Why Was Bitcoin Created?

Bitcoin is now a common household name. So common, that many people forget that less than two decades ago, it didn’t even exist. Bitcoin was created in 2008, and shortly after, the creator, Satoshi Nakamoto, disappeared. Leaving many to ask why he created Bitcoin in the first place.

Bitcoin was invented as the world became increasingly digital and people began to trust their government less and less. Bitcoin offered an easy person to person payment electronic payment system without government oversight. Read on to learn more about the reasons why Bitcoin was created.

1. People No Longer Trusted Governments

In 2008, the world was hit with one of the largest financial crashes since the great depression. Many Americans lost everything, from their homes to their retirement, and suddenly, the government, which had knowingly allowed this all to happen, became the enemy.

Tensions grew when the government proved further untrustworthy when it bailed out these banks, instead of the everyday American who lost everything. As such, many began to question the rising digital payment system—if they could trust the banks to send their money over borders and around the world. After all, these banks were just bailed out by the government for mistakes they knowingly made.

2. Cash Was Disappearing

As we mentioned above, the world was in a technological revolution. In fact, Bitcoin wasn’t the first of the digital currencies invented at the time, rather it was simply the one that worked the best.

The other digital money projects at the time, Bit Gold, b-money, and eCash, were not as decentralized as Bitcoin, and therefore didn’t appeal in the same way Bitcoin did. All of these projects relied on a centralized ledger to record payments, something which people were hesitant to trust.

People wanted a digital way to send money without the banks, and without a financial institution. Bitcoin filled this need.

3. The World Was Growing Smaller

The Silent Generation was nearing their end, and the Baby Boomers were aging. While it was rare for a member of the Silent Generation to travel beyond their hometown unless they were in the military, the Baby Boomers got to see the world—and how hard it was to exchange money in other countries.

The creator of Bitcoin saw the way the world was shrinking, and since they were setting out to make a decentralized payment system not tied to any single government anyway, it was easy to work toward a project that would serve the world—eliminating pricey conversion fees and traveler’s checks once and for all.

4. The World Was Becoming More Dangerous

With the advent of the internet, suddenly, many people realized they weren’t safe in their own homes. Not only did they need to worry about who their children were talking to online, but they had to watch for viruses, hacks, and phishing emails.

Even outside the home, crime rates increased as individuals found it more and more difficult to pay their bills. As a result, people began to search for a safe way to store their money and for secure ways to send their money to family and friends in other countries.

Bitcoin especially was needed in countries where bank accounts were a challenge to come by—because, unlike banks, Bitcoin doesn’t judge, and it was created to be used by anyone.

Of course, cyber criminals have now evolved into asking for their ransoms to be paid in Bitcoin as well, making it once again harder to spot a scam, but at least now people see red flags when they hear the word “money order.”

5. People Wanted Proof

Returning again to the 2008 financial crisis, the people were tired of being taken advantage of—trusting banks to do things for them (like move money) without proof. So, Satoshi Nakamoto gave everyone exactly what they were desiring: a form of money based on proof—that anyone could verify on the decentralized ledger.

Now, we do know that as Bitcoin has grown, it has come to light that the world doesn’t have the natural resources to support more than one of these proof-of-work blockchains. However, Bitcoin showed everyone what was possible with cryptography, and the tech world has exploded with other consensus methods that are viable. Take Ethereum, for example, which is now based on proof of stake—it came to be thanks to Bitcoin—because it started with the proof of work consensus mechanism.

6. People Wanted Change

Above all else, the world was desperate to move forward in a way that wouldn’t end in another financial crisis in another decade. People wanted change in the financial system, and one of the reasons Bitcoin did so well (in our opinion) was because people were open-minded about how that change would come. They wanted it so bad, they were ready to listen to their friend talk about a digital form of money they could send to friends and family without a bank account. And thus, Bitcoin got the start it needed to become famous.

7. People Felt Out of Control

Think about it for a moment. When was the last time you felt truly in charge of your life? If you have debt, a mortgage, or rely on your bank for your paycheck, you might be thinking back a ways before you come to it.

Bitcoin was built to give the power back to the people—power over their financial lives after everything had been ripped from them so cruelly. And it did.

The Bitcoin world has come a long way from a whitepaper and a single transaction in 2008, but in our opinion, it has weathered the storm rather well. And still, most people trust it over any other cryptocurrency.

While we can’t promise Bitcoin will always be there, when you look at when and why it was created, it’s easy to see why so many embraced it with open arms. That being said, the future of Bitcoin is unknown, but we are definitely along for the ride.