## The Most Innovative Technology of the 21st Century ### The Most Innovative Technology of the 21st Century  #### Metadata * Author: [[Aaryaman Vir]] * Full Title: The Most Innovative Technology of the 21st Century * Category: #articles * URL: <https://tigerfeathers.substack.com/p/the-most-innovative-technology-of?s=r&cmdid=WIHTBPMHWM3OWO> #### Highlights * think this is worth understanding because while we may take it for granted today, it is pretty crazy that Bitcoin even exists in the first place. The fact that I can use some computer program to reliably move money anywhere in the world without the permission, support, or interference of any government, bank, or payment network is frankly amazing. * If there is no central intermediary, there is no question of a corrupt central authority rigging the system in their own favour If there is no central intermediary, the costs needed to sustain and trust that intermediary are removed from the transaction If people are in custody of their own funds, everybody gains more security and financial sovereignty * So given this objective, the system has to satisfy the following criteria: People need to be able to make and receive payments There should not be any central third party or intermediary who people need to trust in order to use the payment system The system should just 'work' well enough that it can serve as a viable payment system - if the payments made in this system can be fraudulent or prone to rollbacks or other critical errors, then nobody would trust it and the whole exercise of building the system would be futile * When you rely on a trusted institution to make payments, the logic goes something like this: My money is held in an account managed by ABC Bank I have a contract with ABC Bank that governs the rights and responsibilities around that money (they cannot lose it, cannot take it etc) The contract is enforceable by law The country I live in has the means and inclination to uphold the laws of the land * Hiding: A good hash function hides the input. When you use a hash function to get an output, there should be no way that you can link or trace that output back to any input. If x is the input and H(x) is the output after hashing, there is no way that we should be able to determine x if we only have H(x). This is possible because hashing is a one-way process. Unlike adding and subtracting, the arithmetic operations involved in hashing are very difficult to undo. The act of hashing something is quick and easy, but the act of taking a hash and trying to reverse engineer the input is practically impossible. For comparison, you could think of mixing two different colours of sand - it is simple and quick to mix up the sand, but much harder and more time consuming to separate it into the original components. We might also add here that hashing is a deterministic process. That means hashing the same input will always give you the same output - there is no randomness involved in the jumbling, only complicated arithmetic that is very easy to do while generating a hash but impossible to do when trying to turn a hash back into its input. # The Most Innovative Technology of the 21st Century  ## Metadata - Author: [[Aaryaman Vir]] - Full Title: The Most Innovative Technology of the 21st Century - Category: #articles - URL: https://tigerfeathers.substack.com/p/the-most-innovative-technology-of?s=r&cmdid=WIHTBPMHWM3OWO ## Highlights - think this is worth understanding because while we may take it for granted today, it is pretty crazy that Bitcoin even exists in the first place. The fact that I can use some computer program to reliably move money anywhere in the world without the permission, support, or interference of any government, bank, or payment network is frankly amazing. - If there is no central intermediary, there is no question of a corrupt central authority rigging the system in their own favour If there is no central intermediary, the costs needed to sustain and trust that intermediary are removed from the transaction  If people are in custody of their own funds, everybody gains more security and financial sovereignty - So given this objective, the system has to satisfy the following criteria: People need to be able to make and receive payments There should not be any central third party or intermediary who people need to trust in order to use the payment system The system should just ‘work’ well enough that it can serve as a viable payment system - if the payments made in this system can be fraudulent or prone to rollbacks or other critical errors, then nobody would trust it and the whole exercise of building the system would be futile - When you rely on a trusted institution to make payments, the logic goes something like this: My money is held in an account managed by ABC Bank I have a contract with ABC Bank that governs the rights and responsibilities around that money (they cannot lose it, cannot take it etc) The contract is enforceable by law The country I live in has the means and inclination to uphold the laws of the land - Hiding: A good hash function hides the input. When you use a hash function to get an output, there should be no way that you can link or trace that output back to any input. If x is the input and H(x) is the output after hashing, there is no way that we should be able to determine x if we only have H(x). This is possible because hashing is a one-way process. Unlike adding and subtracting, the arithmetic operations involved in hashing are very difficult to undo. The act of hashing something is quick and easy, but the act of taking a hash and trying to reverse engineer the input is practically impossible. For comparison, you could think of mixing two different colours of sand - it is simple and quick to mix up the sand, but much harder and more time consuming to separate it into the original components. We might also add here that hashing is a deterministic process. That means hashing the same input will always give you the same output - there is no randomness involved in the jumbling, only complicated arithmetic that is very easy to do while generating a hash but impossible to do when trying to turn a hash back into its input.