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Author: Admin | 2025-04-28
Like this as a given. As I started talking to people about it, I struggled to explain Bitcoin simply to very different people. Upon reflection, that should have been obvious, given how different each of the above four definitions are (hindsight is a funny thing). That’s where the quote from Einstein at the start of this article came in for me.I was talking about something, thinking I properly understood it. The fact that I couldn’t simply explain it showed me I hadn’t done the work to understand it fundamentally myself. Since then, it’s taken me hundreds of hours and significant thinking to realise my simple yet powerful definition of Bitcoin. The idealist in me who assumes that we are way ahead of our global adoption journey would tell you that. Bitcoin is a peer-to-peer digital assetThe reality is that this field is in its infancy, and until there are some widely held truths, this definition needs a level of detail that makes up for this. With that in mind, the definition I’ve settled on isBitcoin is a scarce, secure and decentralised digital assetAt first, you may say, “That’s way too simple to be accurate” or “You haven’t put much effort into that definition.” That statement is fair if one considers those four other definitions as a starting point. However, I will argue now that my definition covers everything that every other definition tries to convey more simply and concisely. The mental model I used to work through this was the Why/How Ladder. This tool, which I picked up during my time at Telstra in strategic planning, is an exercise in understanding the most fundamental reason behind the discussed topic. When you look at the definitions above, you realise several keywords exist. The below word cloud was what I came up withYou can then apply the Why/How ladder and cluster these words into themes. What was helpful in this exercise was that I could understand the purpose of each of these elements and the relationship between them, so if I’m ever questioned about this in the future, I’ll know exactly how to describe the detail in context.From this point, it was easy to define Bitcoin: “Bitcoin is a scarce, secure, and decentralised digital asset.”Bitcoin being digital is something that most people would agree with. But if you asked them if they could define digital and digital technologies, I expect you’d find a wide array of explanations. To ensure we were all on the same page, I turned to the academic literature. This search found that most literature focuses on digital transformation and often doesn’t define what digital is.567 However, I did find two papers that describe it well and came to this definition: digital technologies combine information (reduced to binary code), computing, communication, and connectivity technologies.89Using that definition as a framework, we can see how all the elements line up.Information: Blockchain, consensus, cryptography, 21,000,000Computing: Proof-of-Work, Mining, consensus, nodeCommunication: Peer-to-peer, decentralised, consensus, nodeConnectivity: Peer-to-peer, decentralised, nodeThis could be seen as going too
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