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Bitcoin: A Peer-to-Peer Electronic Cash System (2008) [pdf]
- maerF0x0 9y agoThis should be required reading, along with a test, before anyone is allowed to buy/"invest" in them.
- pfisch 9y agoDo you know how a fridge works? How about an airplane? How about how to make steel? How to sew a shirt? How to drill and process oil to make gasoline? Every level of the internet stack? How to program hardware drivers? How to farm everything you eat? Do you see how stupid what you are saying is yet?
- jamespitts 9y agoI'd argue that we should read the White Paper for any of these technologies before investing in them in their infancy :)
- pfisch 9y agoMaybe. Or a summary from experts. That paper has high level math in it and just isn't going to be comprehended by most people.
- jcoffland 9y agoApparently, you have not read it.
- pfisch 9y ago"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." - totally approachable to the layman I could go on about the summations and other advanced math symbolics in this paper but you seem very out of touch with the knowledge base of most people so I'm not sure it matters.
- ryanobjc 9y agoIs bitcoin in it's infancy? You have CBOE offering futures on it. The prez of JPMC pro bitcoin. You have so many exchanges. This ain't the era of mtgox, $10m pizzas and running your own full bitcoin node and joining a mining pool. Bitcoin is out of it's infancy.
- justrobert 9y agoBitcoin is far from infancy. The futures are a nice touch, but they are cash settled so they will drift from spot. We still do not have a spot market with swaps from companies you can trust. Due to this, negative exposure is still difficult to replicate, hence why some brokers will not offer short side on the futures.
- FabHK 9y ago> The prez of JPMC pro bitcoin. Jamie Dimon, CEO of JP Morgan, famously called Bitcoin "a fraud" that "won't end well" and is "worse than tulip bulbs." You must be thinking of something/someone else? https://www.bloomberg.com/news/articles/2017-09-12/jpmorgan-s-ceo-says-he-d-fire-traders-who-bet-on-fraud-bitcoin https://www.bloomberg.com/news/articles/2017-09-12/jpmorgan-...
- mquander 9y agoSorry, which of those things do you think is not worth learning?
- pfisch 9y agoThey are all worth learning, but no one can know everything. Knowing how something works cannot be a prerequisite to using it. That is one of the purposes of division of labor in society.
- superquest 9y agoFor the average person: none are worth learning
- rublev 9y agoThere are contexts and limitations. I have no practical use to understand my fridge to such a degree because it will yield me nothing in the future. I just need to keep it plugged in, cool, and not broken. All easy to verify. I have control of my money and bitcoin is within the realm of learnability, so I'd say it should be required. It is intimate knowledge of a protocol with many working parts that will have a direct effect on your earnings.
- derefr 9y agoYou don't have to invest in those to use them. You can, for example, use someone else's fridge, without first buying a fridge, and thus learn about the risks and benefits of fridges at no cost to you. A slightly more apples-to-apples comparison: would it make sense for you to become an early investor in a new futures exchange, claiming it'll do "a new kind of futures trading", without having read any papers or textbooks on futures trading?
- leggomylibro 9y agoNo, I don't know how a fridge works. And if you asked me to blindly pick one absent any regulations, I might take the cheap one that spews CFCs. Actually though, the principles behind refrigeration are also refreshingly simple. 1. Compress gas (it heats up as a consequence.) 2. Expose the warm air to the atmosphere (it cools down.) 3. Decompress gas (it cools down even more.) 4. Expose cold gas to the area to cool. 5. Repeat.
- zepolen 9y agoI do. Seriously went over your list expecting to find something I didn't know - but I can explain them all, without needing to look up wikipedia. I may read too much.
- michaelchisari 9y agoIt seems to me, an understanding of financial systems and macroeconomics is much more useful (or at least as useful) in evaluating a currency than the technology behind it. There's plenty of people who understand the blockchain quite well who have a pretty ... imaginative understanding of monetary theory.
- reefoctopus 9y agoCare to share some of your insights, or did you post solely to tell everyone how smart you are?
- michaelchisari 9y agoSure, what do you want to know?
- reefoctopus 9y agoWhat do the people who understand blockchains but not monetary theory get so wrong?
- michaelchisari 9y agoNot all blockchains, but bitcoin specifically. The effect of deflation on the velocity of money is the most obvious. https://en.wikipedia.org/wiki/Velocity_of_money https://en.wikipedia.org/wiki/Velocity_of_money The way bitcoin was approached seemed to ignore the idea that the boom/bust cycle is mitigated through regulation and control. It isn't eliminated, but instead dampened. While economic miracles and bull runs seem great, if they are followed by devastating crashes, the market instability and "whiplash effect" of this occurring in rapid succession can slow attempts at economic recovery at best, and spark revolutions at worst. Austrian economists love the idea of "letting the chips fall where they may", but that reductive thinking ignores the social and political upheaval that the previous centuries have taught us result from instability. The financial safeguards that we've been putting in (and unfortunately removing over the past 30-40 years) are there for a reason.
- wmf 9y agoMost of the information you need to understand to invest in Bitcoin (e.g. the distributed boiler room) is not contained in the white paper at all. Now that people are using Bitcoin as digital gold or digital tulips, one could even argue that the white paper is misleading.
- dabeeeenster 9y agoMy theory is that this paper was written either by the Israelis or the Iranians. Just a hunch. Any takers? Anyone think a single person could be behind it? I personally dont think so...
- tek-cyb-org 9y agoBitocin has been in the works since the 80's. There have been many papers trying to get to the point we are at now so you can say that bitcoin is just version 1.0. Other teams and people (cypherpunks) have been working on this for a while.
- CalChris 9y agoEven further. Bitcoin really stems from Merkle Trees which were patented in 1979 [1]. But most of the ideas are present in Szabo's bitgold [2]. [1] https://www.google.com/patents/US4309569 https://www.google.com/patents/US4309569 [2] https://en.wikipedia.org/wiki/Nick_Szabo#Bit_gold https://en.wikipedia.org/wiki/Nick_Szabo#Bit_gold
- aviv 9y ago“Satoshi Nakamoto”… Samsung and Toshiba together makes —- Satoshi Nakamichi and Motorola together makes —- Nakamoto Seen this one before on reddit somewhere.
- nemothekid 9y agoSatoshi is a regular Japanese name - don’t think it a portamanteu (ex. Director Satoshi Kon)
- marshray 9y agoExcept Samsung is Korean, not Japanese. Hmm, it must be... SANRIO!
- glorkk 9y agoWhy these two governments in particular?
- Frogolocalypse 9y agoIt is also important to understand in technical terms what a 'peer' is in bitcoin. A peer is a node, which is a client that validates all transactions and blocks in the blockchain. It is this understanding which forces people to respect the resource requirements of nodes, because any reduction in nodes is a reduction in peers. Any increase in resources requirements must be carefully planned and implemented to ensure the security of the network is maintained.
- dpkp 9y agoThis seems incorrect. Isn't a node a process on the network that is mining blocks? It does not seem as if a process that simply reads blocks but does not add any hashrate is participating in the network as I understand it.
- stale2002 9y agoThis is a hotly debated point. I don't think there are any Satoshi quotes that definitely prove what he intended. But there are some quotes of him talking about data centers and the like. The miners vs nodes vs blocksize/scaling debate just wasn't a thing that anyone was thinking about back then.
- justrobert 9y agoA node is just a computer that has the whole blockchain. A standard node will almost never produce a single new block. For that, you need custom asic or luck.
- psyc 9y agoNodes can mine, but they don't have to. They participate in validation, which is distinct from mining.
- dpkp 9y agoThat seems inconsistent with the paper. For example, from the conclusion: [Nodes] vote with their CPU power, expressing their acceptance of valid blocks by working on extending them and rejecting invalid blocks by refusing to work on them. Any needed rules and incentives can be enforced with this consensus mechanism. I do see the separate section on "Simplified Payment Verification", which does seem distinct from mining. Is that what you are referring to?
- 2bitencryption 9y agoI love reading papers that solve fundamental, well-known problems. They frequently seem so obvious after-the-fact, like "how did we miss this?" Like, here, stated in just a few pages, is an idea that so many smart people have been chasing after for years. And it's presented so well that it seems intuitive, when in reality it was a very difficult challenge.
- garmaine 9y ago> "how did we miss this?" If anyone is wondering, the answer is that the academics had blinders on in their search for a cryptographic solution to the problem of decentralized transaction ordering, an impossible thing. Satoshi's solution is to accept that impossibility and use economic incentives to achieve eventual consensus instead, and it turns out eventual consensus is good enough.
- nhaehnle 9y agoI doubt that that's the one true answer. If I had been researching the topic at the time, I would have accepted eventual consensus. As somebody who has done research into algorithms, the reason why I would have disregarded Bitcoin's approach is that it's inherently terribly inefficient.
- garmaine 9y agoMany cryptographic protocols are much less efficient. I asserted that only as someone who was in that space an personally knows the people who were doing research on this in the 90’s and 00’s. Nearly all effort was focused on finding a solution that had finality of settlement guarantees. There was also some work on hashcash money, but it made the economically naive and inaccurate assumption that value of the currency must be linked to the cost of production, which is also explicitly not the case in bitcoin.
- eternalban 9y ago> it turns out Reality check: nothing conclusive has been proven yet. IFF we get to the VISA network level of activity, then it has "turned out" to be "good enough".
- superquest 9y agoI didn't read the whitepaper for years because I assumed I wouldn't understand it. When I finally (recently) did I was dumbstruck by its simplicity. This was a big lesson for me: I should always at least try to understand these big ideas even if deep understanding will probably elude me.
- ashleyn 9y agoI think I see where you're coming from here. When I see something typeset with Latex/in the Computer Modern font...the quick assumption I make is that I'm not going to understand a single word of it.
- deleted 9y ago[deleted]
- knight17 9y agoThat is my default assumption too, that I will not get what they are saying. OT: This paper is produced using a wordprocessor; my PDF reader says it is produced by OpenOffice.org 2.4. The word spacing and justification of paragraphs makes me think that this is not LaTeX, nevertheless it looks professional. Tex experts have also come to this conclusion [1]. But is it the original PDF or someone's version/copy of it? [1] : https://tex.stackexchange.com/questions/306754/was-anything-in-satoshi-nakamotos-original-bitcoin-paper-compiled-in-latex https://tex.stackexchange.com/questions/306754/was-anything-...
- computerfriend 9y agoIt's the original. Satoshi used Computer Modern for the headers, which is kind of strange. I guess they wanted to give it the TeX vibe, but didn't want to use LaTeX for some reason. If anyone wants to collaborate on a TeX version, let me know!
- betterunix2 9y agoThere are two sides to that issue. On the one hand, the point of publishing research is to make knowledge available to humanity, so if you are having trouble understanding even the basic premise of a research paper (what problem it is addressing, etc.) then the authors are failing to achieve that goal. On the other hand, if every published paper was written to be accessible for non-experts in the field, papers would become longer and longer over time as lines of research progressed. Unfortunately there is no reward for researchers taking the time to write tutorial and survey papers that give more readable explanations of particular lines of work.
- paulgerhardt 9y agoWell this is an exceptionally cute idea, but there is absolutely no way that anyone is going to have any faith in this currency.
- Frogolocalypse 9y agoReality seems to disagree with you.
- paulgerhardt 9y agohttps://news.ycombinator.com/item?id=599852 https://news.ycombinator.com/item?id=599852
- meri_dian 9y agoBeautiful
- Frogolocalypse 9y agoHaha. That's golden.
- chrisallick 9y agohahahaha
- seibelj 9y agoJust because people think and act like something has value doesn’t mean it does. The only things that have value are what the government, financial institutions, university professors, and HN commenters tell you
- komali2 9y agoThe comment is a duplicate of one of the only 2 comments on the original submission to HN 8 years ago. The other comment hypothesized that bitcoin would end the recession.
- blondie9x 9y agoToo bad the academics who created this technology did not foresee the terrible impact it would have on our planet and the environment.
- komali2 9y agodid you... mean to post that in a bitcoin thread?
- astronautjones 9y agohttps://arstechnica.com/tech-policy/2017/12/bitcoins-insane-energy-consumption-explained/ https://arstechnica.com/tech-policy/2017/12/bitcoins-insane-...
- s0rce 9y agoCould be worse, not as bad as this guy: https://en.wikipedia.org/wiki/Thomas_Midgley_Jr https://en.wikipedia.org/wiki/Thomas_Midgley_Jr.
- joaobatalha 9y agoIt truly is a wonderful paper. Lots of information in it. You don't need that much background knowledge to understand it, but it can take a few reads to wrap your mind around it. I would suggest also taking a look at the annotated version of the whitepaper on Fermat's Library: - https://fermatslibrary.com/s/bitcoin https://fermatslibrary.com/s/bitcoin I wrote some of the annotations and tried as much as possible to make it so that this annotated version would provide a motivated reader with all the resources needed to truly understand the bitcoin protocol. Michael Nielsen's blogpost about Bitcoin (http://www.michaelnielsen.org/ddi/how-the-bitcoin-protocol-actually-works/ http://www.michaelnielsen.org/ddi/how-the-bitcoin-protocol-a...) is also a great read.
- kharms 9y agoWow, thanks for sharing that link to Fermat’s library. What an amazing resource.
- perseusprime11 9y agoWill it ever be possible to use AI/ML to identify Satoshi based on the writing style of this original paper of bitcoin?
- tuxxy 9y agoI think I remember seeing a medium article speculating that the NSA has done this. Found it: https://medium.com/cryptomuse/how-the-nsa-caught-satoshi-nakamoto-868affcef595 https://medium.com/cryptomuse/how-the-nsa-caught-satoshi-nak...
- perseusprime11 9y agoVery interesting!
- dajohnson89 9y agothat'd explain why he's missing
- cyrildorsaz 9y agoIt will never work.
- qsucvatz 9y agoIt's all hinged on SHA-256 and RIPEMD-160 being good cryptographic hashes, and ECC being a good digital signature. Crazy town.
- comboy 9y agoMaybe actually take a look at the paper. SHA-256 could be more broken than SHA-1 and it would still serve perfectly well for mining. If you don't reuse addresses then even if ECDSA is broken then your coins are still safe. And ECDSA being broken is pretty much the darkest scenario. In which case it can simply be replaced with something else starting at specific block. RIPEMD-160 just hides your public key.
- tuxxy 9y agoThis. The FUD surrounding this is built upon a poor understanding of how these algorithms are implemented in Bitcoin.
- tehlike 9y agoThe other scenario is quantum computing, which is even scarier, i think.
- garmaine 9y ago> SHA-256 could be more broken than SHA-1 and it would still serve perfectly well for mining. Sure, but the block header only commits to the double-SHA256 hash tree of transactions. If SHA-2 was broken I could create a single block header that commits to two different valid histories, allowing arbitrary double-spends and irreconcilable divergent views of the network. Not to mention being able to spend anyone's coins by finding alternate pub keys or hashes that collide with their committed p2pkh or p2sh outputs. I'd say that's pretty broken.
- sillysaurus3 9y agoHow can we stop Bitcoin? If Bitcoin wins, we'll become subservient to an algorithm we have no incentive to change. It will only take a few more 10x increases before people stop smiling at this possibility. The time to plan for subverting Bitcoin is now, not later. I'm deeply concerned about the potential of Bitcoin to become a financial black hole. I've written about this twice before: https://news.ycombinator.com/item?id=15867483 https://news.ycombinator.com/item?id=15867483 https://news.ycombinator.com/item?id=15864248 https://news.ycombinator.com/item?id=15864248 The discussion was interesting, but not useful. We need plans, and we need them now, while there may still be time to do something about it. The central question: If the entire resources of all world governments were brought to bear on the task of destroying Bitcoin, what would be the most effective way to do this? I can't think of anything, and no one else has been able to either. Satoshi's email is prescient: http://satoshi.nakamotoinstitute.org/emails/cryptography/4/ http://satoshi.nakamotoinstitute.org/emails/cryptography/4/ -- >[Lengthy exposition of vulnerability of a systm to use-of-force >monopolies ellided.] > >You will not find a solution to political problems in cryptography. Yes, but we can win a major battle in the arms race and gain a new territory of freedom for several years. Governments are good at cutting off the heads of a centrally controlled networks like Napster, but pure P2P networks like Gnutella and Tor seem to be holding their own. Satoshi -- Why should you worry? I've articulated some of the concerns here: https://news.ycombinator.com/item?id=15867841 https://news.ycombinator.com/item?id=15867841 Ultimately, it may be hopeless to try to solve this. But I can't shake the feeling that we're staring at a 0.1% chance of life as we know it changing forever. We will lose all monetary controls. Doomsday prophecies have a long and sordid history, but the dinosaurs only had to look up at the sky at the right time to see theirs approaching. And, like the meteor, Bitcoin keeps growing bigger and brighter. Look at https://i.imgur.com/h0giZzF.jpg https://i.imgur.com/h0giZzF.jpg We won't be able to deal with cases like the 2008 crash. If the basis of the worlds' wealth becomes crypto, what will we do? Madness of Crowds is worth reading: https://vantagepointtrading.com/wp-content/uploads/2010/05/Charles_Mackay-Extraordinary_Popular_Delusions_and_the_Madness_of_Crowds.pdf https://vantagepointtrading.com/wp-content/uploads/2010/05/C... It was now that the frenzy of speculating began to seize upon the nation. Law's bank had effected so much good, that any promises for the future which he thought proper to make were readily believed. The Regent every day conferred new privileges upon the fortunate projector. The bank obtained the monopoly of the sale of tobacco; the sole right of refinage of gold and silver, and was finally erected into the Royal Bank of France. Amid the intoxication of success, both Law and the Regent forgot the maxim so loudly proclaimed by the former, that a banker deserved death who made issues of paper without the necessary funds to provide for them. As soon as the bank, from a private, became a public institution, the Regent caused a fabrication of notes to the amount of one thousand millions of livres. This was the first departure from sound principles, and one for which Law is not justly blameable. While the affairs of the bank were under his control, the issues had never exceeded sixty millions. Whether Law opposed the inordinate increase is not known, but as it took place as soon as the bank was made a royal establishment, it is but fair to lay the blame of the change of system upon the Regent.
- curyous 9y agoBe careful of linking to the whitepaper on the bitcoin.org site, they have contemplated changing it in the past. Best to link to the one on bitcoin.com: https://www.bitcoin.com/bitcoin.pdf https://www.bitcoin.com/bitcoin.pdf
- nikcub 9y agoNice try but no
- Veratyr 9y agoThe content is exactly the same: > curl 'https://www.bitcoin.com/bitcoin.pdf' https://www.bitcoin.com/bitcoin.pdf' | md5 d56d71ecadf2137be09d8b1d35c6c042 > curl https://bitcoin.org/bitcoin.pdf https://bitcoin.org/bitcoin.pdf | md5 d56d71ecadf2137be09d8b1d35c6c042 Of the two organizations, .org seems far more trustworthy. https://www.bitcoin.com/about-us https://www.bitcoin.com/about-us: "Please keep in mind that this is a commercial website" https://bitcoin.org/en/about-us https://bitcoin.org/en/about-us: "Bitcoin.org was originally registered and owned by Bitcoin's first two developers, Satoshi Nakamoto and Martti Malmi. When Nakamoto left the project, he gave ownership of the domain to additional people, separate from the Bitcoin developers, to spread responsibility and prevent any one person or group from easily gaining control over the Bitcoin project."
- ryebit 9y agoSatoshi Nakamoto even disclaimed that bitcoin.com was "unrelated", and that he/she/they registered bitcoin.org as the site they using to publish information. https://bitcointalk.org/index.php?topic=88.msg806#msg806 https://bitcointalk.org/index.php?topic=88.msg806#msg806
- jancsika 9y agoEqually elucidating are the responses on the Cryptography List from other cryptographers[1], plus the responses a few months later when Bitcoin 0.1 was released[2]. You can pretty easily tell which cryptographers read the whitepaper and which ones did not. :) [1]: http://www.metzdowd.com/pipermail/cryptography/2008-October/thread.html http://www.metzdowd.com/pipermail/cryptography/2008-October/... [2]: http://www.metzdowd.com/pipermail/cryptography/2009-January/thread.html http://www.metzdowd.com/pipermail/cryptography/2009-January/...
- Lxr 9y ago> I made the proof-of-work difficulty ridiculously easy to start with, so for a little while in the beginning a typical PC will be able to generate coins in just a few hours. If only I had given up “just a few hours” back in 2009...
- betterunix2 9y ago...and held the coins until today. Or maybe next year it will be worth 10x more. Put another way, if you had sold your desktop and invested all the proceeds in Amazon stock in 1997, and held that stock until now, you would have a 66000% return; basically you would have become a millionaire by now. Of course you would have had to held those shares through two big market crashes and the recessions that followed. On the other hand, how could anyone have known that 20 years ago Amazon was going to be the winner? You might have invested all the proceeds in some company that did not survive the dot-com crash. Likewise, in 2009 most people doubted Bitcoin; even today there is plenty of doubt about the long-term prospects. There is no point in kicking yourself over a failure to invest in a big winner, especially when that winner defies all the wisdom on valuations.
- tCfD 9y agoBrin and Page themselves tried to sell Google to excite.com for less than $1MM in 1997. Luckily for them they got turned down. Hal Finney stopped mining coins after it started overheating his PC too often. Would he have done this if he believed each 50 coin block would someday be worth over half a million bucks? I think that would justify buying a second desktop or perhaps a better cooling fan. Nobody knows what the future fortunes of any venture will be, anyone who claims to have known the future success of Bitcoin all along is lying, or they would have sold their blood and worldly possessions to snag as many coins as humanly possible in anticipation.
- gtrubetskoy 9y agoA bit of trivia: the word(s) "block chain" never mentioned in the paper.
- cyphunk 9y agorest in peace, hal finney
- tait 9y agoI feel like I’ve seen this before. Could it be a repost?
- deleted 9y ago[deleted]
- cryptodogemoon 9y agoSatoshi's mining/minting algorithm is manipulative by design. Less computational energy and the least amount if users produced the most coins (for minimal external capital input). Satoshi could have used a linear curve anticipating network growth matching minting and computational increase, but instead choose to exploit late adopters. Early adopters will attempt to psychologically exploit new users by selling their asset for more than the cost of production and acquisition. This has directly created the situation where utility is not in use but in exploitation of passing the hot potato to greater fools. ecash should not exploit new users.
- cyphunk 9y agodo you have examples of any cryptocurrencies that introduce such a curve. the centralization of wealth problem is serious.
- shripadk 9y agoIt still baffles me that the Nobel Prize for Economics was not awarded to Satoshi Nakamoto albeit a pseudonym for real person/people.
- garmaine 9y agoThere's not any new economics in bitcoin...
- shripadk 9y agoCan you point me to any paper (other than the Satoshi paper) that describes an immutable distributed ledger and it's implementation? If there was no new economics in Bitcoin, can you explain why the paper would be nominated for Nobel Prize for Economics in the first place? https://bitcoinmagazine.com/articles/satoshi-nakamoto-nominated-for-the-nobel-prize-in-economics-1447088488/ https://bitcoinmagazine.com/articles/satoshi-nakamoto-nomina... It's quite clear that the nomination was rejected on flimsy grounds of not awarding the Prize for "unknown people" because there is no such "precedence".
- amarkov 9y ago"Look at my great new financial product!" just isn't that interesting from a theoretical perspective, even if it really is cool and innovative. Knowing how to implement an immutable distributed ledger won't help you understand anything about the economy on its own.
- Asdfbla 9y agoNot that creating Bitcoin wasn't an achievement, but it built upon heaps of existing systems that explored proof of work, distributed ledgers and so on. The main innovation was the combination of ledgers with proof of work to prevent Sybil attacks in the face of a system with unidentified participants.
- garmaine 9y agoThose are computer science advances. The nobel prize for economics about economics, not comp sci. There isn’t new economic theory in bitcoin.
- martin1975 9y agoNice work, David Chaum!
- jacquesm 9y agoIf David Chaum were to release something like bitcoin it would only be after filing a few hundred patents, re-working it every time just before release and making partnerships with every commercial entity under the sun.
- cwyers 9y agoThe document is littered with references to CPUs, including the phrase "one CPU one vote." I think a Bitcoin where CPUs were doing the blockchain processing would be much different that the current one dominated by farms of dedicated hardware. I don't know if it would be better, but I think this is a pretty stark reminder that Bitcoin is not behaving as intended.
- the_real_sparky 9y agoThis has turned into an interesting question since some coins now are specifically designed to be resistant to ASICs. The downside for those coins is that botnets or general purpose hardware (that can be purchased or rented for an attack and then resold for other uses later) are a serious threat to the network. A potential benefit for Bitcoin is that the network may actually be more secure with custom ASICS because the people investing millions into developing the custom hardware stand to lose everything if they attack or seriously harm the network. That equipment would be useless for any other purpose, and that same dominating hardware makes the Bitcoin network immune to attack from general purpose hardware.
- cwyers 9y agoIf you need a relatively small handful of people to control the ecosystem to make it secure from large numbers of decentralized users, then what the heck do you need Bitcoin for?
- the_real_sparky 9y agoI think that the mistake here is believing that the miners control the network, when most likely the miners simply work for the decentralized network. When the miners become centralized there is little they can do that the users/nodes can’t unwind with a software update, even up to the point of firing those miners completely if necessary (changing the proof of work so that their current hardware is worthless). I think that long-term the incentives are aligned for them to simply do their job.
- scottnyc 9y agoI view this paper with both love and hate. I think it's technically brilliant and fascinating, and at the same time incredibly naive and will do far more harm than good in this world. While a trust free payment mechanism sounds wonderful, this implementation cannot succeed in the real world. In my mind proof-of-work is already an ecological disaster. As long as the price of bitcoin goes up, there is an incentive for miners to commit more energy and resources - yet those resources do not increase productivity. Whether there is 1 transaction or 200k, Megawatts are wasted to mine that block. I doubt 99% of people getting into Bitcoin have a remote understanding of how this works. This concerns me far more than the threat of upending governments - my biggest fear is in fact that governments will instead choose to adopt this technology because they would love the ability to track the history of every transaction. While there are several proposed solutions to many of bitcoins weaknesses, we live in the real world, and the real world goes where the money is. While bitcoin is decentralized in design, in reality, it is controlled by a few mining factions who ultimately control what code enhancements get adopted and how the game is played. Why would they want to increase the block-size, when a smaller block will lead to greater fees? Running a full node is getting expensive, and soon, only the deep pockets will be left to guard. People will never get bitcoin. It's simply too confusing for the average person. The user experience is a disaster. You're telling me once I buy bitcoin, I'm supposed to transfer it to a hardware wallet? What's a hardware wallet? Wait, so if I accidentally am off by one character in the address I sent money too it's gone forever? There's no one I can call? Bitcoin should never have been any more than just a novelty for the technically inclined, or a technology used for something other than a currency. It's why I can't stand Coinbase - they are lining up the naive (and greedy) masses into the slaughterhouse. I have non-technical friends who do not understand that their bitcoin is not backed by anything. They do not understand that the money they put in, was immediately taken out by someone else, and that the price of bitcoin is just a funny number. The $XXX billion dollar market cap is fiction. Owning a bitcoin does not give you claim to the output of some productive asset like a stock would. Unfortunately, history tells us we're in the early innings. The real dumb money is just getting in the door. But when the music stops, and the evangelists have squeezed enough out of this lemon, that funny number will go back to zero. And a lot of people who couldn't afford it will get really hurt. I'm confident that I could be making a killing in bitcoin right now. But it's not about the money for me - my conscience just keeps saying stay away. I really hope either I've completely got it wrong or bitcoin just dies soon.
- apo 9y agoThis paper packs an enormous idea into a tiny package. It's worth reading - and re-reading. If you've studied electronic cash systems and/or cryptographic systems before, the paper is quite easy to read. Otherwise it's a challenge. At least that's what I found. Here's a companion article that fills in some of the blanks. https://bitzuma.com/posts/how-bitcoin-works/ https://bitzuma.com/posts/how-bitcoin-works/
- the_real_sparky 9y agoI’d be interested in everyone else’s opinion about the odds that Bitcoin becomes an asset class to rival gold (say at least $2T market cap vs the $8T gold currently is). Right now I’m guessing 20%. Those odds still make the current price a positive expected value (since the 1/5 future has such a handsome payoff), but with a 4/5 chance of failure it wouldn’t be very smart to do this with more than a few percent of net worth. Thoughts?
- m3kw9 9y agoI still don’t get how if I start trying a proof of work, and someone faster than me finishes the same proof of Work first, I would never mine a single bitcoin? Is that even the right question?
- dan_mctree 9y agoThere's no continuous project you're working on. It's just getting a lot of chances of winning the lottery. If someone finishes before you, you just slightly alter the number you're searching for and continue on. You're also not really working towards the same thing. Your solution probably includes you sending the blockreward to yourself and their solution includes them sending it to themselves too, on top of that you may also choose other secondary transactions. The chosen transactions influence the number you need to find. It does happen that two blocks are found at nearly the same time, before adjustments can be made. In those cases one of the two ends up getting 'orphaned', it's relatively rare compared to normal blocks though.
- improv32 9y agoMore hashpower inceeases the likelihood that your find your block before the other guy, but the PoW is stateless, there's no "progress" made u til you find the solution, it's purely random each time you increment the nonce and try a new hash, thus expected rewards follow a poisson distribution.
- tromp 9y agoWhile they may be faster, you will occasionally be luckier, and find it first.
- FabHK 9y ago> someone faster than me finishes the same proof of Work first, I would never mine a single bitcoin? That's right. Now, probabilistically, you'd occasionally get lucky and get the full (big) mining reward, in proportion to your fraction of total hash power. The alternative is that you join a mining pool, and then receive the same amount (in expectation), minus the pool fee, but with much smaller variance, as the larger pool will much more frequently get lucky and then distribute the reward (minus the pool fee) to the contributors in proportion to their hash power. But either way, your expected reward will be approximately the same, whether or not you work in a pool (modulo the pool fee), it's just whether you get a large amount very rarely or a small amount very often.
- zerostar07 9y agothis will never work
- pimmen 9y agoThe white paper is very approachable, and Bitcoins is a technical marvel. My big problem with Bitcoins has nothing to do with blockchains, trust or even security. All of that looks great. My problem with Bitcoin is simply that it’s a deflationary currency, and can only ever be a deflationary currency. Prove me wrong by spending, lending or investing your Bitcoins.
- jeandejean 9y agoIf only it could have stayed a great idea instead of becoming a huge carbon emitter fueled by people naked greed...
- hug0 9y agoSurely, if 1000 people own 40% of a currency which had evangelical aims to service 7.5 billion people, then it is impossible to call it decentralised... Add this to the obvious fact that the vast majority of new bitcoins mined are from china, which due to the scale of processing power now has a monopoly due to capital barriers. The conclusion is... great experiment, but as in all deliberate implementations of social ,political, or economic theory. The real world is a very different beast to one man's view from a desk. I feel sorry for any new uneducated investors getting in now. This has become nothing more than a pyramid scheme that adds no value whatsoever to the world. Not cryptocurrency as an idea, but bitcoin's current iteration and implementation.
- FreeRadical 9y agoThat 1000 number likely includes many exchange wallets
- pcdinh 9y ago> Surely, if 1000 people own 40% of a currency which had evangelical aims to service 7.5 billion people, then it is impossible to call it decentralised Haha. Where do you get that? If a random guy says you so, don't believe in him.
- hug0 9y agohttps://www.bloomberg.com/news/articles/2017-12-08/the-bitcoin-whales-1-000-people-who-own-40-percent-of-the-market https://www.bloomberg.com/news/articles/2017-12-08/the-bitco...
- ftlio 9y agoThe white paper doesn't discuss wealth distribution at all. Bitcoin is a critique of money involving trust in entities not party to a transaction, and not much else. Where this leads us as far as far as wealth distribution goes is potentially interesting, but was never evangelized by the white paper or the community that built it. The idea that money should be distributed more broadly than 1000 people controlling 40% of it sounds really nice, but it is missing the level of formalism that Bitcoin brings to the question of money.
- bitcoin2017 9y agoKeep in mind that the 'bitcoin.org' is now controlled by infamous 'Theymos', who is known for the 7000BTC scam and became anti-Bitcoin since 2014. So it's highly risky to cite Bitcoin White Paper from this site, if you wanna read untampered version.
- fartnuggs 9y agoBitcoin Cash follows this paper much more to a tee than Segwit Coin. Back to low fees, on chain scaling, and the future of p2p cash!
- fartnuggs 9y agoHats off to CSW/Kleiman/?/Finney for what they did. They opened pandoras box. No going back now.
- DavidShares 9y agoOP should probably link to another source for the original Bitcoin white paper, for example https://bitcoin.com/bitcoin.pdf https://bitcoin.com/bitcoin.pdf The reason being is that the owners of Bitcoin.org are actively trying to rewrite the white paper even against the larger community’s wishes. I believe sometime in the near future the owners will go ahead with their plans anyways as they seem to do that when it comes to other issues too. Ref: https://github.com/bitcoin-dot-org/bitcoin.org/issues/1904#issuecomment-342973983 https://github.com/bitcoin-dot-org/bitcoin.org/issues/1904#i... https://github.com/bitcoin-dot-org/bitcoin.org/issues/1325 https://github.com/bitcoin-dot-org/bitcoin.org/issues/1325
- statoshi 9y agoThe linked whitepaper is the original, which is what matters for the purpose of this post.
- polock 9y agoPaper which is changing the world. Beautiful indeed.