from monopoly to bitcoin

What is Bitcoin?

by Ryan Shea of onename.io

the simplest way to learn how Bitcoin works(in under 5 min)

ASHLEY TAYLOR

Let’s talk about Bitcoin

But rather than discuss whatBitcoin is...

Let’s independently designsomething that resembles Bitcoin

Yes,we’re going to re-invent Bitcoin

Here we go...

Let’s imagine we’re playing a board game like Monopoly

Where we have tradable assets(such as houses and hotels)

To trade effectively, we need mutually interchangeable tokens

that we all agree have some value

In other words, we need a currency

Now, with this currency, we’ll want to easily trade in any

denomination, as getting exact change can be a hassle

And we’ll also want it to beimmune to counterfeiting

So, we’ll avoid paper bills

And instead, we’ll give ourselves“balances” and record them in a

notebook

AliSam

Trevor Arianna

100 tokens100 tokens100 tokens100 tokens

We’ll refer to this list of balances as our ledger

This ledger is “law”

In other words, one’s balance iswhatever the ledger says

$QG�WKDWV�oQDO

But what if we have a large game with say 20 or 30 players?

If only I have the ledger, I can increase my balance and cheat

So... we give everyone a notebook with a copy of the ledger

And when balances are updated, the changes are propagated

AliSam

TrevorArianna


AliSam

TrevorArianna


AliSam

TrevorArianna


AliSam

TrevorArianna


Now, let’s say Ali sells something to Sam for 7.5 tokens

AliSam

TrevorArianna

107.5 tokens 92.5 tokens100.0 tokens100.0 tokens

Then Ali shows everyone his copy and says “make these updates”

AliSam

TrevorArianna

AliSam

TrevorArianna



AliSam

TrevorArianna

AliSam

TrevorArianna



If Ali walks to Arianna to show her the update, how does she know that

Sam consented to the exchange?

Well, Ali simply has Sam sign herpaper to express approval of her

balance going down

Relaying changes to 20-30 peopleevery time an exchange occurs can be

time-consuming and impractical

Further, what if we want to have even more players in the game?

And what if some of them are halfway around the world?

How do we synchronize all of these paper ledgers?

Well, we could just move from paper records to digital records

And fancy math to ensure that ourdigital signatures can’t be forged, & thus nobody can spend our money

And... we’ll have balances listed next to account numbers instead of names

(our ledger needs unique lookup values, and names are not guaranteed to be unique)

:LWK�WKHVH�PRGLoFDWLRQV��RXU�JDPH�will allow millions and even billions

of people to transact and trade

Just as with in-person cashtransactions, only the sender and

recipient are involved -there are no middle men

And because there are no middle men, no fees are required

So for the 1st time, you and I can trade directly online and from

anywhere in the world

We just record atransaction amongst ourselves and broadcast it to the world,

proving that it actually occurred

Our currency and payment system is powerful but simple, and we

designed it together

And we’ll call it Bitcoin

from monopoly to bitcoin

Technology