The Bitcoin White Paper: the Abstract…
Here’s a look at the founding document of Bitcoin broken up into each of its parts. It is called “The Bitcoin White Paper”.
It starts with the title, the author, and a date. Then there’s the first paragraph called the Abstract which summarizes the entire white paper. I’ll break up and analyze this first paragraph.
“Bitcoin: A Peer-to-Peer Electronic Cash SystemSatoshi Nakamoto
October 31, 2008″
The title gives the name to the entire system that is proposed. A “Peer-to-Peer” system is something that had already been in use in things like BitTorrent. BitTorrent had been around since 2001 and works as a way to share files between individual peers, for example: personal computers. The author sees it as an electronic cash system. Many attempts at electronic cash had failed previously because they were centralized. This would be decentralized.
The author is Satoshi Nakamoto. Satoshi remains a mystery. They could be one person or a group. We only know Satoshi through their online postings, and through creating and initiating the Bitcoin network. This white paper came on October 31, 2008. Halloween! Bitcoin’s color became orange like a pumpkin you’d find during Halloween. Bitcoin would be released just over two months later, on January 9, 2009.
“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.”
This is how Bitcoin is revolutionary. This is electronic money that doesn’t require a centralized institution. The network prevents users from spending their bitcoin in more than one place.
“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.”
I just realized that “Satoshi” uses the word “We” here, as if Satoshi is a group of people. Perhaps they meant it in terms of a group effort amongst those working on digital cash. But peer-to-peer and proof-of-work are key elements to solving the double-spend problem.
“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.
Satoshi lays out how the Bitcoin network stays secure.
“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.”
Satoshi summarizes what Bitcoin is about in one paragraph! This lays out the unique solution to the double-spend problem plaguing all digital cash since 1989 when DigiCash was created.
Thanks to the Nakamoto Institute for making the whitepaper available freely via an Attribution-ShareAlike 4.0 International (CC BY-SA 4.0) license. More info on that here: https://creativecommons.org/licenses/by-sa/4.0/
Source: https://nakamotoinstitute.org/bitcoin/