Written By 1Bitcoin.ca, July 26th, 2022

The ramifications of Bitcoin will be felt around the world for decades to come. It will unlock opportunities and benefits to billions of people around the world the same way the internet has over the last 4 decades.

While we have written extensively about how Bitcoin works, the true fundamental innovation of Bitcoin rests on one main concept. This is something that had been outside the grasp of computer engineers for decades, since the dawn of the computing era. Technically speaking, Bitcoin solves for the double spend problem and the Byzantine generals problem. It is an issue that all previous forms of attempted digital currencies would run into. How do you ensure that once someone has spent their digital dollars, they are unable to spend them again? Without a third party keeping track of who has which dollars, it is near impossible. Through Bitcoin, this problem is solved, allowing for a digital asset to be scarce and non-replicable for the first time ever.

Computers are great at replicating and spreading information to other computers. Since computers operate through binary, a bunch of 1’s and 0’s, there isn’t much stopping anyone from just copying those exact 1’s and 0’s and having an identical piece of information as the original. This is an issue for someone trying to make something digitally scarce, as the raw information can always be duplicated.

Imagine emailing your friends a photo of a cat. The image itself is not being sent to your friends, it is a copy of that image being sent. Something that started with just you having a photo of a cat now resulted in you and everyone you sent it to having that exact same identical photo. This is great for spreading information, but is not good for trying to create something that is non-replicable and digitally scarce. This is the reason that third parties have always been needed for digitally scarce items before, so they can track the true ownership on a single database.

However, with Bitcoin, we can remove that third party and have something that is truly digitally scarce. There is no copy and paste on Bitcoin!

If someone were to transfer you some Bitcoin, that person is literally transferring you some Bitcoin. There is nothing behind the scenes, it is true digital ownership of that asset with no third party involvement. Bitcoin achieves this through its blockchain, a ledger that acts as a historical record of all transactions that have ever been made with Bitcoin. Every single person has the ability to look at this blockchain and view the history of the coins that were sent to them. It is completely transparent, and trustless due to its decentralized nature.

Because of this, Bitcoin acts as a decentralized clock as it can tell you the time that anything on the blockchain has taken place, and continues to march forward through time with a 0% downtime. This clock is an integral aspect to the decentralized ledger as it allows us to have digital scarcity. Enabling you to prove ownership of something digital without a third party. The revolutionary aspect of this can not be overstated.

We will continue to do a deeper dive in future articles. If you have any questions or comments, never hesitate to reach out to a 1Bitcoin Broker.