1/ Everyone knows that time is money. In the digital realm, however, money is also intricately related to time. It has to be.

2/ Among other things, money solves a coordination problem. Trading a single good against others solves the combinatorial explosion of a barter economy. It is a scalability solution that allows coordination across large groups of people.

3/ The two basic forms of money are ledgers (made of information) and physical tokens (made of atoms). Physical tokens keep track of themselves. Ledgers need someone who is in charge.

4/ In the informational realm, only ledgers exist. And to make sure that transactions on a ledger are in order, a concept of time is required. In other words: Tokens are timeless, ledgers are not.

5/ A decentralized system can't rely on our human concept of time. A trustless, non-local time is required. Trustless, because we must not introduce a third party. Non-local because we don't have the luxury of a central frame of reference.

6/ Bitcoin creates its own sense of time using two essential building blocks: causality and unpredictability. Causal links are settling the past. Unpredictable events are opening the doors to the future. The chain tip is the eternal now.

7/ Bitcoin uses SHA-256 and digital signatures as its causal building blocks and the ever-changing interactions of its peers, as well as the randomness of PoW as its source of entropy.

8/ This intricate dance of coordination creates a moment in time that every node can verify for itself. It can trust, with a very high probability, that this is what actually happened in the past.

9/ The difficulty adjustment makes sure that Bitcoin's time and our time stay in sync. It is the probabilistic metronome that orchestrates the intricate dance of the network.

10/ By creating a novel definition of time, Satoshi managed to solve an otherwise intractable coordination problem in our relativistic universe: agreeing on the order of things on a global scale.

11/ I hope you have enjoyed this time-centered view on Bitcoin. The next time someone asks what Bitcoin is, simply answer: "It is time."

12/ Thanks to everyone who helped with this piece: @Croesus_BTC, @FriarHass, @citizenbitcoin, @skwp, @joernroeder, @SwanBitcoin - and thanks to all my supporters. I wouldn't be able to do this without you.


Bitcoin's scarcity harnesses the potential value of all time (infinity) to unburden us from our extremely finite time to accrue value.

The forward looking individual can secure the only form of immortality known to mortals which is to retain their value beyond their existence.

Sign in to participate in the conversation
Bitcoin Mastodon

Bitcoin Maston Instance