Problem: Multiply two n-digit numbers.
Grade school: O(n2) digit operations.
Karatsuba's insight: Split each number into two halves. x=a⋅10n/2+b, y=c⋅10n/2+d.
xy=ac⋅10n+(ad+bc)⋅10n/2+bd
This needs 4 multiplications. Karatsuba reduces it to 3:
(ad+bc)=(a+b)(c+d)−ac−bd
Recurrence: T(n)=3T(n/2)+O(n)
By Master Theorem: T(n)=O(nlog23)≈O(n1.585)
This beats O(n2) for large n. Modern libraries use even faster algorithms (Toom-Cook, FFT).