Bitcoin

Bitcoin

Bitcoin is a cryptocurrency and a digital payment system invented by an unknown programmer, or a group of programmers, under the name Satoshi Nakamoto. It was released as open-source software in 2009.

All edits by  Alex Dean 

Edits on 29 Jun, 2018
Alex Dean
Alex Dean edited on 29 Jun, 2018
Infobox
Founder
Satoshi Nakamoto
Alex Dean"Fixing up the public key cryptography section"
Alex Dean edited on 29 Jun, 2018
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Control of the Bitcoin currency BTC is governed by a pair of cryptographic digital keys known as the public and private keys. The public key is open to the public and can be used to create a unique Bitcoin Address where individuals may receive funds. The private key represents control and ownership over BTC as only thethese ownerfunds ofenabling the private key is ableholder to produce a valid digital signature initiatingwhich is essential for the transfer of bitcoins. Private keys are chosen at random from numbers between 1 and 2^256. Public keys are generated utilizing an elliptic-curve cryptography based multiplication of the private key, from which it is practically impossible to reverse engineer the private key without trying all 2^256 possible values. Private keys can be kept in an encrypted for in a keystore file. in order to Finally, a Bitcoin address is created from a double hashing of the public key along with a base58 encoding. The Bitcoin address is a public string of 34 numbers and letters which anyone can send bitcoins to.

Private keys are a number chosen at random from numbers between 1 and 2^256. The method used to generate this random number must not be reproducible by another party or the security of the key could be compromised. Good sources of entropy include the getnewaddress command on the Bitcoin Core client or flipping a coin. Pseudorandom methods, which appear to produce randomness but are created by a deterministic algorithm which can be reproduced and are not appropriate for private key generation.

Public keys are generated utilizing an elliptic-curve cryptography based multiplication of the private key. It is practically impossible to reverse engineer the private key from the public key without trying all 2^256 possible values. Finally, the Bitcoin address is created from by performing a one-way cryptographic hashing. The SHA256 hash is used on the public key, followed by a RIPEMD160 hash and then a base58 encoding. This outputs the Bitcoin address itself, which is a string of 34 numbers and letters which can safely be made available to the public. Anyone can send Bitcoin directly to this public Bitcoin Address.

Edits on 26 Jun, 2018
Alex Dean
Alex Dean edited on 26 Jun, 2018
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Besides being obtained by proof-of-work (PoW) "mining", bitcoins can be exchanged for other currencies, products, and services (legal or illegal ones).

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The creation & validation of transactions on the Bitcoin blockchain, along with the appending of these transactions to the Bitcoin blockchain, is the core feature of the Bitcoin network and most cryptocurrency in general. Transactions are created by the owner of of the bitcoins, who generate a specific digital signature using the private keys to create a valid transaction. Any transaction broadcast to the network without a valid digital signature will not be validated and propagated by the honest nodes in the network and will fail to be includedadded into the blockchain. All transactions in the Bitcoin blockchain are globally and publicly visible.

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The record of ownership on the blockchain is based on unspent transaction outputs (UTXOs).

The Bitcoin transaction system is based on the unspent transaction outputs (UTXOs) model. A new UTXO is created each time a transaction is created in a new Bitcoin block with a new output. The UTXO is eliminated when the owner of the keys initiates a transaction which empties all of the Bitcoin.

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Security

There are a variety of assumptions made by the Bitcoin protocol with regards to transaction security and validity. The double spend attack or majority attack is possible when the attacker controls a larger portion of the mining power in the network, most effective at >50%. To date, no double spending attacks have occurred on Bitcoin, however multiple attacks on smaller chains such as Bitcoin Gold, Zencash, monacoin, and others have been successful. During the time that the attack controls this ability they are able to reverse specific arbitrary transactions by re-mining blocks with those transactions excluded. Thus cryptocurrency exchanges and others who accept large Bitcoin transactions typically wait for additional confirmation of blocks before relying on payment, as the cost to rewrite a transaction becomes larger the further back in the blockchain history it lies. The economic incentives for whether or not miners will benefit from attacking the network through a double spend rely on a number of factors and are actively debated.

In addition to the majority attack, there are lower thresholds of mining power required potentially only 33% of the network has rate to to perform other attacks such as selfish mining.

Infobox
Related Topics
Edits on 25 Jun, 2018
Alex Dean"Adding satoshi nakamoto as bitcoin founder"
Alex Dean edited on 25 Jun, 2018
Infobox
Founder
Satoshi Nakamoto
Edits on 6 Apr, 2018
Alex Dean"Fix hanging caption"
Alex Dean edited on 6 Apr, 2018
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Timeline

FBI seizes and shuts down the online black market called the Silk RoadNotice placed on the Silk Road domain after Ross

Alex Dean
Alex Dean edited on 6 Apr, 2018
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FBI seizes and shuts down the online black market called the Silk RoadNotice placed on the Silk Road domain after Ross

Notice placed on the Silk Road domain after Ross
Edits on 20 Mar, 2018
Alex Dean"second occurrence of blockchain crosslink"
Alex Dean edited on 20 Mar, 2018
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Pioneering work on digital currencies prior to bitcoin was done by David Chaum, who published on blind signatures as the basis for untraceable electronic cash and mail throughout the 1980’s. Wei Dai proposed B-money in 1998, which contained the idea of generation of money through the solving of computational puzzles as well novel methods for reaching consensus among network participants. Adam Back introduced the HashcashHashcash algorithm. Hal Finney later utilized Back’s hashcash when he introduced a reproducible proof of work (RPOW) token in 2005. Nick Szabo proposed Bit gold in 2008, a digital currency which utilizes a proof of work puzzle that is securely timestamped and contains links between transactions.

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The creation & validation of transactions on the Bitcoin blockchain, along with the appending of these transactions to the Bitcoin blockchainblockchain, is the core feature of the Bitcoin network and cryptocurrency. Transactions are created by the owner of of the bitcoins, who generate a specific digital signature using the private keys to create a valid transaction. Any transaction broadcast to the network without a valid digital signature will not be validated by the network and will fail to be included in the blockchain.

Edits on 12 Mar, 2018
Alex Dean
Alex Dean edited on 12 Mar, 2018
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Further reading (+5 rows) (+14 cells) (+420 characters)
Documentaries, videos and podcasts (+1 rows) (+3 cells) (+104 characters)
Further reading

Author
Title
Link

Arvind Narayanan and Jeremy Clark

Bitcoin’s academic pedigree

https://queue.acm.org/detail.cfm?id=3136559

Elad Gil

Bitcoin network effects

http://blog.eladgil.com/2017/12/bitcoin-network-effects_11.html

Marc Andreessen

Why bitcoin matters

https://dealbook.nytimes.com/2014/01/21/why-bitcoin-matters/

Michael Nielsen

How the bitcoin protocol actually works

http://www.michaelnielsen.org/ddi/how-the-bitcoin-protocol-actually-works/

Documentaries, videos and podcasts

Title
Date
Link

The importance of layer two — an HTTP of bitcoin and blockchains

Aug 11, 2017

https://youtu.be/3PcR4HWJnkY

Alex Dean
Alex Dean edited on 12 Mar, 2018
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Documentaries, videos and podcasts

Title
Date
Link

Ever wonder how bitcoin (and other cryptocurrencies) actually work?

Jul 7, 2017

https://youtu.be/bBC-nXj3Ng4

Edits on 8 Mar, 2018
Alex Dean
Alex Dean edited on 8 Mar, 2018
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On October 31st 2008, an individual or group of individuals under the pseudonym Satoshi Nakamoto published the bitcoin whitepaper called “Bitcoin: A Peer-to-Peer Electronic Cash System". The open source code for bitcoin was released on January 9, 2009. The identity of Satoshi Nakamoto remains unknown, however they are thought to retain the largest known bitcoin wallet containing approximately 1 million bitcoins. No bitcoins have ever been transferred from this account to date.

Alex Dean"updating broken link"
Alex Dean edited on 8 Mar, 2018
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Further reading (+69/-184 characters)
Further reading

Author
Title
Link

Andreas M. Antonopoulos

Mastering Bitcoin

Alex Dean
Alex Dean edited on 8 Mar, 2018
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Companies

Company
CEO
Location
Services

Alex Dean
Alex Dean edited on 8 Mar, 2018
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CBOE launched Bitcoin futures trading on December 10, 2017. After experiencing a surge in price almost immediately the exchange halted trading for two minutes due to the volatility. CME group announced on October 31, 2017 that it intends to launch bitcoin futures in the fourth quarter of 2017. The futures will be based on the CME Bitcoin Reference Rate and will be cash settled.

CME group announced on October 31, 2017 that it intends to launch bitcoin futures in the fourth quarter of 2017. The futures will be based on the CME Bitcoin Reference Rate and will be cash settled.

Alex Dean"Adding in citations."
Alex Dean edited on 8 Mar, 2018
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Article (+81/-139 characters)
Article

Pioneering work on digital currencies prior to bitcoin was done by David Chaum, who published on blind signatures as the basis for untraceable electronic cash and mail throughout the 1980’s. Wei Dai proposed B-money proposed by Wei Dai in 1998, which contained the idea of generation of money through the solving of computational puzzles as well a methodnovel methods for enforcingreaching consensus among distributednetwork participants. Adam Back introduced the Hashcash algorithm. Hal Finney later extendedutilized Back’s hashcash when he introduced a reproducible proof of work (RPOW) token in 2005. Nick Szabo proposed Bit gold in 2008, a digital currency which many consider the closest precursor to bitcoin. Bit gold described currency which utilizes a proof of work puzzle that is securely timestamped and contains links between transactions.

...

On October 31st 2008, an individual or group of individuals under the pseudonym Satoshi Nakamoto published the bitcoin whitepaper called “Bitcoin: A Peer-to-Peer Electronic Cash System”. The open source code for bitcoin was released on January 9, 2009. The identity of Satoshi Nakamoto remains unknown, however they are thought to retain the largest known bitcoin wallet containing approximately 1 million bitcoins. No bitcoins have ever been transferred from this account to date.

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Academic papers (+1 rows) (+3 cells) (+159 characters)
Academic papers

Author
Title
Link

Christian Decker, Roger Wattenhofer

Information Propagation in the Bitcoin Network

https://pdfs.semanticscholar.org/deb1/c04f3584a59b489e9582b244c10c7f9b20cf.pdf

Alex Dean
Alex Dean edited on 20 Feb, 2018
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Further reading (+1 rows) (+3 cells) (+93 characters)
Further reading

Author
Title
Link

Satoshi Nakamoto

Bitcoin: A Peer-to-Peer Electronic Cash System

https://bitcoin.org/bitcoin.pdf

Edits on 12 Dec, 2017
Alex Dean"added to bitcoin timeline"
Alex Dean edited on 12 Dec, 2017
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Article (+380/-387 characters)
Article

CBOE launched Bitcoin futures trading on December 10, 2017. After experiencing a surge in price almost immediately the exchange halted trading for two minutes due to the volatility.

CME group announced on October 31, 2017 that it intends to launch bitcoin futures in the fourth quarter of 2017. The futures will be based on the CME Bitcoin Reference Rate and will be cash settled.

...

Futures

CBOE launched Bitcoin futures trading on December 10, 2017. After experiencing a surge in price almost immediately the exchange halted trading for two minutes due to the volatility.

CME group announced on October 31, 2017 that it intends to launch bitcoin futures in the fourth quarter of 2017. The futures will be based on the CME Bitcoin Reference Rate and will be cash settled.

Timeline

Bitcoin whitepaper abstract

The bitcoinBitcoin genesis block is mined

Times of London headline referenced by the Bitcoin genesis block

The first block of a blockchain is known as the genesis block. Bitcoin's genesis block contains this message from the UKTimes timesof London newspaper headline "03/Jan/2009 Chancellor on brink of second bailout for banks". This note proves that the block was created after January 3, 2009 and is also likely a commentary on the instability of the financial system at that time.

Bitcoin futures start trading

The Chicago Board Options Exchange (CBOE) launches Bitcoin futures trading, enabling investors to speculate on the price of BTC without actually owning Bitcoins themselves. After experiencing a surge in price almost immediately the exchange halted trading for two minutes due to the volatility.

Bitcoin Gold (BTG) forks from Bitcoin (BTC)

The Bitcoin Gold forks on block 491406 from the Bitcoin network.

The Bitcoin network forks into Bitcoin (BTC) and Bitcoin cash (BCH)

The controversial hardfork of Bitcoin and Bitcoin Cash into two separate blockchains occurs on block 478558. The split results from an inability of the Bitcoin community to resolve debates over a proposed increase to the 1megabyte limit on the maximum block size. Bitcoin Cash increases the block limit to 8MB and removes segregated witness.

Bitcoin and Bitcoin cash blockchain forks

Bulgarian officials seize 213,519 bitcoins worth more than their national debt

The bitcoins are seized from a criminal group. The rapidly growing price of BTC makes the estimated value of those Bitcoins approximately $3.3 billion dollars on Dec 7, 2017, more than Bulgaria's annual national debt.

WannaCry ransomeware attack

The WannaCry ransomware attack cryptoworm infects computers worldwide. Payment in Bitcoin is required in order to restored data encrypted by the attack. Marcus Hitchins discovered a kill switch that shut down the software before it executes simply by registering a specific domain.

The Bitcoin network hash rate exceeds 1 Exa hash per second

The Bitcoin network exceeds 1 Exa Hash/s, making the Bitcoin network around 300 times more powerful than the worlds fastest supercomputer at the time tianhe-2.

Coinbase raises record $75M funding round for its bitcoin exchange

The round includes notable investors such as Andreessen Horowitz, Tim Draper, Union Square Ventures, and others.

FBI seizes and shuts down the online black market called the Silk Road

Notice placed on the Silk Road domain after Ross

The Silk Road, an online marketplace best known for selling illegal materials like drugs, is shut down by the BI. The operation to catch the owner of Silk road named Ross William Ulbricht, using the pseudonym Dead Pirate Roberts, is called Operation Onymous. The FBI seized approximately 26k BTC from the Silk Road.

Winklevoss file proposal for Bitcoin exchange traded fund (ETF)

The proposal is for an ETF, usually a basket of stocks or commodities, which would hold Bitcoins.

Bitcoin foundation is launched

The Bitcoin Foundation is a nonprofit corporation launched to accelerate the development of the open source protocol. Board members at the initial founding include Gavin Andresen, Mark Karpeles, Charlie Shrem

MtGox changes ownership

Jed McCaleb sells MtGox to Mark Karpeles, which was the largest Bitcoin exchange at the time.

MtGox Bitcoin exchange is created

The MtGox bitcoin currency exchange market is established by Jed McCaleb. He had previously used the domain for a Magic: The Gathering Online eXchange project which was abandoned.

In first real world transaction, 10k BTC is exchanged for 2 large pizzas

Laszlo Hanyecz posts proof of pizzas he received for 10k BTC

A Jacksonville, Florida programmer Laszlo Hanyecz pays 10,000 bitcoins for 2 large pizzas, making the request via a bitcoin talk forum post. May 22nd is now celebrated as Bitcoin Pizza Day

Edits on 11 Dec, 2017
Alex Dean
Alex Dean edited on 11 Dec, 2017
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Timeline (+5 events) (+1127 characters)
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Categories
Timeline

Hal Finney receives the first Bitcoin transaction from Satoshi Nakamoto

The first Bitcoin transaction is sent to Hal Finney in block 170, who downloaded the Bitcoin release on the first day it was available.

Bitcoin code is released

The first release of Bitcoin called version 0.1 is distributed on a cypherpunk mailing list.

The bitcoin genesis block is mined

The first block of a blockchain is known as the genesis block. Bitcoin's genesis block contains this message from the UK times newspaper headline "03/Jan/2009 Chancellor on brink of second bailout for banks". This note proves that the block was created after January 3, 2009 and is also likely a commentary on the instability of the financial system at that time.

Bitcoin code pre-release

The Bitcoin source code pre-release is made available to the public for the first time.

Bitcoin: A Peer-to-Peer Electronic Cash System

The bitcoin whitepaper is published under the pseudonym Satoshi Nakamoto. The whitepaper lays out in detail the framework for bitcoin, the first decentralized digital currency requiring no trusted third party that solves the double-spend problem.

Alex Dean
Alex Dean edited on 11 Dec, 2017
Edits made to:
Article (+181 characters)
Further reading (+1 rows) (+3 cells) (+194 characters)
Article

CBOE launched Bitcoin futures trading on December 10, 2017. After experiencing a surge in price almost immediately the exchange halted trading for two minutes due to the volatility.

Further reading

Author
Title
Link

Alexander Osipovich and Gabriel T. Rubin

U.S. Bitcoin Futures Climb in First Day of Trade

https://www.wsj.com/articles/bitcoin-futures-launch-stokes-fears-of-manipulation-hacks-glitches-1512907201

Edits on 1 Dec, 2017
Alex Dean
Alex Dean edited on 1 Dec, 2017
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Description (+14/-14 characters)
Topic thumbnail

Bitcoin

Bitcoin is a cryptocurrencycryptocurrency and a digital payment system invented by an unknown programmer, or a group of programmers, under the name Satoshi Nakamoto. It was released as open-source software in 2009.

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