You may not realize this, but the biggest shift in technology in human history is happening right underneath your nose (and has been since 2008 - more on this in a bit).

This new technology will soon impact every single business on the planet, just like the internet did. This new technology is Bitcoin, and its underlying blockchain structure.

Bitcoin's origin story - a mysterious figure arises

Take a step back and imagine that you have decided to take on giant governments and hugely powerful central banks worth trillions and you are going to create a currency to eliminate their business and control.

Do you think you’d be a bit scared (for your life!)? I sure would be! With that in mind, I’d like to introduce you to the creator of Bitcoin: ‘Satoshi Nakamoto’.

One of the great internet mysteries: Who is Satoshi Nakamoto?

This is pseudonym for the creator or creators of Bitcoin. Satoshi was very careful to only interact with others through PGP encryption so that his/her/their identity was always kept a total secret.

After seeing others who have tried to create their own form of online currency but get essentially hunted down by the government, Satoshi decided it was best to stay pseudonymous.

There were many attempts to create an online currency but each failed for one reason or another until Bitcoin was created. Take a look at this excellent chart (and the accompanying article on CoinDesk) to see just how many attempts were made before Bitcoin succeeded:

There have been many attempts to unmask this person, all of which so far have been unsuccessful.  Everyone has their own theories, some think 'Satoshi Nakamoto' was actually a group of cryptographers, developers, and more, but we may never know.

One thing is for sure - Satoshi Nakamoto was a freaking genius who single-handedly created the most important technology related to money in the last 2000 years.

Lets talk about why Bitcoin is such a game changer.

I think the easiest way to start out here is for you to visually see it.  This short video from the documentary “The Rise and Rise of Bitcoin” is a perfect start that is under 2 minutes long:

The Rise of Bitcoin from Duncan Elms on Vimeo.   Lets separate the terms ‘Bitcoin’ and ‘Blockchain’ first to make sure you understand each and how they differ.  

Blockchain

  Blockchain: the first blockchain (sometimes referred to as THE blockchain) was the Bitcoin blockchain.  Any other blockchain can be referred to as A blockchain (I know, confusing AF).   Blockchain: this is going to get somewhat complicated but realize you don’t need to fully grasp everything in minute detail to use Bitcoin or other cryptocurrencies.  I’m assuming you don’t fully understand how TCP/IP protocol or SMTP protocols fully function but you still easily use the internet and email each day :)   What follows is a breakdown of what the blockchain is for those of you who are more technically inclined and love knowing the intricate detail of how things work.  I’m going to give you the first sentence of a full page description from the Bitcoin Wiki, and then I’ll break it down.  

Wikipedia's definition of blockchain

  A block chain is a transaction database shared by all nodes participating in a system based on the Bitcoin protocol. A full copy of a currency's block chain contains every transaction ever executed in the currency. With this information, one can find out how much value belonged to each address at any point in history. Each block contains a timestamp and a link to a previous block.[6] A blockchain is typically managed by a peer-to-peer network collectively adhering to a protocol for validating new blocks. By design, blockchains are inherently resistant to modification of the data. Once recorded, the data in any given block cannot be altered retroactively without the alteration of all subsequent blocks and the collusion of the network. Functionally, a blockchain can serve as "an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way. The ledger itself can also be programmed to trigger transactions automatically."[7]  

Enough with the 'geekspeak' lets break this down in much simpler terms

    Lets unpack all that.  In short, a blockchain is a distributed (meaning many people have a copy) ledger (a copy of all the transactions ever sent and received, as well as a list of who has what).  In short, everyone has an identical 'copy of the books'.   Just like in accounting 101, a ledger ‘keeps the books’ of transactions coming in and transactions going out since the beginning of the network.   It means that 'everyone keeps the books' all at the same time so everyone on the network has the same info as everyone else.   This way, everyone knows which addresses contain how much Bitcoin, which addresses have sent other addresses Bitcoin, and everyone balances the books together.  Because of this, there is no way to spoof the network.

This is an excellent video that shows generally how Bitcoins are mined (created):  

  Here is another example that is easy to understand:     Miners are incentivized to verify Bitcoin transactions by receiving Bitcoin for each set of transactions they verify correctly.   Once all the transactions in the block are recorded, the race begins for miners around the world to solve a very complex math equation created by the Bitcoin algorithm.   All this does is make a miner expend electricity and actual physical computation in order to solve this equations. This keeps the network secure, because in order to ‘hack’ the system, a hacker would need to expend a huge amount of electrical energy in order to unravel blocks that have already been verified.  

Why you can't 'cheat' at Bitcoin by sending fake Bitcoins or changing past transactions

  Think of it as each block since the beginning of Bitcoins creation is covered in amber, just like the mosquito in the Jurassic Park movies.   Each block in the blockchain adds another layer of amber on top of it which makes it harder and harder to change what is in the middle of that amber. This adds a ton of security to the network which makes it un-hackable.   Here is another way to look at it:    

Its effectively impossible to 'change the books' after a transaction has been sent/received

  Another thing people think about Bitcoin getting hacked is 'what if people can stop a transaction from going through or alter a record (block) that has already been established?'  Mining Bitcoin uses a tremendous amount of physical energy - electricity.  Its really freaking expensive to mine Bitcoin because the calculations miners do are quadrillions of calculations per second.   Just so you don't think that Bitcoin mining is a bunch of people's home computers validating transactions, I want to show you what a few typical Bitcoin mining operation looks like:        

Good luck overpowering that to accomplish a hack!

  The sheer physical amount of energy the Bitcoin network of computers and miners requires means it is mind-bogglingly difficult to overpower because a ‘hacker’ would need to overpower 51% of all the computing power behind all of Bitcoin to reverse the most recent individual block of transactions.   There are tons of mining farms like the photos I just showed you.  Each of those little boxes is a very expensive computer with chips and hardware specially designed and optimized only to mine Bitcoin.  In order to hack the Bitcoin network a hacker would need to provide enough computing power to overpower 51% of the entire worldwide network - meaning every one of those specialized computers on the entire planet and sustain that level of power over time.  

Lets see how hard it would be to change a record from a week ago

  In order to change a record from a week ago, the hacker would need to overpower the entire Bitcoin network for every single block all the way back to the block in question.   In short, it would have to dig out a ton of stuff in order to get to it.  At this stage its physically impossible to overpower the Bitcoin computing network, even if you threw every server that Google, Facebook, Twitter, Bing, Microsoft, etc. all had at it together it wouldn’t come close.  

Game Theory - incentivizing people to mine Bitcoin vs. attack the network

    Proof of Work is an incredible invention that incentivizes hackers to just mine Bitcoin to make more money than they would make hacking it.  This means that even state-level actors (entire governments) couldn’t take down the Bitcoin network.   Because it costs so much money to try and attack the Bitcoin network with massive computing power, hackers would actually make more money by just mining Bitcoin, thus adding even more to the security of the network.  

Perfect example: even one of the biggest botnets in the world mines Bitcoin!

  Here is a perfect example: the Mirai botnet (a huge collection of computers that have been hacked that do the hackers bidding) found it more profitable to mine Bitcoin than try and hack the Bitcoin network!  One of the biggest botnets out there is actually helping further secure the Bitcoin network!   All of this ends up creating an immutable (unalterable), permanent, trust-less ledger for transferring information and value.  That is a true game changer.