Bitcoin Is A Key Component Of The Great Digital Transformation

Many people may not have heard of SHA-256, but I believe it to be one of the greatest American inventions of the 21st century.

Developed by the National Security Agency (NSA) in 2001, SHA-256 is a secure hashing algorithm that, among many other things, is used by your iPhone to encrypt data, including the unique facial characteristics that many of you use to unlock your phone.

It also makes Bitcoin encryption possible. I won’t bore you with the details—you can read more about the algorithm here—but SHA-256 has never been hacked or compromised, making Bitcoin one of the most secure protocols on earth.

This is precisely why Satoshi Nakamoto, Bitcoin’s pseudonymous inventor, chose to build the digital asset on top of it. Writing in 2010, Satoshi said that SHA-256 “can last several decades unless there’s some massive breakthrough attack.”

That’s good news, as Bitcoin is designed to be mined and held for decades to come—and beyond. The very last available bitcoin is expected to be produced sometime in the year 2140. As of this writing, close to 92% of every bitcoin that will ever exist has already been mined, meaning approximately 1.7 million are still up for grabs.

Number of Bitcoins Still Up for Grabs, In Millions

Setting The Record Straight

So why am I telling you all this? Mainly to set the record straight on Bitcoin.

First of all, Bitcoin is a U.S. invention, despite the Japanese-sounding pseudonym of its creator(s). This is important because some people believe it was designed specifically to destabilize the dollar or the traditional monetary system.

That couldn’t be further from the truth, though many advocates believe Bitcoin could one day replace fiat currency. Even the Bank of International Settlements (BIS), one of the most vocal critics of Bitcoin, has issued guidance for central banks to potentially hold digital assets as reserve currencies.