Chapter III

Technology

"Now, I'll manage better this time" she said to herself, and began by taking the little golden key, and unlocking the door that led into the garden

Golden keys, clocks which only work by chance, races to solve strange riddles, and builders that don’t have faces or names. What sounds like fairy tales from Wonderland is daily business in the world of Bitcoin.

As we explored in Chapter 2, large parts of the current financial system are systematically broken. Like Alice, we can only hope to manage better this time. But, thanks to a pseudonymous inventor, we have incredibly sophisticated technology to support us this time around: Bitcoin.

Solving problems in a radically decentralized and adversarial environment requires unique solutions. What would otherwise be trivial problems to solve are everything but in this strange world of nodes. Bitcoin relies on strong cryptography for most solutions, at least if looked at through the lens of technology. Just how strong this cryptography is will be explored in one of the following lessons.

Cryptography is what Bitcoin uses to remove trust in authorities. Instead of relying on centralized institutions, the system relies on the final authority of our universe: physics. Some grains of trust still remain, however. We will examine these grains in the second lesson of this chapter.

The last couple of lessons explore the ethos of technological development in Bitcoin, which is arguably as important as the technology itself. Bitcoin is not the next shiny app on your phone. It is the foundation of a new economic reality, which is why Bitcoin should be treated as nuclear-grade financial software.

Where are we in this financial, societal, and technological revolution? Networks and technologies of the past may serve as metaphors for Bitcoins future, which are explored in the last lesson of this chapter.

Once more, strap in and enjoy the ride. Like all exponential technologies, we are about to go parabolic.