Satoshi Nakamoto is the pseudonym of an individual or group behind the creation of bitcoin which solves the Byzantine Generals Problem. described by Leslie Lamport.
Bitcoin apparently solves the Byzantine Generals’ Problem by adding a random cost to sending messages, which slows down the rate of message passing to ensure only one camp will be able to broadcast at a time. The cost that it adds is called ‘proof of work’, and is based on calculating a random hash algorithm.
It has been noted however that the Bitcoin blockchain falls short of solving the original Byzantine Generals Problem. It would be more accurate to say that it solves a relaxation of the problem (see link and link).
Bitcoin itself promises the separation of banking & state and is neither controlled by state, banks, corporations. It’s the first international currency and it’s controlled by mathematics.
But the paper Satoshi published is more than just a description for e-currency and money is just the first application. Bitcoin the blockchain is essentially a network layer similar to TCP/IP that allows you to do transactions between a sender and recipient but supports higher layers built on top of it.
The scenario of John paying Sarah 1 bitcoin is done via a stack based protocol in Reverse Polish Notation (RPN). This makes the protocol a highly versatile framework for a variety of transactions that are completely unrelated to e-currency and built on top of the blockchain protocol.
Already we see a host of other ideas that are coming forward such as trust-models, escrow or timelocks, and many more, leveraging the protocol.
Here are some scenarios outside e-money which the protocol supports and that are likely going to disrupt existing industries:
- Anonymous exchange of assets like stock certificates and bearer shares which allows a bearer to both vote in a shareholder election and receive dividends to that coin.
- Income redistribution (taxation) and replacement of hirarchical government structures and politics (governence as an algorithm).
- Global lotteries, elections, crowd-funding, global stock-markets, …
- Dogecoin is a bitcoin variant which has started out as a joke based on the doge Internet meme.
- Sporadic news of certain governments announcing that they’re shutting down bitcoin should be treated as a misunderstaning of what bitcoin is. With it’s decentralized architecture it can be outlawed by nation states but can’t be shut down from a technical pov. The internet would have to be shut down and even then transactions could still take place using other mediums.