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.