History
In 2008, Satoshi Nakamoto, a developer three generations removed from the creator of bitcoin, published a bitcoin whitepaper, defining the system and the associated protocol. The Whitepaper predicted that in its first few years, bitcoin would enable a "new electronic cash system". Within a few months of publication, the bitcoin network was launched on January 3, 2009.[3]
Though Nakamoto designed the protocol, he never designed any hardware;[6] other developers have designed mining hardware and released it as open-source hardware projects.
Satoshi created a proof-of-work system, which aimed to solve one of the most well-known problems of digital cash, namely double-spending. The protocol provides proof of the existence of a transaction and that it is not modified since it was produced, while allowing the user to maintain ownership of the asset.
Bitcoin allows the flow of money to be anonymous and untraceable. At the same time, the generation and network is public. Other technologies based on cryptography or the blockchain may allow a kind of "privacy by design".[31]
Comparisons
The earliest examples of peer-to-peer network cryptocurrencies with "mining" functionality were the Internet currency system Bittit and the Internet currency system DigiCash, which were developed in the 1990s.: 230 Bitcoin was not developed as a competitor to these systems, but rather as a technological improvement and revolution of the existing Internet:
Security
The typical transaction in the bitcoin blockchain is a digitally signed message, in which the sender proves knowledge of a private key, by calculating a hash of the message using a one-way function. The recipient verifies the signature using the sender's public key. This allows the payee to ensure that the funds were sent by the claimed sender.
No user knows the private key corresponding to another user's public key, and no user can produce a valid signature for a message not intended for him. This prevents an attacker from forging signatures and from spending the funds of a payee or payer, no matter what collusion is done between the attacker and the payee or payer.
To further enhance security, bitcoin addresses verify that they receive only one of the possible Bitcoin transactions. For this purpose, the script used to create the addresses is a Merkle branch, which is a simple way to prove that the receiving address corresponds to a certain transaction. This feature makes forgery of addresses very