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The birth of Bitcoin

2 min read

拝啓, (Japanese as Satoshi Nakamoto claims to be from Japan)

this weeks topic is more on the hipster side of things: Bitcoin. Everyone is talking again about it as the price is rallying, but how did this whole Blockchain thing get started? The original whitepaper by Satoshi Nakamoto is perceived as the starting point of this revolution. When I first read it I was confused, why no-one before thought about this before, as the idea is quite easy after all. (Looking into the bitcoin code I got why it was difficult :’D)


Abstract:

A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution. Digital signatures provide part of the solution, but the main benefits are lost if a trusted third party is still required to prevent double-spending.We propose a solution to the double-spending problem using a peer-to-peer network.The network timestamps transactions by hashing them into an ongoing chain of hash-based proof-of-work, forming a record that cannot be changed without redoing the proof-of-work. The longest chain not only serves as proof of the sequence of events witnessed, but proof that it came from the largest pool of CPU power. As long as a majority of CPU power is controlled by nodes that are not cooperating to attack the network, they’ll generate the longest chain and outpace attackers. The network itself requires minimal structure. Messages are broadcast on a best effort basis, and nodes can leave and rejoin the network at will, accepting the longest proof-of-work chain as proof of what happened while they were gone.

Download Link:

https://bitcoin.org/bitcoin.pdf


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With much love,
Simon Frey