How Bitcoin Set the Stage for a New Internet

The Blockchain is Born

The most important innovation of Bitcoin was the introduction of blockchain technology to the world.

Decentralization

When you hear people talk about Bitcoin being decentralized, this is what they mean. There is not a single point of failure. Every computer or node running the blockchain would have to go down to take Bitcoin offline. Currently, that’s over 15,000 nodes, not likely to happen.

Consensus Mechanisms

The blockchain is designed to allow anyone to make a transaction without requiring approval by a central authority and instead it’s executed through a code-based protocols. These protocols are called consensus mechanisms. For Bitcoin that consensus mechanism is known as Proof-of-Work (PoW).

Coin Circulation

Another genius element of bitcoin is that the protocol caps the number of bitcoin in existence at 21 million.

Public and Private Keys

The last significant innovation of bitcoin was the introduction of a new digital identity.

Wallets

As you can imagine, keys introduce a high level of complexity and challenge because they are easily lost or forgotten. You can read countless stories of all the lost bitcoin because people lost their keys.

Introducing an Open, Trusted, Decentralized, Permission-less Protocol

While all of these features essentially created an internet currency, they also set the foundation of a new internet that is often referred to as Web3. It introduced an open, trusted, decentralized, permission-less protocol that can be adopted to many uses beyond currency.

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Hassan Karimi

Hassan Karimi

UX/Product designer writing about Web3