Bitcoin is a decentralized peer-to-peer payment network that allows for censorship-resistant transactions without middlemen. It uses cryptography to secure transactions recorded on a shared public ledger called the blockchain. Miners verify transactions and are rewarded with new bitcoins. The document argues that bitcoin is the most important invention of the 21st century as the first global decentralized currency allowing instant value transfer anywhere, with the potential to enable new technologies beyond payments.

1. Bitcoin: What It Is, How It Works,
And Why It's The Most Important
Invention of the 21st
Century

2. 
John Light

BitcoinConsultant.me

Almost one year of
professional
experience and two
years of personal
experience with Bitcoin

3. “Commerce on the Internet has come to rely
almost exclusively on financial institutions
serving as trusted third parties to process
electronic payments. While the system works
well enough for most transactions, it still suffers
from the inherent weaknesses of the trust
based model... [a] purely peer-to-peer version
of electronic cash would allow online payments
to be sent directly from one party to another
without going through a financial institution.”
- Satoshi Nakamoto
Bitcoin: A Peer-to-Peer Electronic Cash System
(AKA “The Bitcoin Whitepaper”)

4. What is Bitcoin?

Decentralized, distributed, p2p payment network
− Not controlled by a central authority
− No middlemen between transactions
− Transactions are irreversible
− Changes to the core payment protocol must be
adopted by a majority of the network

Cryptocurrency
− Secured by 256-bit encryption
− Only 21 million currency units produced

Each unit can be broken in 100 million pieces

5. How Does Bitcoin Work?

Transactions are spent using a cryptographic
public/private key pair.

All transactions are added to the global Bitcoin
ledger known as the “blockchain.”

Blocks on the blockchain contain the previous
~10 minutes of transactions which are verified
by “miners.”

“Mining” both creates new bitcoins and secures
the payment network against fraud.

Mined blocks release 25 new bitcoins; this
number halves approximately every four years

6. Why Bitcoin Is The Most Important
Invention of the 21st
Century

First global, decentralized, censorship-proof
currency.

People can transfer value to anywhere on the
planet instantly.

Bitcoin is deflationary, but can accommodate an
unlimited market size.

Bitcoin enables new technology completely
separate from its function as a payment network.

7. Why Bitcoin Is The Most Important
Invention of the 21st
Century

First global, decentralized, censorship-proof
currency.

People can transfer value to anywhere on the
planet instantly.

Bitcoin is deflationary, but can accommodate an
unlimited market size.

Bitcoin enables new technology completely
separate from its function as a payment network.