How the NSA helped create Bitcoin

Welcome to the cryptohunt jam where we spend one minute a day to explain crypto. In plain english.

You’ve heard it everywhere: most governments are really cautious about cryptocurrencies, some even feel threatened by the new technology. It will come as a surprise to you then that the NSA, America’s National Security Agency and one of the largest intelligence agencies in the world, actually created the technology that Bitcoin is based on.

How is this possible? Let’s dig in.

It is the year 1993! The internet is just at the brink of mass adoption, very exciting times! And the military had been using it for a while already, and so have universities, and the US government started to think about security: What if someone figured out a way to listen in?

The problem at the time was that security was based on encryption algorithms that kept getting cracked by talented hackers and mathematicians. So the NSA decided: Let’s create our own and make it available to everyone. A secure internet for all is better than one everyone can hack. They called it SHA, for “secure hashing algorithm” and it took off like crazy: Everyone uses a version of it today. In fact, even the data transferring my voice to you is encrypted by it right now.

And ironically, the very thing the US government aims to regulate also uses the same algorithms. Bitcoin would not be possible without SHA, and thanks to the NSA anyone can use it for their project. In fact, SHA is so good that Bitcoin was never hacked.

So, next time the topic at the family dinner table turns to the government, you can point out that our internet would not be the same without the NSA.

Disclaimer: This podcast references our opinion and is for information purposes only. It is not intended to be investment advice. Do your own research and seek a duly licensed professional for investment advice.