The Rule Breakers Guide to Cryptocurrencies: How Did Bitcoin Begin?

FAN Editor

On this week’s Rule Breakers podcast, Motley Fool co-founder David Gardner takes on a topic that he’s never hit before, but that plenty of his listeners want to hear about from him: cryptocurrencies. To answer their questions about bitcoin, Ethereum, blockchain technology, and more, he’s enlisted the help of Fool analyst Aaron Bush.

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In this segment, they lay out the origins of bitcoin, the most well-known and well capitalized of the cryptocurrencies.

A full transcript follows the video.

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This video was recorded on Oct. 18, 2017.

David Gardner: We were talking yesterday about this podcast and you said, “David, maybe it would be helpful to do a bit of storytelling about bitcoin and its founding.” So, a prominent new member of this new asset class. Talk about the founding of bitcoin.

Aaron Bush: Absolutely. So cryptocurrencies, believe it or not, aren’t actually that new of an idea. It was as early as 1981, I believe, that people were trying to solve this problem, but it wasn’t until 2008, when the pseudonymous figure or groups of people, Satoshi Nakamoto, invented bitcoin. Bitcoin is a cryptocurrency that enables decentralized payments, wealth transfer, a store of value. This was the first time that the blockchain was ever invented, and so it was the first time that a cryptocurrency could actually work securely and in such a way that it incentivized people to use it and to support it around the world.

Gardner: So part of the founding is that there’s a mystery as to who even founded it.

Bush: No one knows. No one knows.

Gardner: It’s pseudonymous. It might be a real person or people somewhere hiding, or it might be a completely made-up name. No one knows. That’s part of the beauty of this new technology. Now, Aaron, you said you were doing your research. Back in 1981, you said, they were trying to solve this problem. What is the problem that was trying to be solved starting in 1981?

Bush: Sure. So I think the original problem, it’s a bit of a libertarian’s dream, I guess you could say, to create pieces of society, to create a currency that lives outside of the government so you don’t have to live by the rules …

Gardner: Sovereign nation-states, and borders, and all those things that frankly are a rather new phenomenon — the last three centuries or so, the idea of a nation-state or sovereign nation. But before that, for hundreds of thousands of years there wasn’t that sense of things.

Bush: Absolutely. That’s a big piece of it. Privacy is another concern. It really is more that bleeding-edge group of people that wanted those specific need cases met, and bitcoin allowed that to be met for the first time. I think what is exciting about this movement, in general, is that it’s starting to expand beyond that core group of people into new, exciting applications and new people joining and being interested.

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