Unlocking Knowledge: Bitcoin in Plain Language
This series continues to translate the original white paper by Satoshi Nakamoto to plain language. The goal is to have easily shared content, and send new people directly to nostr to read it. The original content will be posted, with the plain language below.
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Original
1. Introduction Paragraph 1
Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments. While the system works well enough for most transactions, it still suffers from the inherent weaknesses of the trust based model. Completely non-reversible transactions are not really possible, since financial institutions cannot avoid mediating disputes. The cost of mediation increases transaction costs, limiting the minimum practical transaction size and cutting off the possibility for small casual transactions, and there is a broader cost in the loss of ability to make non-reversible payments for non-reversible services. With the possibility of reversal, the need for trust spreads. Merchants must be wary of their customers, hassling them for more information than they would otherwise need. A certain percentage of fraud is accepted as unavoidable. These costs and payment uncertainties can be avoided in person by using physical currency, but no mechanism exists to make payments over a communications channel without a trusted party.
Plain Language
When we buy things online, we usually rely on banks or other trusted companies to "handle" the money. It works fine most of the time, but there are some issues. For example, once we pay, it's not always possible to undo the transaction if there's a problem. Banks have to step in to solve disputes, which adds extra costs and makes small transactions more difficult.
This reliance on trust also means that merchants have to be careful with every customer, asking for more information than they would really need. There's always a risk of fraud, and we just accept that some amount of cheating is unavoidable.
When we use physical money in person, we can avoid these issues, but when it comes to paying over the Internet without involving a trusted middleman, there's currently no good system in place.
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