There is a mystery surrounding the invention and success of Bitcoin. It requires math, computer programming skill, logic, altruism, social responsibility, and more math. Was Bitcoin invented by Bill Gates?
Bill Gates and Paul Allen co-founded Microsoft on the 4th of April, 1975. Over time, BIll Gates rose to become CEO of Microsoft, later succeeded by Steve Ballmer. On the 4th of February 2014, Satya Nadella became CEO.
Upon leaving the role of CEO, Bill Gates most prominent role became Chairman of the Bill and Melinda Gates Foundation, a charitable entity focused on healthcare and education, with an endowment of over US$40 billion.
What role, if any, did Bill Gates play in the creation of Bitcoin?
What is Bitcoin?
Bitcoin is the most high-profile of a number of digital currencies, known as Crypto-Currencies. Ostensibly, a crypto-currency is an electronic form of payment that can be transferred over the internet, to pay for online transactions.
More recently, people have invented methods of converting digital currency into sovereign currency, such as the US Dollar and British Pound, to pay for real-world items.
How is Bitcoin manufactured?
The simple answer is, by using computers to calculate complex math problems. Each math problem that is solved, becomes part of a block, which becomes part of a blockchain, which is verified by another mathematical algorithm. Once verified, the solutions in that block contribute to the creation of a Bitcoin.
To balance the creation and value of Bitcoin, as more and more coins are created, the complexity of the math problems used increases, slowing down the overall manufacture of blocks. More computing power is then required to create blocks, slowing down the production of blocks. This slows production, and potentially increases the value of existing Bitcoins.
As more computing power is allocated to increase the creation of blocks, this hurdle is overcome, and blocks resume production, leveling out supply and reducing the inflated value of Bitcoins.
This built-in balancing mechanism hints at the social responsibility of the creator of Bitcoin, who realised that unchecked increases in computing power could produce an enormous amount of new Bitcoin, driving up values and spurring a "gold rush" in both the value of and creation of coins.
Video Explanation
For a more visual overview of the process, watch the video here.
The thought process behind Bitcoin
From the illustration above, we can see that it's more than just a digital currency.
The inventor put in place a series of checks and balances to speed and slow the creation of coins, moderate the value of each coin, and verify transactions made with coins.
While there is no central bank for Bitcoin, there is a public ledger to keep track of transactions, codes, dates, times, amounts, and other details.
The creation of each coin relies on the solving of math problems. The inventor needed a deep understanding of math, computer programming, currencies, accounting, and deregulation. The inventor would also have understood the potential for it to be mis-used, integrating the checks and balances that make Bitcoin harder to mine when it reaches certain thresholds.
Total Volume of Bitcoin
Even though Bitcoin is "mined" and is the result of solving an almost unlimited number of math problems, there is a total volume of coin that cannot be exceeded. This limit was put in place by the creator.
The total volume of Bitcoin that can be created is 21 million coins.
Sidenote: Other Digital Currencies
Bitcoin is sometimes referred to by the abbreviation BTC.
Other digital currencies alongside Bitcoin include:
LiteCoin (LTC)
Ethereum (ETH)
Zcash (ZEC)
Dash
Ripple (XRP)
Monero (XMR)
Who invented Bitcoin?
While the creation of Bitcoin is largely attributed to one man, a Mr Satoshi Nakamoto, his identity remained a mystery. In 2014, an Australian entrepreneur called Craig Wright claimed to be the mysterious Mr Nakamoto.
Other people speculated to be the real Mr Nakamoto include PayPal co-founder Elon Musk, who went on the create Tesla, SpaceX, and The Boring Company. Mr Musk cheekily refers to himself as a hat salesman.
Could it really be Bill Gates?
Bill Gates is well-known as the computer genius behind the creation of Microsoft software, including DOS, Windows, Office, and Internet Explorer.
Bill Gates stepped down as CEO of Microsoft in the year 2000, placing colleague Steve Ballmer in the CEO role from 2000. Steve Ballmer stepped down in 2014, with Satya Nadella becoming CEO from 2014 to the present day.
The Gates Foundation commenced in the year 2000, the same year that Bill Gates stepped down as CEO of Microsoft. It is known that Bill and Melinda devoted a lot of their time to the foundation for many years.
In 2008, Bill Gates coigned the term "Creative Capitalism"
In a speech given in Davos, at the World Economic Forum, Bill Gates said:
"This week’s Economist had a section on corporate responsibility, and it put the problem very nicely. It said it’s the interaction between a company’s principles and its commercial competence that shape the kind of business it will be.
The challenge here is to design a system where market incentives, including profits and recognition, drive those principles to do more for the poor.
I like to call this idea creative capitalism, an approach where governments, businesses, and nonprofits work together to stretch the reach of market forces so that more people can make a profit, or gain recognition, doing work that eases the world’s inequities".
Could it really be Bill Gates?
The internet domain www.bitcoin.org was registered on 18 August 2008.
In November 2008, a research paper was released detailing the cryptocurrency.
The alias Satoshi Nakamoto was coigned.
The first Bitcoin was reported to be released in 2009.
The first block in the blockchain was mined by Satoshi Nakamoto in January 2009, with a reward of 50 Bitcoins.
More details on the early days of Bitcoin can be found here.
The social responsibility and transparent transaction rules built in to Bitcoin, align closely with the values expressed by Bill Gates, both having their public genesis in 2008.
Perhaps Bitcoin is the ultimate representation of creative capitalism.
Until next time,
Xavier Zymantas
XYZtech
XYZ Media Group