Bitcoin Nathan Kistler CST300L Fall 2012

What is Bitcoin? Digital Currency Anonymous Secure

The purpose of Bitcoin Provide a currency free from centralized control Facilitate online commerce Allow for anonymous transactions

History of digital currency Credit card transactions require third party management and reveal a customer's identity Cypherpunks o Affect political change using cryptography o Jim Bell - Assassination Politics

History of digital currency b-money o Noncommercial prototype Bitgold o Scarce digital resources can have value DigiCash o Prevent counterfeiting by using a trusted central authority WoW Gold, Linden Dollars o Digital currency to buy digital goods

History of Bitcoin Proposed 1998 in paper by an individual using the pseudonym Satoshi Nakamoto Spawned from the cypherpunk movement First version available in 2009

How Bitcoin works Uses publically viewable leger to verify transactions Peer to Peer network o Eliminates centralized control o Peers verify transaction chain by reaching consensus Use of cryptography o Keep users anonymous o Prevent counterfeiting Open source o Users demand transparency

How Bitcoin works Bitcoin Miner generates new currency at the same rate as a geometric series Total amount of currency is capped Users have Bitcoin "wallet" Each Bitcoin has a unique address and associated denomination

How Bitcoin works Bitcoin Miner generates new currency at the same rate as a geometric series Total amount of currency is capped Users have Bitcoin "wallet" Each Bitcoin has a unique address and associated denomination About Bitcoin

Potential issues Security vulnerabilities Lack of acceptance Theft

What Bitcoin could do Reduce the power of government authority o Difficult to collect taxes o Bypass laws and regulations o Allow interest groups to act without interference o Replace government issued currencies Make targeted advertising more difficult o Disrupt business plans for many websites Exchange Bitcoins for other types of currency

References bitcoin.org staff (November 2012). About Bitcoin. Retrieved from blockchain.info (December 2012). Bitcoin Block Explorer. Retrieved from Jim Bell (February 1996). Assassination Politics. Retrieved from mtgox.com (December 2012). Bitcoin Exchange. Retrieved from Satoshi Nakamoto (2008). Bitcoin: A Peer-to-Peer Electronic Cash System. Retrieved from paysius.com staff (November 2012). How it Works. Retrieved from Morgen E. Peck (June 2012). Bitcoin: The Cryptoanarchist's Answer to Cash. Retrieved from cryptoanarchists-answer-to-cash/0 Morgen E. Peck (October 2011). The World's First Bitcoin Conference. Retrieved from conference Benjamin Wallace (November 23, 2011). The Rise and Fall of Bitcoin. Retrieved from weusecoins.com staff (May 22, 2011). What is Bitcoin? Retrieved from weusecoins.com staff (December 2012). Top Questions. Retrieved from