enough to develop some confidence in the technology. Also, it is important to note that you do not need to understand how Bitcoin works under the hood if you want to use it yourself. It will make using and owning bitcoin much more enjoyable and empowering but it is certainly not a requirement.

Then lastly, before we dive in, one important note on terminology in the upcoming segments: you will see the word "Bitcoin" and "bitcoin" being used interchangeably, with the difference in the capitalization of the "b". The word "Bitcoin" refers to the concept and idea of Bitcoin, the protocol, and the network that maintains it. The word "bitcoin", without capitalization, is used to describe bitcoins as a unit of account, being the actual money that is send, and which has a market value. Often, this unit of bitcoin is also referred to with the abbreviation of BTC. Put differently, Bitcoin is the total system that makes transactions of the bitcoin currency (BTC) possible.