We recommend that you have already read: Why Bitcoin?
Where is the Bitcoin software?
Where is the Bitcoin data?
Where is the Bitcoin source code?
Bitcoin is a peer to peer system
Usually, when we think about software, we think about centralized projects that are controlled by a single entity. For example a company or an organization. But in search of a digital currency equivalent to gold in terms of privacy and rigidity of the monetary supply, a central entity means a single point where the project could be stopped and shut down.
Let’s use a metaphor. One of the best ones is BitTorrent. When digital music began to spread, there was one company in particular that responded to people’s need to share music files without any kind of censorship or control. This company was called Napster. Napster had its own servers that ran a computer program that allowed users to share music files. The service provided worked very well for the time. But before long getting pressured by the big music industry players such as Madonna and Metallica the authorities started questioning the legality of this type of service. And since one entity controlled the code, the servers, and the file-sharing indexes, Napster was rather easy to find and to shut down.
Roughly at the same time with Napster, an alternative technology emerged. It was called BitTorrent. BitTorrent caused an evolution in file-sharing since it was a so-called “peer-to-peer” system. This meant that these new systems no longer had a single entity that controls the servers that run a program from a single location, but the information is distributed to so-called nodes of the network. Basically, these nodes can be individual computers using the service. And all of these nodes store and share a part of the files. Yes, some nodes are perhaps more powerful, some more connected and some have more information than others, but we no longer have a single point that can be turned off to stop the entire system. Basically, with BitTorrent, we would have to go to the homes or premises of every individual service user, and we would have to stop them all individually. Naturally, this type of intervention is often extremely costly to implement, making it very difficult to halt decentralized peer-to-peer systems.
So bringing us back to Bitcoin. Simply put, Bitcoin is the attempt to do with money and value, what BitTorrent has done with digital content sharing.
At this point, some might concentrate on the fact that a lot of the information shared using BitTorrent was done so by not respecting the copyright laws of various countries and that makes all “peer to peer” solutions illegal. In reality, this type of view clearly misses the point and falls into the category “If somebody stabs another person with a knife, all knives should be banned, since people are clearly using knives to hurt other people.” Peer to peer is just innovative technology.
And as we covered, decentralization and peer-to-peer is not really new technology. In reality, these types of activities are linked to the very origin of the Internet. This is what often gets forgotten when talking about blockchain technology. The Internet itself had a largely decentralized structure at the beginning, with for example data replicated in newsgroups. Also, peer to peer wasn’t born with Bitcoin. It’s just one of the creative techniques that enable Bitcoin to function.
Bitcoin and open source
When we answer the questions “Where?”, people often tend to think of the location of physical equipment.
Where is the computer program?Where are the machines that run this program?
Who is in control of these machines?
In the case of Bitcoin, it is also essential to ask “Where is the source code?”
This introduces another fundamental concept in Bitcoin, which is the concept of open source. For example, when we download a computer system from Microsoft, a system provided to us by a centralized company, we can choose to trust this company. And in an extreme case, we can, for example, sue the trusted company if something goes wrong. Companies like Microsoft have a reputation to defend and also legal and social incentives to maintain certain standards.
However, in the case of a distributed system such as BitTorrent, there is by design no longer a single company that we can sue. There is no entity responsible for what happens in the software. Thus we can’t trust a service like BitTorrent. We must also be able to verify what computer software like BitTorrent does.
This means it becomes crucial for decentralized systems like BitTorrent and Bitcoin, to also be open source. To allow everyone individually transmit the computer software and the data contained in the software (songs/movies in the case of BitTorrent or financial ledgers if we talk about Bitcoin), but also to share the source code of that software. This way all the users can independently verify the rules and the instructions of the game.
In open source code, development takes place by publicly sharing the source of the program and the source of the code that will be compiled with everyone. This means that when we talk about Bitcoin, we are talking about a “trustless system.” We don’t have to trust a name or a brand. No company officially represents Bitcoin. We have to be able to verify that the code, the software, does exactly what it claims to do.
There are many conspiracy theories about Bitcoin. For example, there are claims that bitcoin mining is actually a backdoor for the American NSA to do some complicated calculations. But these theories are quickly proven wrong by looking at the code and seeing what’s going on “under the hood.”.
So how does the code that nobody controls get updated? How does the development and innovation of a system such as bitcoin, where there is no central body of the decisions, work? This is something that even those who work with corporate and commercial IT companies might have difficulty in understanding.
Simply put, there is a certain group of people (mainly developers) that are working on the project. The individuals in the group often keep changing and some of the participants don’t even announce their legal identity. They might just use pseudonyms to contact with other participants. Their identity is not important, only the lines of code they commit matters.
They use systems such as Git, a distributed version control system for tracking changes in source code during software development. Systems in which everyone can make their own contribution to the code and share it with everyone else. And in the end, the majority of users decide which version of the software they want to download and run.
Bitcoin is a, therefore, a truly decentralized software. There is no single company that can be shut down and no central server that can be turned off. There is not even a single compiled program that must be certified by someone. Everyone can independently verify and try to evolve the source code.
When we talk about Bitcoin working in a certain way, we do not actually talk about things we have to trust, but about the things that we can actually all verify. So where is Bitcoin? It’s in every user of Bitcoin.
Recommended to read next: What is Bitcoin?