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Bitcoin P2P e-cash paper

2008-11-01 Thread Satoshi Nakamoto

I've been working on a new electronic cash system that's fully

peer-to-peer, with no trusted third party.

The paper is available at:

http://www.bitcoin.org/bitcoin.pdf

The main properties:

Double-spending is prevented with a peer-to-peer network.

No mint or other trusted parties.

Participants can be anonymous.

New coins are made from Hashcash style proof-of-work.

The proof-of-work for new coin generation also powers the

network to prevent double-spending.

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 the burdens of going through a financial institution.

Digital signatures provide part of the solution, but the main

benefits are lost if a trusted 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 honest nodes control

the most CPU power on the network, they can generate the longest

chain and outpace any attackers. The network itself requires

minimal structure. Messages are broadcasted 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.