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Like Gold, Bitcoin’s Cryptography Has Been Valued for Millennia



When people debate the value of gold and bitcoin some often cite that gold has been valuable to humans for millennia. Yet people fail to realize that bitcoin’s backbone of cryptography has been valued for thousands of years as well.

Also read:  A Visual Look at Bitcoin Growth and Demand So Far in 2017


Cryptography Has Been Valuable to Humans for Thousands of Years

Like Gold, Bitcoin's Cryptography Has Been Valued for Millennia
Cryptography was regularly used in ancient Egypt.

One of the properties that makes bitcoin valuable is its use of strong cryptographic encryption methods. Cryptography is a very useful science and technology dating back to the Egyptian period of ca-1900 BCE. Archeologists discovered that Egyptians used a method of concealing information by utilizing cyphertext carved on a stone.

In ancient times cryptography was used quite a bit in wars fought by many of the world’s armies and militant groups. The science was used in Greek classical times and during the Roman Empire as well. One of the most famous forms of concealing information using cryptography was the Caesar cipher which replaced letters with numbers that were tethered to a rearranged version of the alphabet. The art of cryptography has been a valuable piece of knowledge that is just as old as the value of precious metals like gold.

Just Like Gold Bitcoin's Cryptography Has Been Valued for a Millenia
Thomas Jefferson’s Cipher Wheel was ahead of its time.

The use of cryptography was also used during many revolutionary periods in human history. During the American Revolution leaders like Thomas Jefferson, Benjamin Franklin, and others used ciphers regularly. In the 1790’s Jefferson built a tool called the “wheel cipher” which used rotating wooden wheels with a marked alphabet. Devices like this were used by militaries all around the world leading up to World War I as Enigma cipher machines became famous during the early 30s and 40s.

Just Like Gold Bitcoin's Cryptography Has Been Valued for a Millenia
World War I Enigma machine. This particular device sold for $249,000 in an auction.

Cryptography and the Computer Era  

The computer era that utilized machine learning revolutionized the entire game of cryptography. In World War II cryptographic messages were used heavily by both sides of the battle and spurred the creation of Colossus, the world’s first programmable computer that cracked ciphers.

Just Like Gold Bitcoin's Cryptography Has Been Valued for a Millenia
Colossus, was the world’s first fully electronic, digital, and programmable computer.

In the seventies, the rise of open source research led to the creation of Whitfield Diffie and Martin Hellman’s public and private key scheme as well as the RSA algorithm. The discoveries during this decade are vital to Bitcoin as the network uses Diffie and Hellman’s symmetric cryptography as well as SHA-256, elliptic curve (ECDSA), and RIPEMD 160 cryptographic schemes. Open Bazaar developer Chris Pacia describes the encryption aspect of bitcoin quite well in his “Bitcoin Explained Like You’re Five” series stating; 

In geek speak, a Bitcoin address is technically a base58 encoded RIPEMD160 hash of a SHA-256 hash of 256-bit public key of an Elliptic Curve Digital Signature Algorithm key pair concatenated with a checksum.

Computational cryptography has enhanced the playing field for civilians as encryption is not just used exclusively by the military these days. After Diffie and Hellman introduced a new form of cryptography to the world, two published books became very popular among the masses—the Block Cipher, and the U.S. Data Encryption Standard.

In the late eighties, these ideas and the values of privacy-enhancing cryptography coalesced into movement of activists called the cypherpunks. During this time the cypherpunks read papers by cryptographer David Chaum, traded ideas via the Cypherpunks mailing list, and heard from visionaries like John Gilmore, Timothy C. May, and Eric Hughes.

Nowadays millions of ordinary people place a lot of value in the art of cryptographic technology with messaging apps like Signal, email with PGP keys, and exchanging monetary value with cryptocurrency. The ideas of privacy-enhancing technologies like digital signatures, virtual currencies, and messaging systems backed by cryptography that was once envisioned by the cypherpunks during the dawn of the internet, have come to fruition. 

Bitcoin is a Prime Example of Cryptographic Innovation

Just Like Gold Bitcoin's Cryptography Has Been Valued for a MilleniaThis day in age people value cryptography for use in their everyday lives, and bitcoin is a great example of this fact. Shiny stones may have kept value for thousands of years, but cryptography has been valued for just as long.

Furthermore, cryptographic research has progressed, leading to stronger forms of private communications and the ability to share wealth in a censorship resistant way with bitcoin. And as time passes encryption techniques keep getting better, while gold never changes. 

Cryptography is a remarkable human achievement and has given life to many of the technologies today; bitcoin is a prime example of these feats.

What do you think about the value of cryptography? Let us know your thoughts in the comments below.


Images via Shutterstock, the Atlantic, Wikipedia, and Pixabay. 


Still have questions about Bitcoin? We have a detailed FAQ section with dozens of general questions and even a free Bitcoin guides page for detailed explanations of several important topics.



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