Bitcoin White Paper: A Peer-to-Peer Electronic Cash System [Full Text] By Satoshi Nakamoto

17 Jul 2019

Abstract

Bitcoin White Paper: 7. Reclaiming Disk Space

14 Jul 2019

Once the latest transaction in a coin is buried under enough blocks, the spent transactions before it can be discarded to save disk space. To facilitate this without breaking the block's hash,transactions are hashed in a Merkle Tree [7][2][5], with only the root included in the block's hash.Old blocks can then be compacted by stubbing off branches of the tree. The interior hashes do not need to be stored.

Bitcoin White Paper Table of Contents

27 Jun 2019

Bitcoin: A Peer-to-Peer Electronic Cash System

Bitcoin White Paper Abstract

27 Jun 2019

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 re doing 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 effortbasis, 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

Bitcoin White Paper: 1. Introduction

27 Jun 2019

Commerce on the Internet has come to rely almost exclusively on financial institutions serving a strusted third parties to process electronic payments. While the system works well enough formost transactions, it still suffers from the inherent weaknesses of the trust based model.Completely non-reversible transactions are not really possible, since financial institutions cannotavoid mediating disputes. The cost of mediation increases transaction costs, limiting theminimum 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 mustbe 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.

Bitcoin White Paper: 2. Transactions

27 Jun 2019

We define an electronic coin as a chain of digital signatures. Each owner transfers the coin to thenext by digitally signing a hash of the previous transaction and the public key of the next ownerand adding these to the end of the coin. A payee can verify the signatures to verify the chain of ownership.

Bitcoin White Paper: 3. Timestamp Server

27 Jun 2019

The solution we propose begins with a timestamp server. A timestamp server works by taking a hash of a block of items to be timestamped and widely publishing the hash, such as in anewspaper or Usenet post [2-5]. The timestamp proves that the data must have existed at thetime, obviously, in order to get into the hash. Each timestamp includes the previous timestamp in its hash, forming a chain, with each additional timestamp reinforcing the ones before it.

Bitcoin White Paper: 4. Proof-of-Work

27 Jun 2019

To implement a distributed timestamp server on a peer-to-peer basis, we will need to use a proof-of-work system similar to Adam Back's Hash cash [6], rather than newspaper or Usenet posts. The proof-of-work involves scanning for a value that when hashed, such as with SHA-256, the hash begins with a number of zero bits. The average work required is exponential in the number of zero bits required and can be verified by executing a single hash.

Bitcoin White Paper: 5. Network

27 Jun 2019

The steps to run the network are as follows: