Bitcoin was created by Satoshi Nakamoto, a pseudonymous person who outlined the technology in a 2008 white paper. Despite significant efforts by journalists and members of the crypto community, the pseudonymous inventor of Bitcoin remains anonymous.
Whereas Satoshi’s idea for digital money was not the first in the fields of cryptography and computer science, it succeeded to provide an elegant solution to the problem of establishing trust between two independent parties that a) do not know each other and b) are physically located across the world.
Nakamoto devised a pair of intertwined concepts: the Bitcoin private key and the blockchain ledger. When you hold Bitcoin, you control it through a private key—a string of randomized numbers and letters that unlocks a virtual vault containing your purchase. Each private key is tracked on the virtual ledger called the blockchain.
When Bitcoin first appeared, it marked a major breakthrough in computer science, because it solved a fundamental problem of commerce on the internet: how do you transfer value between two people without a trusted intermediary (like a bank) in the middle? By solving that problem, the invention of Bitcoin has wide-ranging ramifications: As a currency designed for the internet, it allows for financial transactions that range across borders and around the globe without the involvement of banks, credit-card companies, lenders, or even governments. When any two people—wherever they might live—can send payments to each other without encountering those gatekeepers, it creates the potential for an open financial system that is more efficient, more free, and more innovative.