Evolutionist,
Have you ever read the Bitcoin White Paper? The white paper, released by Satoshi Nakamoto in October of 2008, explains the idea of Bitcoin and a possible solution to transferring electronic cash over the internet, a problem that has haunted technologists since the commercialization of the internet.
The white paper is only nine pages, including diagrams and references. It is shorter than any book you read in high school and arguably more impactful than anything ever written. Over the next few weeks, we will cover the white paper section by section and try to put it into simpler words.
The paper begins with the Abstract, which summarizes a proposed solution to enable direct money transfers between individuals on the internet without a financial institution intermediary. This would be the equivalent of a cash transaction in the real world, with no banks, credit cards, IOUs, or anyone else in the middle.
To accomplish this, a network of computers communicates directly to one another by organizing the transfers of money with a timestamp and recording them to an ongoing blockchain. Think of this as an accountant making a journal entry into a shared spreadsheet with everyone on the network. As long as most computers on the network cooperate, the longest chain will be accurate and prevent attackers from “cooking the books.”
You can find links and the original text of the white paper below. I encourage you to read it and leave your questions in the comments. Next week we will cover the next section, Introduction.
To the moon!
Bitcoin: A Peer-to-Peer Electronic Cash System
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.
51 Percent Attack: An attempt to gain the power to block and reverse Bitcoin transactions by obtaining and using a sufficiently strong pool of computing power to overpower the rest of the Bitcoin network. (Control of 51% of the network).
READ 📚
The Bitcoin Standard: The Decentralized Alternative to Central Banking
The Fiat Standard: The Debt Slavery Alternative to Human Civilization
21 Lessons - What I've Learned from Falling Down the Bitcoin Rabbit Hole
The Blocksize War: The battle over who controls Bitcoin’s protocol rules
The Price of Tomorrow - Why Deflation Is the Key to an Abundant Future
WATCH 📺
Cryptopia - Bitcoin, Blockchains, and the Future of the Internet
Bitcoin: The End of Money as We Know It
Banking On Africa - The Bitcoin Revolution
LISTEN 🎤
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