Bitcoin Wiki - User contributions [en]

Wallet

2014-05-14T18:02:47Z

Benbest: /* Bitcoin Qt */ wikilink

A Bitcoin '''wallet''' is a file that contains a collection of private keys.

=== Bitcoin Qt ===

The original Bitcoin [[Clients|client]] wallet file is named '''wallet.dat''' and contains<ref>[https://bitcointalk.org/index.php?topic=4448.0 Wallet import/export: bitkeys format]</ref>:

* keypairs for each of your [[address|addresses]]
* transactions done from/to your addresses
* user preferences
* default key
* reserve keys
* [[Accounts_explained|accounts]]
* a version number
* [[Key pool]]
* Since 0.3.21: information about the current best chain, to be able to rescan automatically when restoring from a backup.

The data file for the wallet is wallet.dat and is located in the [[data directory|Bitcoin data directory]].

It is intended that a wallet be used on only one installation of Bitcoin at a time. Attempting to clone a wallet for use on multiple computers will result in "weird behavior"<ref>[http://forum.bitcoin.org/index.php?topic=5324.msg77896#msg77896 Multiple instance of bitcoin with the same wallet]</ref>.

The format of this file is Berkeley DB. Tools that can manipulate wallet files include [[pywallet]].

=== [[BitMixer.info]] ===
[[File:Bitmixer_logo.png|20px|link=http://bitmixer.info]] [http://bitmixer.info BitMixer] is secure Bitcoin Wallet and completely ''' FREE''' high volume Bitcoin Mixer, service is avaliable for all users, but for better [[anonymity]] recommended to use [https://www.torproject.org/projects/torbrowser.html.en Tor Browser] or other hide [[IP address]] programs.

=== Armory ===

The Armory client uses a custom [http://bitcoinarmory.com/developers/armory-wallet-files/ binary wallet format].

=== Blockchain.info ===

Blockchain.info use a plain text JSON wallet format documented [https://blockchain.info/wallet/wallet-format here]. Private keys Keys are stored in base58.

=== [[Coinkite]] ===

[[File:Coinkite.gif|20px|link=https://coinkite.com]] [https://coinkite.com/promo/wiki Coinkite] is the only web wallet using [https://en.bitcoin.it/wiki/BIP_0032 "HD Wallet (BIP32)"] technology, which can be shared partially or entirely with different systems, each with or without the ability to spend coins [https://coinkite.com/faq here]. Private keys Keys are sent to you encrypted with AES-256-CBC.

=== Multibit ===

Multibit uses the bitcoinj [http://code.google.com/p/protobuf/ protobuf] wallet file.

=== [[Coinprism]] ===

[[File:Coinprism_Favicon.png|16px|link=https://www.coinprism.com]] [https://www.coinprism.com Coinprism] is the first colored coin web wallet. Coinprism is similar to other web wallets, except you can store, issue, send and receive colored coins and not only normal Bitcoins. Note that the site is currently in invite-only beta.

=== [[Bitcoin Wallet]] ===

[[File:bitcoin_wallet.png|192px]] Bitcoin Wallet uses the bitcoinj [http://code.google.com/p/protobuf/ protobuf] format for its wallet file. However, due to Android isolation of applications, it is impossible to access the wallet file as a non-root user.

=== Email Tip Bot ===

[http://emailtipbot.com Email Tip Bot] is a wallet that works entirely through email. This makes it the only native solution to sending bitcoins on iOS devices, like the iPhone and iPad. It is secure against email spoofing, but can be compromised by anyone who has read access to your email.

==See Also==

* [[Securing your wallet]]
* [[EWallet]]
* [[Deterministic Wallet]]
==References==
<references />

Wallet

2014-05-14T18:01:23Z

Benbest: /* Bitcoin Wallet */ implement evident image creation intention

A Bitcoin '''wallet''' is a file that contains a collection of private keys.

=== Bitcoin Qt ===

The original Bitcoin client wallet file is named '''wallet.dat''' and contains<ref>[https://bitcointalk.org/index.php?topic=4448.0 Wallet import/export: bitkeys format]</ref>:

* keypairs for each of your [[address|addresses]]
* transactions done from/to your addresses
* user preferences
* default key
* reserve keys
* [[Accounts_explained|accounts]]
* a version number
* [[Key pool]]
* Since 0.3.21: information about the current best chain, to be able to rescan automatically when restoring from a backup.

The data file for the wallet is wallet.dat and is located in the [[data directory|Bitcoin data directory]].

It is intended that a wallet be used on only one installation of Bitcoin at a time. Attempting to clone a wallet for use on multiple computers will result in "weird behavior"<ref>[http://forum.bitcoin.org/index.php?topic=5324.msg77896#msg77896 Multiple instance of bitcoin with the same wallet]</ref>.

The format of this file is Berkeley DB. Tools that can manipulate wallet files include [[pywallet]].

=== [[BitMixer.info]] ===
[[File:Bitmixer_logo.png|20px|link=http://bitmixer.info]] [http://bitmixer.info BitMixer] is secure Bitcoin Wallet and completely ''' FREE''' high volume Bitcoin Mixer, service is avaliable for all users, but for better [[anonymity]] recommended to use [https://www.torproject.org/projects/torbrowser.html.en Tor Browser] or other hide [[IP address]] programs.

=== Armory ===

The Armory client uses a custom [http://bitcoinarmory.com/developers/armory-wallet-files/ binary wallet format].

=== Blockchain.info ===

Blockchain.info use a plain text JSON wallet format documented [https://blockchain.info/wallet/wallet-format here]. Private keys Keys are stored in base58.

=== [[Coinkite]] ===

[[File:Coinkite.gif|20px|link=https://coinkite.com]] [https://coinkite.com/promo/wiki Coinkite] is the only web wallet using [https://en.bitcoin.it/wiki/BIP_0032 "HD Wallet (BIP32)"] technology, which can be shared partially or entirely with different systems, each with or without the ability to spend coins [https://coinkite.com/faq here]. Private keys Keys are sent to you encrypted with AES-256-CBC.

=== Multibit ===

Multibit uses the bitcoinj [http://code.google.com/p/protobuf/ protobuf] wallet file.

=== [[Coinprism]] ===

[[File:Coinprism_Favicon.png|16px|link=https://www.coinprism.com]] [https://www.coinprism.com Coinprism] is the first colored coin web wallet. Coinprism is similar to other web wallets, except you can store, issue, send and receive colored coins and not only normal Bitcoins. Note that the site is currently in invite-only beta.

=== [[Bitcoin Wallet]] ===

[[File:bitcoin_wallet.png|192px]] Bitcoin Wallet uses the bitcoinj [http://code.google.com/p/protobuf/ protobuf] format for its wallet file. However, due to Android isolation of applications, it is impossible to access the wallet file as a non-root user.

=== Email Tip Bot ===

[http://emailtipbot.com Email Tip Bot] is a wallet that works entirely through email. This makes it the only native solution to sending bitcoins on iOS devices, like the iPhone and iPad. It is secure against email spoofing, but can be compromised by anyone who has read access to your email.

==See Also==

* [[Securing your wallet]]
* [[EWallet]]
* [[Deterministic Wallet]]
==References==
<references />

Original Bitcoin client

2014-05-12T02:12:18Z

Benbest: wikilink

The '''Satoshi [[Clients|client]]''' or the '''Satoshi code''' refers to [[bitcoind]], bitcoin-client, and bitcoin-qt. This is in honor of [[Satoshi Nakamoto]] for creating [[Bitcoin]].
<dl>
<dt>In the most widest sense:
<dd>All releases of bitcoin-x.y.z (starting 2009) and future official releases of the [http://bitcoin.org bitcoin-developer community]. (Last/newest when writing this remark is of release 0.7.2 in December 2012).
<dt>In the narrow sense:
<dd>Only the bitcoin releases up to version 0.3.19 which Satoshi Nakamoto himself was chief and main developer. He retired afterwards (end of 2010) completely from this project. With the next release also [[Testnet]] was reseted with a new Genesis block.
<dt>Original Satoshi clients:
<dd>Only the bitcoin releases 0.1.0 up to 0.1.5 which supported only Windows 2000 / Windows NT and Windows XP (perhaps Windows Vista). The next bitcoin release 0.2.0 from Dec 2009, nearly a year later, starts to support Linux and the [https://bitcointalk.org/index.php?topic=5.0 community] got more and more actively involved in the development.
</dl>
For history, one of the earliest available proof of a running bitcoin-0.1.0 with a [http://sourceforge.net/mailarchive/attachment.php?list_name=bitcoin-list&message_id=da7b3ce30901101113v2ec6bf61xf018265479eb7faf%40mail.gmail.com&counter=1 human readable debug log].
There might have been also (private) earlier client code before 0.1.0 available only to Satoshi Nakamoto.
==See also==
[[Bitcoind#History of official bitcoind (and predecessor) releases|History of Bitcoind]]

Bitcoin Core

2014-05-12T02:08:37Z

Benbest: wikilink

'''Bitcoin-Qt''' is the third [[Bitcoin]] [[Clients|client]], developed by [[Wladimir J. van der Laan]] based on the original reference code by [[Satoshi Nakamoto]].<ref name="Bitcoin Client Software">{{cite web|title=Bitcoin Client Software|url=http://bitcoin.org/clients.html|publisher=Bitcoin.org|accessdate=21 October 2012|quote=The original software written by Satoshi Nakamoto, the project's founder.}}</ref><ref>http://gavintech.blogspot.co.uk/2012/03/full-disclosure-bitcoin-qt-on-windows.html, Full disclosure: Bitcoin-Qt on Windows vulnerability, 21st October 2012</ref><ref>http://web.nvd.nist.gov/view/vuln/detail?vulnId=CVE-2012-4682, Vulnerability Summary for CVE-2012-4682, 21st October 2012</ref> It has been bundled with [[bitcoind]] since version 0.5.<ref name="Bitcoin-Qt/Bitcoind Releases">{{cite web|title=Bitcoin-Qt/Bitcoind Releases|url=http://bitcoin.org/news.html|publisher=Bitcoin.org|accessdate=21 October 2012}}</ref>

==History==

Bitcoin-Qt can used as a desktop client for regular payments or as a server utility for merchants and other payment services.

===Current version===
Source code (and build instructions for supported platforms) can be found at the [https://github.com/bitcoin/bitcoin Bitcoin GitHub page].

==Features==
* Compatibility with Linux (both GNOME and KDE), Mac OS X and Windows
* All functionality of the original wxWidgets client
* Asks for confirmation before sending coins
* CSV export of transactions
* Clearer transaction list with status icons and real-time filtering
* Progress bar on initial block download
* Languages: Dutch, English, German, many more
* Sendmany support in UI (send to multiple recipients in one transaction)
* Multiple [[Units|unit]] support, can show subdivided bitcoins (mBTC, µBTC) for users that like large numbers (only decimal units)
* Splash screen that details progress

==Criticism==
Bitcoin-Qt is often criticized for being slow in downloading and verifying the Bitcoin transaction database (often called the Blockchain).

Wallet management is also cumbersome. Unlike clients such as [[MultiBit]], only one wallet at a time is supported, and its location is required to be the same as the blockchain storage, making it [[Securing_your_wallet#Making_a_secure_workspace|difficult to place the wallet on an encrypted drive]].

==External Links==

* [https://bitcointalk.org/index.php?topic=15276.0 Forum thread] (includes screenshots)
* [https://github.com/bitcoin/bitcoin Current GitHub repository shared with bitcoind]

<references

/>

==See also==

* [[QBitcoin]]
* [[bitcoind]]

[[es:Bitcoin-Qt]]

[[Category:User Interfaces]]
[[Category:Frontends]]
[[Category:Free Software]]
[[Category:Open Source]]

Bitcoind

2014-05-12T02:06:43Z

Benbest: wikilink

Bitcoind is a program that implements the Bitcoin protocol for command line and remote procedure call (RPC) use. It is also the first Bitcoin [[Clients|client]] in the network's history. It is available under the [http://www.opensource.org/licenses/mit-license.php MIT license] in 32-bit and 64-bit versions for Windows, GNU/Linux-based OSes, and Mac OS X.

Prior to version 0.5, this service-provider client used a wxWidgets GUI as its default GUI. It is now instead bundled with [[Bitcoin-Qt]].

=== Running ===

See [[Running_bitcoind|running bitcoind]] for more detail and an example of the configuration file.

Bitcoind is a headless daemon, and also bundles a testing tool for the same daemon. It provides a JSON-RPC interface, allowing it to be controlled locally or remotely which makes it useful for integration with other software or in larger payment systems. [[Original Bitcoin client/API Calls list|Various commands]] are made available by the API.

To use locally, first start the program in daemon mode:
:bitcoind -daemon

Then you can use the same program to execute [[Original Bitcoin client/API Calls list|API commands]], e.g.:
:bitcoind getinfo
:bitcoind listtransactions

To stop the bitcoin daemon, execute:
:bitcoind stop

==History of official bitcoind (and predecessor) releases==
{| class="wikitable"
|-
! Version
! Date
! Supported platforms
! Reference
|-
| 0.7.2
| 2012-Dec-14
| Windows32 / Linux / MacOS X
| <ref>[https://bitcointalk.org/index.php?topic=130819.msg1399721#msg1399721 Bitcoin-Qt/bitcoind version 0.7.2 released]</ref>
|-
| 0.5.7
| 2012-Nov-23
|
|
|-
| 0.7.1
| 2012-Oct-19
| Windows32 / Linux / MacOS X
| <ref>[https://bitcointalk.org/index.php?topic=119277.msg1283232#msg1283232 Bitcoin-Qt/bitcoind version 0.7.1 released]</ref>
|-
| 0.7.0
| 2012-Sep-17
| Windows32 / Linux / MacOS X
| <ref>[https://bitcointalk.org/index.php?topic=110243.msg1199467 Bitcoin-Qt/bitcoind version 0.7.0 released]</ref>
|-
| 0.5.6
| 2012-Jul-22
| Windows32 / Linux / MacOS X
|
|-
| 0.4.7
| 2012-Jul-22
| Windows32
|
|-
| 0.6.0.9
| 2012-Jul-08
|
|
|-
| 0.6.3
| 2012-Jun-25
| Windows32 / Linux / MacOS X
| <ref>[https://bitcointalk.org/index.php?topic=89877.msg989356#msg989356 Bitcoin-Qt / bitcoind version 0.6.3 released]</ref>
|-
| 0.6.2
| 2012-May-08
| Windows32 / Linux / MacOS X
|<ref>[https://bitcointalk.org/index.php?topic=78829.msg888578#msg888578 Re: Version 0.6.1 release candidate 2]</ref>
|-
| 0.6.1
| 2012-May-04
| Windows32 / Linux / MacOS X
|
|-
| 0.6.0.7
| 2012-May-04
|
|
|-
| 0.5.5
| 2012-May-04
| Windows32
| <ref>[https://bitcointalk.org/index.php?topic=79651 Version 0.5.5 and 0.4.6 released]</ref>
|-
| 0.4.6
| 2012-May-04
| Windows32
| <ref>[https://bitcointalk.org/index.php?topic=79651 Version 0.5.5 and 0.4.6 released]</ref>
|-
| 0.5.4
| 2012-Apr-15
| Windows32 / Linux
| <ref>[https://bitcointalk.org/index.php?topic=76808.0 Version 0.5.4 released]</ref>
|-
| 0.4.5
| 2012-Apr-15
|
|
|-
| 0.6.0
| 2012-Mar-30
| Windows32 / Linux / MacOS X
| <ref>[http://www.bitcoinforum.com/bitcoin-discussion/bitcoin-org-bitcoin-version-0-6-0-released/ bitcoin.org: Bitcoin version 0.6.0 released]</ref>
|-
| 0.5.3.1
| 2012-Mar-17
| Windows32
| <ref>[https://bitcointalk.org/index.php?topic=69120.0 URGENT: Windows Bitcoin-Qt update]</ref>
|-
| 0.5.3
| 2012-Mar-14
| Windows32 / Linux / MacOS X
| <ref>[https://bitcointalk.org/index.php?topic=68895.0 Bitcoin-Qt, bitcoind version 0.5.3 released]</ref>
|-
| 0.4.4
| 2012-Mar-14
| Windows32
| <ref>[https://bitcointalk.org/index.php?topic=70566.0 bitcoind version 0.4.4 released]</ref>
|-
| 0.5.2
| 2012-Jan-09
| Windows32 / Linux / MacOS X
| <ref>[https://bitcointalk.org/index.php?topic=60146.0 Bitcoin-Qt, bitcoind version 0.5.2 released]</ref>
|-
| 0.4.3
| 2012-Jan-09
| Windows32 / Linux
| <ref>[https://bitcointalk.org/index.php?topic=57734.0 bitcoind version 0.4.3 released]</ref>
|-
| 0.5.1
| 2011-Dec-15
| Windows32 / Linux / MacOS X
| <ref>[https://bitcointalk.org/index.php?topic=54717.0 Bitcoin-Qt, bitcoind version 0.5.1 released]</ref>
|-
| 0.4.2
| 2011-Dec-12
|
|
|-
| 0.5.0
| 2011-Nov-21
| Windows32 / Linux / MacOS X
| <ref>[https://bitcointalk.org/index.php?topic=52480.0 Bitcoin-Qt/bitcoind version 0.5.0]</ref>
|-
| 0.4.1
| 2011-Nov-21
| Windows32 / Linux / MacOS X
| <ref>[https://bitcointalk.org/index.php?topic=52503.0 wxBitcoin/bitcoind version 0.4.1]</ref>
|-
| 0.4.0
| 2011-Sep-23
| Windows32 / Linux / MacOS X
| <ref>[https://bitcointalk.org/index.php?topic=45410.0 Bitcoin version 0.4.0 released]</ref>
|-
| 0.3.24
| 2011-Jul-08
| Windows32 / Linux / MacOS X
| <ref>[http://forum.bitcoin.org/index.php?topic=27187.0 Bitcoin version 0.3.24 released]</ref>
|-
| 0.3.23
| 2011-Jun-13
| Windows32 / Linux / MacOS X
| <ref>[http://forum.bitcoin.org/index.php?topic=16553.0 Bitcoin version 0.3.23 released]</ref>
|-
| 0.3.22
| 2011-Jun-05
| Windows32 / Linux / MacOS X
| <ref>[http://forum.bitcoin.org/index.php?topic=12269.0 Bitcoin version 0.3.22]</ref>
|-
| 0.3.21
| 2011-Apr-27
| Windows32 / Linux / MacOS X
| <ref>[http://bitcointalk.org/?topic=6642.0 Bitcoin version 0.3.21]</ref>
|-
| 0.3.20
| 2011-Feb-21
| Windows32 / Linux / MacOS X
| <ref>[http://www.bitcoin.org/smf/index.php?topic=3704.0 Version 0.3.20]</ref>
|-
|0.3.19
|2010-12-12
|Windows32 / Linux / MacOS X
|<ref>[https://bitcointalk.org/index.php?topic=2228.msg29479#msg29479 Added some DoS limits, removed safe mode (0.3.19)]</ref>
|-
|0.3.18
|2010-12-08
|Windows32 / Linux / MacOS X
|<ref>[https://bitcointalk.org/index.php?topic=2162.0 Version 0.3.18]</ref>
|-
|0.3.17
|2010-11-25
|Windows32 / Linux / MacOS X
|<ref>[https://bitcointalk.org/index.php?topic=1946.0 Version 0.3.17]</ref>
|-
|0.3.15
|2010-11-13
|Windows32 / Linux
|<ref>[https://bitcointalk.org/index.php?topic=1780.0 Version 0.3.15]</ref>
|-
|0.3.14
|2010-10-21
|Windows32 / Linux
|<ref>[https://bitcointalk.org/index.php?topic=1528.0 Version 0.3.14]</ref>
|-
|0.3.13
|2010-10-01
|Windows32 / Linux / MacOS X
|<ref>[https://bitcointalk.org/index.php?topic=1327.0 Version 0.3.13, please upgrade]</ref>
|-
|0.3.12
|2010-09-07
|Windows32 / Linux
|<ref>[https://bitcointalk.org/index.php?topic=999.0 Version 0.3.12 is now available.]</ref>
|-
|0.3.11
|2010-08-27
|Windows32 / Linux / MacOS X
|<ref>[https://bitcointalk.org/index.php?topic=941.0 Version 0.3.11 is now available.]</ref>
|-
|0.3.10
|2010-08-15
|Windows32 / Linux32/64 / MacOS X
|<ref>[https://bitcointalk.org/index.php?topic=820.msg9452#msg9452 tcatm's 4-way SSE2 for Linux 32/64-bit is in 0.3.10]</ref>
|-
|0.3.8.1
|2010-08-09
|Linux64
|<ref>[https://bitcointalk.org/index.php?topic=765.0 Version 0.3.8.1 update for Linux 64-bit]</ref>
|-
|0.3.8
|2010-08-03
|Windows32 / Linux / MacOS X
|<ref>[https://bitcointalk.org/index.php?topic=696.0 Please upgrade to 0.3.8!]</ref>
|-
|0.3.7
|2010-08-01
|Windows32 / Linux / MacOS X
|<ref>[https://bitcointalk.org/index.php?topic=664.0 0.3.7 Changes]</ref>
|-
|0.3.6
|2010-07-29
|Windows32 / Linux / MacOS X
|<ref>[https://bitcointalk.org/index.php?topic=626.0 *** ALERT *** Upgrade to 0.3.6]</ref>
|-
|0.3.3
|2010-07-25
|Windows32 / Linux / MacOS X
| <ref>[https://bitcointalk.org/index.php?topic=570.0 Bitcoin 0.3.3 released -- PLEASE UPGRADE]</ref>
|-
|0.3.2.5
|2010-07-24
|Windows32 / Linux
| <ref>[https://bitcointalk.org/index.php?topic=556.0 Version 0.3.2.5 -- please test!]</ref>
|-
|0.3.2
|2010-07-17
|Windows32 / Linux / MacOS X
| <ref>[https://bitcointalk.org/index.php?topic=437.0 Bitcoin 0.3.2 released]</ref>
|-
|0.3.1
|2010-07-15
|Windows32 / Linux
|<ref>[https://bitcointalk.org/index.php?topic=383.0 Bitcoin 0.3.1 released]</ref>
|-
|0.3.0
|2010-07-06
|Windows32 / Linux / MacOS X
|<ref>[https://bitcointalk.org/index.php?topic=238.0 Bitcoin 0.3 released!]</ref><ref>[http://sourceforge.net/mailarchive/message.php?msg_id=25686730 Bitcoin 0.3 released!]</ref>
|-
|0.2.0
|2009-12-17 06:52
|Windows XP /Vista / Linux
|<ref>[https://bitcointalk.org/index.php?topic=16.0 Bitcoin 0.2 released!]</ref><ref>[http://sourceforge.net/mailarchive/message.php?msg_id=24205662 Bitcoin 0.2 released]</ref>
|-
|0.1.5
|2009-02-04 19:46
|Windows NT/2000/XP
|<ref>[http://sourceforge.net/mailarchive/message.php?msg_id=21500063 Bitcoin v0.1.5 released]</ref>
|-
|0.1.3
|2009-01-12 22:48
|Windows NT/2000/XP
|<ref>[http://sourceforge.net/mailarchive/message.php?msg_id=21313152 Bitcoin v0.1.3]</ref>
|-
|0.1.2
|2009-01-11 22:32
|Windows NT/2000/XP
|<ref>[http://sourceforge.net/mailarchive/message.php?msg_id=21303153 Bitcoin v0.1.2 now available]</ref>
|-
|0.1.0
|2009-01-09
|Windows NT/2000/XP
|
|}

Up to and including version 0.3.19 is the "Satoshi code". The founder retired from development with end of 2010. [https://bitcointalk.org/index.php?topic=68121.10;wap2/ Here] are three URLs given where you still(!) (2013-01-04) can download one of the [[Satoshi client|"original Satoshi codes"]]. So also this [http://www.antepedia.com/detail/p/237812136.html Bitcoin release history].

==Theory of Operation==

bitcoind is a multithreaded C++ program. It is designed to be portable across Windows, Mac, and Linux systems. The multithreaded aspect leads to some complexity and the use of certain code patterns to deal with concurrency that may be unfamiliar to many programmers. Also, the code is aggressive in the use of C++ constructs, so it will help to be fluent with map, multimap, set, string, vector, iostream, and templates. As is typical of a C++ program, a lot of code tends to end up in the header files so be sure to search both the .cpp and .h files when looking for a function.

The client is oriented around several major operations, which are described in separate detailed articles and summarized in the following sections.

===[[Satoshi Client Initialization and Startup|Initialization and Startup]]===
Upon startup, the client performs various initialization routines including starting multiple threads to handle concurrent operations.

===[[Satoshi Client Node Discovery|Node Discovery]]===
The client uses various techniques to find out about other Bitcoin nodes that are currently connected to the network.

===[[Satoshi Client Node Connectivity|Node Connectivity]]===
The client initiates and maintains connections to other nodes.

===[[Satoshi Client Sockets and Messages|Sockets and Messages]]===
The client processes messages from other nodes and sends messages to other nodes using socket connections.

===[[Satoshi Client Block Exchange|Block Exchange]]===
Nodes advertise their inventory of blocks to each other and exchange blocks to build block chains.

===[[Satoshi Client Transaction Exchange|Transaction Exchange]]===
Nodes exchange and relay transactions with each other. The client associates transactions with bitcoin addresses in the local wallet.

===Wallet Services===
The client can create transactions using the local wallet. The client associates transactions with bitcoin addresses in the local wallet. The client provides a service for managing the local wallet.

===RPC Interface===
The client offers an JSON-RPC interface over HTTP over sockets to perform various operational functions and to manage the local wallet.

===User Interface===
Bitcoind's current user interface is the command line while it used to be based on [http://www.wxwidgets.org wxWidgets]. A graphical user interface is now provided by [[Bitcoin-qt]] in version 0.5+ for the reference client.

==Troubleshooting==

===I get "Error loading blkindex.dat" when I try to run the client===

blkindex.dat is part of the database that stores the local copy of the blockchain which may have become corrupted. Open the Bitcoin data dir:

Windows: %APPDATA%\Bitcoin
Linux: ~/.bitcoin
Mac: ~/Library/Application Support/Bitcoin/

Make a backup of that entire folder, then delete everything EXCEPT wallet.dat. Start bitcoind again and it will download a fresh copy of the blockchain.

==See Also==

* [[Original Bitcoin client/API calls list]]
* [[Protocol specification|Bitcoin network protocol]]
* [[Development process]]
* [[Release process]]
* [[Changelog]]

==External Links==
* [https://github.com/bitcoin/bitcoin/ Bitcoin Client project on Github]

==References==
<references />
`
[[es:Bitcoind]]

[[Category:Nodes]]
[[Category:Wallets]]
[[Category:User Interfaces]]
[[Category:Clients]]
[[Category:Developer]]
[[Category:Technical]]
[[Category:Free Software]]
[[Category:License/MIT-X11]]
[[Category:Open Source]]

Comparison of cryptocurrencies

2014-05-08T20:37:33Z

Benbest: /* Nxt (NXT) */ wikilink

This article aims to list relevant cryptocurrencies, even those too minor to have their own wiki entry. For further information, see the discussion [https://bitcointalk.org/index.php?topic=134179.0 on this bitcointalk.org thread].

= Currencies =
== Major ==
=== Bitcoin (BTC) ===
* http://bitcoin.org/
* blocks every '''10 min'''
* coin supply* '''21 million''' coins will be available
* difficulty adjustment* '''2016 blocks'''
* hashing algorithm '''SHA256d'''
* Initial Reward '''50 '''coins per block
* Market Cap: $144,000,000 (Jan 5th, 2013)
* Launch Date: January 3rd, 2009

=== Namecoin (NMC) ===
* https://en.bitcoin.it/wiki/Namecoin
* (merged mined with BTC)
* https://github.com/vinced/namecoin
* http://namecoin.info/
* blocks every '''10 min'''
* coin supply* '''21 million''' coins will be available
* difficulty adjustment '''2016 blocks'''
* hashing algorithm '''SHA256d'''
* Initial Reward '''50 '''coins per block
* Market Cap: ???? BTC
* Launch Date: April 18, 2011

=== Litecoin (LTC) ===
* http://litecoin.org/
* blocks every '''2.5 min'''
* coin supply* '''84 million''' coins will be available
* difficulty adjustment '''2016 blocks'''
* hashing algorithm '''scrypt '''
* Initial Reward '''50''' coins per block
* Market Cap: 150,000 BTC
* Launch Date: October 2011

=== Dogecoin (Doge) ===
* http://www.Dogecoin.com/
* blocks every '''1 min'''
* coin supply* '''99 Billion''' coins will be available and 5 Billion added every year.
* hashing algorithm '''scrypt '''
* Initial Reward '''1,000,000 - 0 (Random)''' coins per block
* Market Cap: $56,000,000
* Launch Date: December 2013

=== [[Peercoin]] (PPC) ===
* http://ppcoin.org/
* https://bitcointalk.org/index.php?topic=101820.0
* blocks every '''10 min'''
* Coin supply* '''non-deterministic ''' coins will be available
* difficulty adjustment '''each block'''
* hashing algorithm '''SHA-256'''
* Reward '''varies on difficulty''' coins per block
* Mining: Incorporates [[Proof of Stake]] coin Generation, contains central checksums to kickstart the protocol
* Market Cap: ???? BTC
* Launch Date: approx August 19th, 2012 (date of its [http://ppcoin.org/static/ppcoin-paper.pdf whitepaper])
** The public design phase of this coin was very brief.

=== Mastercoin (MSC) ===
* http://www.mastercoin.org
* Coin supply: 619478.59338440 MSC
* Launch Date: September 1, 2013
* Blockchain: Uses Bitcoin for transport, storage and security, inherits Bitcoin Protocol properties
* Extended Properties: Distributed Exchange, Savings & Guardian Addresses, Contracts for Difference, Smart Properties, User Currencies
* Protocol: Master Protocol
* Spec Github Repo: https://github.com/mastercoin-MSC/spec

== New ==
''Please put here any coins whose concept are new. If a coin is discussed for 6 months and launched yesterday, it is not new.''

=== Hashcoin (HSC) ===
* http://hashcoin.technology
* Block reward: '''1024 HSC'''
* Block time: '''10 seconds'''
* Hashing algorithm '''SHA256d'''
* Retarget: Every 720 blocks or every '''2 Hours'''
* Coin supply: '''28.4 billion''' (28,401,840,000) total coins
* Block reward halved every 9,467,280 blocks (~ 3 years)
* Extended Properties: Decentralised Exchange, Real-time Payroll, Digitised Property Rights, Contract Rights & Intellectual Property Rights, Trading Locales, DNA Records, Patents, Shares.
* Launch Date: January 3, 2014
* Site Go-Live: April 26, 2014

=== Coino (CON) ===
* http://www.coino.org
* PoW algorithm: '''Scrypt'''
* Block reward: '''35 CON''' (First 140 Blocks only 1 Coin for instamine)
* Block time: '''25 seconds'''
* Retarget: '''1 Hour'''
* Coin supply: '''100 million''' total coins
* Launch Date: January 18, 2014

=== RonPaulCoin (RPC) ===
* http://www.ronpaulcoin.com
* Blocks every '''2 min'''
* Coin supply '''2.1 million''' total coins
* Difficulty adjustment '''every block'''
* Hashing algorithm '''scrypt'''
* Initial Reward '''1 '''coin per block
* Block reward halved every 262k blocks (~ 4 years)
* Launch Date: December 29, 2013

=== Betacoin (BET) ===
* http://betacoin.org/
* Blocks every '''4 min'''
* Coin supply* '''32 million''' coins will be mined in ~ first 6 years + '''0,39% annual'''
* Difficulty adjustment* '''6 blocks'''
* Hashing algorithm '''SHA256d'''
* Initial Reward '''128 '''coins per block
* Block reward halved every 126k blocks (~ 1 year)
* Launch Date: October, 2013

=== Nxt (NXT) ===
* http://nextcoin.org
* Pronounced as "Next"
* Blocks every '''1 min'''
* Designed as 100% PoS ([[Proof of Stake|Proof-of-Stake]]) system
* Coin supply* '''1 billion''' coins exist from the start distributed by 74 founding stake holders
* Launch Date: September, 29, 2013

=== Globe (GLB) ===
* http://www.globecrypto.com/
* Blocks every '''1 min'''
* Difficulty adjustment '''1 day'''
* Hashing algorithm '''SHA256d'''
* Initial Reward '''10''' coin per block
* Block reward halved at 86.4k blocks, 5 coins per block thereafter, with 4% increase annually
* Launch Date: December 06, 2013

=== Valutacoin(VAC) ===
* http://valutacoin.com/
* blocks every '''10 min'''
* coin supply* '''21 million''' coins will be available
* difficulty adjustment* '''2016 blocks'''
* hashing algorithm '''SHA256d'''
* Initial Reward '''50 '''coins per block
* Launch Date: April 2014

== Minor ==
=== Megacoin (MΣC) ===
* http://www.megacoin.co.nz/
* https://forum.megacoin.co.nz
* Block Target is 2.5 minutes
* Block reward halved every every 420,000 blocks
* 25 coins per block
* 42 Million total coins
* Difficulty changes every block

The implentation of the Kimoto Gravity well retargets difficulty every block. This keeps mining fair and secure for all miners and users of the coin, and prevents the rampant multipool abuse that was (and still is) common with most all other altcoins out on the market today.

=== [[Anoncoin]] (ANC) ===
* https://anoncoin.net/
* https://forum.anoncoin.net
* Block Target is 3.4 minutes
* Block reward halved every 306k blocks
* 5 coins per block
* 4.2 million total coins
* Difficulty changes every block

[[Anoncoin]]'s goal is to make the user more anonymous by providing built-in support for I2P and [[Zerocoin]].

=== Franko (FRK) ===
* http://www.frankos.org/
* http://forum.frankos.org
* Block Target is 0.5 minutes
* Block reward halved every 22m blocks
* 0.25 coins per block
* 11.2 million total coins
* Difficulty changes every 720 blocks

Franko is considered the crypto with the fairest adoption length. Accepted by over 50 merchants and 10 brick and mortar stores.

Base currency used by the Franko Collective, a democratic group of developers.

=== FeatherCoin (FTC) ===
* http://feathercoin.com/
* A fork of Litecoin
* 243 million total coins

=== CraftCoin (CRC) ===
* http://craftcoin.net/
* Based on Litecoin
* Portable in-game currency for Minecraft Servers
* 206,847 total coins

=== Tonal Bitcoin (TBC) ===
* [[Tonal Bitcoin]]
* (merged mined with BTC)
* (blockchain shared with BTC)
* (automatically converted to/from BTC)
* blocks every '''10 min'''
* Coin supply* '''7.8 tam''' coins will be available
* difficulty adjustment '''2016 blocks'''
* hashing algorithm '''SHA-256'''
* Initial Reward '''1,2905.2''' coins per block
* Market Cap: $144,000,000 (Jan 5th, 2013)
* Launch Date: January 2rd, 2011

=== IxCoin (IXC) ===
* https://bitcointalk.org/index.php?topic=36701.0
* (merged mined with BTC)
* blocks every '''10 min'''
* Coin supply* '''21 million''' coins will be available
* difficulty adjustment '''2016 blocks'''
* hashing algorithm '''SHA1'''
* Reward '''96 '''coins per block

=== Devcoin (DEV) ===
* https://bitcointalk.org/index.php?topic=34586.0
* (merged mined with BTC)
* blocks every '''10 min'''
* coin supply* '''constant generation''' coins will be available (???)
* difficulty adjustment '''2016 blocks'''
* hashing algorithm '''SHA256d'''
* Reward '''50,000''' coins per block
* '''EXTRA 90% block subsidy goes to foundation'''

=== Freicoin (FRC) ===
* http://freico.in/
* http://www.freicoin.org/
* https://bitcointalk.org/index.php?topic=89843.0
* https://bitcointalk.org/index.php?topic=3816.0
* blocks every '''10 minutes'''
* coin supply* '''100 million''' coins will be available
* difficulty adjustment '''2016 blocks'''
* hashing algorithm '''SHA-256'''
* [http://www.freicoin.org/freicoin-generation-graph-t41-20.html#p532 Arithmetically decreasing] reward
* EXTRA:
-- 4.89% annual [http://en.wikipedia.org/wiki/Demurrage_currency demurrage]
-- 80% block subsidy [http://www.freicoin.org/application-developer-best-practices-t87.html#p919 goes to foundation for the first 3 years] (about 500 coins for each of first 161280 blocks, total 80m)
-- [u]In need of Dev work on daemon, client etc but network still running[/u]

=== I0coin (I0C) ===
* https://bitcointalk.org/index.php?topic=36425.0 ; https://github.com/kr105rlz/i0coin
* Perhaps should be moved to Dead section?

=== Terracoin (TRC) ===
* http://terracoin.org/
* blocks every '''2 minutes'''
* coin supply* '''42 million''' coins will be available
* difficulty adjustment '''30 blocks'''
* hashing algorithm '''SHA-256'''
* Reward '''20''' coins per block

=== Liquidcoin (LQC) ===
* https://bitcointalk.org/index.php?topic=60026.0
* blocks every '''10 minutes'''
* '''no cap''' as block subsidy has a minimum of 1 coin
* Constant difficulty of '''0.5'''
* Coin reward drops over time

=== BBQCoin (BQC) ===
* http://blog.bbqcoin.org http://www.bbqcoin.com
* blocks every '''1 minute'''
* coin supply* '''88 million''' coins will be available
* difficulty adjustment '''60 blocks'''
* hashing algorithm '''Scrypt'''
* Reward '''42''' coins per block

=== BitBar (BTB) ===
* http://bitbar.biz/home
* blocks every '''10 minutes'''
* hashing algorithm '''Scrypt'''
* Reward '''1''' coin per block
* Coin reward drops over time

=== Netcoin (NET) ===
* Main - http://netcoin.org.uk/
* Forums - http://forum.netcoinfoundation.org/
* blocks every '''1 min'''
* coin supply* '''320.6 million''' coins will be available
* difficulty adjustment* '''60 blocks'''
* hashing algorithm '''Scrypt'''
* Initial Reward '''1024 '''coins per block
* Reward Halves '''Every 3 months or 129,600 Blocks'''
* Market Cap: approx. $200,000 (Dec 4th, 2013)
* Launch Date: Sept 2nd, 2013

=== GoldCoin (GLD) ===
* http://gldcoin.com/
* https://www.gldtalk.org/
* https://bitcointalk.org/index.php?topic=317568.0
* blocks every '''2 minutes'''
* coin supply* '''123 million''' coins will be available
* difficulty adjustment* '''60 blocks'''
* hashing algorithm '''Scrypt'''
* reward '''45''' coins per block

== Dead / dying ==
===Qubic===
https://bitcointalk.org/index.php?topic=112676.0
Qubic Forum: http://qubic.boards.net
===TimeKoin===
Still alive* http://timekoin.org/* https://bitcointalk.org/index.php topic=88467.0
===SC Solidcoin===
scam?* https://en.bitcoin.it/wiki/SolidCoin ; http://solidcoin.info/
===GG Geist Geld===
https://bitcointalk.org/index.php?topic=42417.0 ; https://github.com/Lolcust/GeistGeld
===TBX Tenebrix===
https://bitcointalk.org/index.php?topic=45667.0 ; https://github.com/Lolcust/Tenebrix
===FBX Fairbrix===
https://bitcointalk.org/index.php?topic=46528.0 ; https://github.com/coblee/Fairbrix
===CLC Coiledcoin===
killed in 51% attack ; https://bitcointalk.org/index.php?topic=56675.0
===RUC Rucoin===
https://www.rucoin.org/ ; https://bitcointalk.org/index.php?topic=48582.0
===MMM MMMcoin===
dead
===Weeds===
[https://bitcointalk.org/index.php?topic=9493.0]
===Beertoken===
[https://bitcointalk.org/index.php?topic=9493.0]

=See Also=
* [http://bitcointalk.org/index.php?topic=134179.0 List of all cryptocoins] curated list on BitcoinTalk forum.

[[Category:Alternative cryptocurrencies]]

Bitcoin

2014-04-21T16:16:00Z

Benbest: explicit 21 million

'''Bitcoin''' is a decentralized [[digital currency]] created by developer [[Satoshi Nakamoto]]. It does not rely on a central server to process transactions or store funds. There are a maximum of 2,100,000,000,000,000 Bitcoin elements (called satoshis), currently most commonly measured in units of 100,000,000 known as BTC. Stated another way, no more than 21 million BTC are to ever be created.

{{As of|April 2014}}, it is the most widely used alternative currency,<ref name="Quantitative Analysis of the Full Bitcoin Transaction Graph">{{cite web|title=Quantitative Analysis of the Full Bitcoin Transaction Graph|url=http://eprint.iacr.org/2012/584.pdf|publisher=Cryptology ePrint Archive|accessdate=18 October 2012|author=Ron Dorit|coauthors=Adi Shamir|page=17|quote=The Bitcoin system is the best known and most widely used alternative payment scheme,...}}</ref><ref name="Mt.Gox data">{{Cite web|title=Mt.Gox data|url=http://bitcoincharts.com/markets/mtgoxUSD.html|publisher=Bitcoincharts}}</ref> now with the total market cap over 6 billion US dollars<ref>{{cite web|title=Market Capitalization|url=https://blockchain.info/charts/market-cap|publisher= [[BlockChain.info]] |accessdate=21 April 2014}}</ref>.

Bitcoin has no central issuer; instead, the peer-to-peer network regulates Bitcoins, transactions and issuance according to consensus in network software.
Bitcoins are issued to various nodes that verify transactions through computing power;
it is established that there will be a limited and scheduled release of no more than 21 million BTC worth of coins, which will be fully issued by the year 2140.

Internationally, Bitcoins can be exchanged and managed through various websites and [[software]] along with physical banknotes and coins.<ref>{{Cite web|title=Physical Bitcoins by Casascius|url=https://www.casascius.com/|publisher=Casascius Coins|accessdate=29 September 2012}}</ref><ref>{{Cite web|title=Bitbills|url=http://www.bitbills.com/|publisher=Bitbills|accessdate=29 September 2012}}</ref>

==History==
:Main article: [[History]]

A cryptographic system for untraceable payments was first described by David Chaum in 1982.<ref>[http://blog.koehntopp.de/uploads/Chaum.BlindSigForPayment.1982.PDF David Chaum, Blind signatures for untraceable payments], Advances in Cryptology - Crypto '82, Springer-Verlag (1983), 199–203.</ref> In 1990 Chaum extended this system to create the first cryptographic anonymous electronic cash system.,<ref>{{cite journal|journal=Lecture Notes in Computer Science|last1=Chaum|first1=David|last2=Fiat|first2=Amos|last3=Naor|first3=Moni|title=Untraceable Electronic Cash|url=http://blog.koehntopp.de/uploads/chaum_fiat_naor_ecash.pdf}}</ref> which became known as ecash.
<ref>{{cite web|url=http://www.wired.com/wired/archive/2.12/emoney.html|publisher=Wired|title=E-Money (That's What I Want)|date=1994–2012|author=Steven Levy}}</ref> In 1998 Wei Dai published a description of an anonymous, distributed electronic cash system which he called "b-money".<ref>{{cite web|title=B-Money|url=http://www.weidai.com/bmoney.txt|author=Wei Dai|year=1998}}</ref> Around the same time, Nick Szabo created ''bit gold''.<ref>{{cite web|url=http://spectrum.ieee.org/computing/software/bitcoin-the-cryptoanarchists-answer-to-cash/0|title=Bitcoin: The Cryptoanarchists’ Answer to Cash|publisher=IEEE Spectrum|quote=Around the same time, Nick Szabo, a computer scientist who now blogs about law and the history of money, was one of the first to imagine a new digital currency from the ground up. Although many consider his scheme, which he calls “bit gold,” to be a precursor to Bitcoin}}</ref><ref name="bitgold">{{cite web|title=Bit gold|url=http://unenumerated.blogspot.co.uk/2005/12/bit-gold.html|author=Nick Szabo|quote=My proposal for bit gold is based on computing a string of bits from a string of challenge bits, using functions called variously "client puzzle function," "proof of work function," or "secure benchmark function.". The resulting string of bits is the proof of work.... The last-created string of bit gold provides the challenge bits for the next-created string.}}</ref> Like Bitcoin, ''Bit gold'' was a currency system where users would compete to solve a [[proof of work]] function, with solutions being cryptographically chained together and published via a distributed property title registry. A variant of ''Bit gold'', called ''Reusable Proofs of Work'', was implemented by Hal Finney.<ref name="bitgold"/>

In 2008, Satoshi Nakamoto published a [[Bitcoin_white_paper|paper]]<ref name="whitepaper">{{cite web
|last= Nakamoto
|first= Satoshi
|title= Bitcoin: A Peer-to-Peer Electronic Cash System
|url= http://www.cs.kent.edu/~JAVED/class-P2P12F/papers-2012/PAPER2012-p2p-bitcoin-satoshinakamoto.pdf
|accessdate = 14 December 2010
|date= 24 May 2009
|postscript=
}}</ref><ref>{{cite web
|url= http://article.gmane.org/gmane.comp.encryption.general/12588/
|title= Bitcoin P2P e-cash paper
}}</ref> on The Cryptography Mailing list at metzdowd.com<ref>[http://www.mail-archive.com/search?l=cryptography@metzdowd.com&q=from:%22Satoshi+Nakamoto%22 Satoshi's posts to Cryptography mailing list]</ref> describing the Bitcoin protocol.

The Bitcoin network came into existence on 3 January 2009 with the release of the first Bitcoin client, [[wxBitcoin]], and the issuance of the first Bitcoins.<ref>{{cite web |title=Block 0 – Bitcoin Block Explorer |url=http://blockexplorer.com/block/000000000019d6689c085ae165831e934ff763ae46a2a6c172b3f1b60a8ce26f }}</ref><ref>{{cite web |url=http://www.mail-archive.com/cryptography@metzdowd.com/msg10142.html |title=Bitcoin v0.1 released}}</ref><ref>{{cite web |url=http://sourceforge.net/news/?group_id=244765 |title=SourceForge.net: Bitcoin}}</ref>
A year after, the initial exchange rates for Bitcoin were set by individuals on the bitcointalk forums.{{Citation needed|date=October 2012}} The most significant transaction involved a 10,000 BTC pizza.<ref>{{cite web|title=The Rise and Fall of Bitcoin|url=http://www.wired.com/magazine/2011/11/mf_bitcoin/|publisher=Wired|accessdate=13 October 2012}}</ref>
Today, the majority of Bitcoin exchanges occur on the [[Bitstamp]] Bitcoin exchange.<ref>{{cite web | title = Exchange volume distribution | work = by market | publisher = [[Bitcoin Charts]] | date = April 15, 2014 | url = http://bitcoincharts.com/charts/volumepie/ | accessdate = 2014-04-15 }}</ref>

In 2011, Wikileaks,<ref>{{cite news
|last= Greenberg
|first= Andy
|url= http://blogs.forbes.com/andygreenberg/2011/06/14/wikileaks-asks-for-anonymous-bitcoin-donations/
|title= WikiLeaks Asks For Anonymous Bitcoin Donations – Andy Greenberg – The Firewall – Forbes
|publisher= Blogs.forbes.com
|date= 2011-06-14
|accessdate = 2011-06-22
}}</ref> [[Freenet]],<ref>{{cite web
|url= https://freenetproject.org/donate.html
|title= /donate
|publisher= The Freenet Project
|date=
|accessdate = 2011-06-22
}}</ref> Singularity Institute,<ref>[http://singinst.org/donate/ SIAI donation page]</ref> Internet Archive,<ref>[http://www.archive.org/donate/index.php Internet Archive donation page]</ref> Free Software Foundation<ref>[https://my.fsf.org/donate/other/ Other ways to donate]</ref> and others, began to accept donations in Bitcoin. The Electronic Frontier Foundation did so for a while but has since stopped, citing concerns about a lack of legal precedent about new currency systems, and because they "generally don't endorse any type of product or service."<ref>{{cite web
|url= https://www.eff.org/deeplinks/2011/06/eff-and-bitcoin
|title= EFF and Bitcoin | Electronic Frontier Foundation
|publisher= Eff.org
|date= 2011-06-14
|accessdate = 2011-06-22
}}</ref> Some small businesses had started to adopt Bitcoin. LaCie, a public company, accepts Bitcoin for its Wuala service.<ref>{{Cite web|url=http://www.wuala.com/en/bitcoin |title=Secure Online Storage – Backup. Sync. Share. Access Everywhere |publisher=Wuala |date= |accessdate = 2012-01-24}}</ref>

In 2012, BitPay reports of having over 1000 merchants accepting Bitcoin under its payment processing service.<ref>{{cite web|title=BitPay Signs 1,000 Merchants to Accept Bitcoin Payments|url=http://www.americanbanker.com/issues/177_176/bitpay-signs-1000-merchants-to-accept-bitcoin-payments-1052538-1.html|publisher=American Banker|accessdate=12 October 2012}}</ref>

==Administration==
Bitcoin is administered through a decentralized peer-to-peer network.<ref name="whitepaper"/> Cryptographic technologies and the peer-to-peer network of computing power enables users to make and verify irreversible, instant online Bitcoin payments, without an obligation to trust and use centralized banking institutions and authorities. Dispute resolution services are not made directly available. Instead it is left to the users to verify and trust the parties they are sending money to through their choice of methods.

Bitcoins are issued according to rules agreed to by the majority of the computing power within the Bitcoin network. The core rules describing the predictable issuance of Bitcoins to its verifying servers, a voluntary and competitive transaction fee system and the hard limit of no more than 21 million BTC issued in total.<ref name="whitepaper"/>

Bitcoin does not require a central bank, State,<ref>{{cite web
|url= http://spectrum.ieee.org/computing/software/bitcoin-the-cryptoanarchists-answer-to-cash/3
|title= Bitcoin: The Cryptoanarchists' Answer to Cash
|publisher= IEEE.org
|date= June 2012
|accessdate = 2012-06-05
}}</ref> or incorporated backers.

==Services==
:Main article: [[Wallet]]

Bitcoins are sent and received through software and websites called wallets. They send and confirm transactions to the network through Bitcoin addresses, the identifiers for users' Bitcoin wallets within the network.<ref name="whitepaper"/>

===Bitcoin addresses===
:Main article: [[Address]]

Payments are made to Bitcoin "addresses": human-readable strings of numbers and letters around 33 characters in length, always beginning with the digit 1 or 3, as in the example of ''31uEbMgunupShBVTewXjtqbBv5MndwfXhb''.

Users obtain new Bitcoin addresses from their Bitcoin software. Creating a new address can be a completely offline process and require no communication with the Bitcoin network.

===Transaction fees===
:Main article: [[Transaction fees]]
Transaction fees may be included with any transfer of Bitcoins. {{As of|2012}} many transactions are processed in a way which makes no charge for the transaction. For transactions which consume or produce many coins (and therefore have a large data size), a small transaction fee is usually expected.

===Confirmations===
:Main article: [[Confirmation]]

The network's software confirms a transaction when it records it in a block. Further blocks of transactions confirm it even further. After six confirmations/blocks, a transaction is confirmed beyond reasonable doubt.

The network must store the whole transaction history inside the blockchain, which grows constantly as new records are added and never removed. Nakamoto conceived that as the database became larger, users would desire applications for Bitcoin that didn't store the entire database on their computer. To enable this, the blockchain uses a [[merkle tree]] to organize the transaction records in such a way that client software can locally delete portions of its own database it knows it will never need, such as earlier transaction records of Bitcoins that have changed ownership multiple times.

==Economics==

===Initial distribution===

Bitcoin has no centralized issuing authority.<ref name="ars-06-08-11">
{{Cite news
|first= Thomas
|last= Lowenthal
|title= Bitcoin: inside the encrypted, peer-to-peer digital currency
|newspaper= Ars Technica
|date= 8 June 2011
|url= http://arstechnica.com/tech-policy/news/2011/06/bitcoin-inside-the-encrypted-peer-to-peer-currency.ars
}}</ref><ref>{{cite news
|author= Sponsored by
|url= http://www.economist.com/blogs/babbage/2011/06/virtual-currency
|title= Virtual currency: Bits and bob
|publisher= The Economist
|date=
|accessdate = 2011-06-22
}}</ref><ref>{{cite web
|last= Geere
|first= Duncan
|url= http://www.wired.co.uk/news/archive/2011-05/16/bitcoin-p2p-currency
|title= Peer-to-peer currency Bitcoin sidesteps financial institutions (Wired UK)
|publisher= Wired.co.uk
|date=
|accessdate = 2011-06-22
}}</ref> The network is programmed to increase the money supply as a geometric series until the total number of Bitcoins reaches 21 million BTC.<ref name="Quantitative Analysis of the Full Bitcoin Transaction Graph"/> {{As of|2012|10}} slightly over 10 million of the total 21 million BTC had been created; the current total number created is available online.<ref>{{cite web
|title= Total Number of Bitcoins in Existence
|url= http://blockexplorer.com/q/totalbc
|work= Bitcoin Block Explorer
|accessdate = 2012-10-03
}}</ref> By 2013 half of the total supply will have been generated, and by 2017, three-quarters will have been generated. To ensure sufficient granularity of the [[money supply]], clients can divide each BTC unit down to eight decimal places (a total of 2.1 × 1015 or 2.1 quadrillion units).<ref name="lwn">{{Cite news
|author= Nathan Willis
|date= 2010-11-10
|title= Bitcoin: Virtual money created by CPU cycles
|publisher= LWN.net
|url= http://lwn.net/Articles/414452/
}}</ref>

The network {{As of|2012|lc=on}} required over one million times more work for confirming a block and receiving an award (25 BTC {{As of|2012|2|lc=on}}) than when the first blocks were confirmed.
The difficulty is automatically adjusted every 2016 blocks based on the time taken to find the previous 2016 blocks such that one block is created roughly every 10 minutes.

Those who chose to put computational and electrical resources toward mining early on had a greater chance at receiving awards for block generations. This served to make available enough processing power to process blocks. Indeed, without miners there are no transactions and the Bitcoin economy comes to a halt.

===Exchange rate===
Prices fluctuate relative to goods and services more than more widely accepted currencies;
the price of a Bitcoin is not static.

In August 2012, 1 BTC traded at around $10.00 USD. Taking into account the total number of Bitcoins mined, the monetary base of the Bitcoin network stands at over 110 million USD.<ref>[http://www.bitcoinwatch.com/ http://www.bitcoinwatch.com/] Bitcoin statistics</ref>

== Security ==
:Main article: [[Weaknesses]]

In the history of bitcoin, there have been a few [[incidents]], caused by problematic as well as malicious transactions. In the worst such incident, and the only one of its type, a person was able to pretend that he had a practically infinite supply of bitcoins, for almost 9 hours.

Bitcoin relies, among other things, on [http://en.wikipedia.org/wiki/Public-key_cryptography public key cryptography] and thus may be vulnerable to [http://en.wikipedia.org/wiki/Elliptic_curve_cryptography#Quantum_computing_attacks quantum computing attacks] if and when practical quantum computers can be constructed.

If multiple different software packages, whose usage becomes widespread on the Bitcoin network, disagree on the protocol and the rules for transactions, this could potentially cause a fork in the block chain, with each faction of users being able to accept only their own version of the history of transactions. This could influence the price of bitcoins.

A global, organized campaign against the currency or the software could also influence the demand for bitcoins, and thus the exchange price.

==Bitcoin mining==
:Main article: [[Mining]]

Bitcoin mining nodes are responsible for managing the Bitcoin network.

Bitcoins are awarded to Bitcoin nodes known as "miners" for the solution to a difficult [[proof-of-work]] problem which confirms transactions and prevents double-spending. This incentive, as the Nakamoto white paper describes it, encourages "nodes to support the network, and provides a way to initially distribute coins into circulation, since no central authority issues them."<ref name="whitepaper" />

Nakamoto compared the generation of new coins by expending CPU time and electricity to gold miners expending resources to add gold to circulation.<ref name="whitepaper"/>

===Node operation===

The node software for the Bitcoin network is based on peer-to-peer networking, digital signatures and cryptographic proof to make and verify transactions. Nodes broadcast transactions to the network, which records them in a public record of all transactions, called the ''blockchain'', after validating them with a [[proof-of-work|proof-of-work system]].

Satoshi Nakamoto designed the first Bitcoin node and mining software<ref name="processors">{{Cite news
|last= Davis
|first= Joshua
|title= The Crypto-Currency
|url= http://www.wired.com/magazine/2011/11/mf_bitcoin/all
|accessdate = 11 November 2011
|newspaper= Wired Magazine
|date= 10 November 2011
}}</ref> and developed the majority of the first implementation, Bitcoind, from 2007 to mid-2010.<ref name="code_start">{{cite web
|url= https://bitcointalk.org/index.php?topic=13.msg46#msg46
|title= Questions about Bitcoin
|publisher= Bitcoin forum
|date= 2009-12-10
}}</ref>

Node implementations include core software such as Bitcoind/Bitcoin-Qt, [[libbitcoin]], [[cbitcoin]]<ref>{{Cite web|title=cbitcoin|url=https://github.com/MatthewLM/cbitcoin|accessdate=3 October 2012}}</ref> and [[BitCoinJ|bitcoinj]].<ref>{{cite web
|url= http://news.slashdot.org/story/11/03/23/0210207/Google-Engineer-Releases-Open-Source-Bitcoin-Client
|title= Google Engineer Releases Open Source Bitcoin Client
|author= angry tapir, timothy
|date= 23 March 2011
|publisher= Slashdot
|accessdate = 2011-05-18
}}</ref><ref>{{cite web
|url= http://www.javaworld.com/javaworld/jw-01-2012/120110-bitcoin-for-beginners-3.html?page=1
|title= Bitcoin for beginners: The BitcoinJ API
|author= Dirk Merkel
|date= 10 January 2012
|publisher= JavaWorld
|accessdate = 2012-08-03
}}</ref>

Every node in the Bitcoin network collects all the unacknowledged transactions it knows of in a file called a ''block'', which also contains a reference to the previous valid block known to that node. It then appends a [[nonce]] value to this previous block and computes the SHA-256 cryptographic hash of the block and the appended nonce value. The node repeats this process until it adds a nonce that allows for the generation of a hash with a value lower than a specified ''target''. Because computers cannot practically reverse the hash function, finding such a nonce is hard and requires on average a predictable amount of repetitious trial and error. This is where the ''[[proof-of-work]]'' concept comes in to play. When a node finds such a solution, it announces it to the rest of the network. Peers receiving the new solved block validate it by computing the hash and checking that it really starts with the given number of zero bits (i.e., that the hash is within the target). Then they accept it and add it to the chain.

===Mining rewards===
In addition to receiving the pending transactions confirmed in the block, a generating node adds a ''generate'' transaction, which awards new Bitcoins to the operator of the node that generated the block. The system sets the payout of this generated transaction according to its defined inflation schedule. The miner that generates a block also receives the fees that users have paid as an incentive to give particular transactions priority for faster confirmation.

The network never creates more than a 50 BTC reward per block and this amount will decrease over time towards zero, such that no more than 21 million BTC will ever exist.<ref name="lwn" /> As this payout decreases, the incentive for users to run block-generating nodes is intended to change to earning [[#Transaction fees|transaction fees]].

===Mining pools===
:Main article: [[Pooled mining]]

Bitcoin users often pool computational effort to increase the stability of the collected fees and subsidy they receive.<ref name="We Use Coins Mining">{{cite web|title=About Bitcoin Mining|url=http://www.weusecoins.com/mining-guide.php|publisher=We Use Coins|accessdate=18 October 2012}}</ref>

===Mining difficulty===
:Main article: [[Difficulty]]

In order to throttle the creation of blocks, the difficulty of generating new blocks is adjusted over time. If mining output increases or decreases, the difficulty increases or decreases accordingly.

The adjustment is done by changing the threshold that a hash is required to be less than. A lower threshold means fewer possible hashes can be accepted, and thus a higher degree of difficulty. The target rate of block generation is one block every 10 minutes, or 2016 blocks every two weeks. Bitcoin changes the difficulty of finding a valid block every 2016 blocks, using the difficulty that would have been most likely to cause the prior 2016 blocks to have taken two weeks to generate, according to the timestamps on the blocks. Technically, this is done by modeling the generation of Bitcoins as Poisson process. All nodes perform and enforce the same difficulty calculation.

Difficulty is intended as an automatic stabilizer allowing mining for Bitcoins to remain profitable in the long run for the most efficient miners, independently of the fluctuations in demand of Bitcoin in relation to other currencies.

===Mining hardware===
:Main article: [[Mining Hardware Comparison]]

Bitcoins used to be mined through Intel/AMD CPUs. {{As of | 2012}}, mining has gradually moved to [[GPU]] and [[FPGA]] hardware.<ref name="bitcoinmag-butterfly" /> [[Application-specific integrated circuit|ASIC]]-based hardware for Bitcoin mining has been announced by several manufacturers who intend to ship products from late 2012 to early 2013.<ref name="bitcoinmag-butterfly">{{Cite web|title=Bitpay Breaks Daily Volume Record with Butterfly ASIC mining release|url=http://bitcoinmagazine.net/bitpay-breaks-daily-volume-record-with-butterfly-asic-mining-release/|publisher=Bitcoin Magazine}}</ref>

==Concerns==

===As an investment===
Bitcoin describes itself as an experimental digital currency. Reuben Grinberg has noted that Bitcoin's supporters have argued that Bitcoin is neither a security or an investment because it fails to meet the criteria for either category.<ref name="grinberg">{{cite web | url=http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1817857 | title=Bitcoin: An Innovative Alternative Digital Currency | publisher=SSRN | date=9 December 2011 | accessdate=4 December 2012 | author=Grinberg, Reuben}}</ref> Although it is a virtual currency, some people see it as an investment<ref name="cnbc">{{cite web | url=http://www.cnbc.com/id/45030812/The_Pros_And_Cons_Of_Biting_on_Bitcoins | title=The Pros And Cons Of Biting on Bitcoins | publisher=CNBC | date=23 November 2011 | accessdate=4 December 2012 | author=Gustke, Constance}}</ref> or accuse it of being a form of investment fraud known as a Ponzi scheme.<ref>{{cite web |url=http://www.theregister.co.uk/2011/06/08/bitcoin_under_attack/ |title=US senators draw a bead on Bitcoin |last1=Chirgwin |first1=Richard |date=8 June 2011 |publisher=The Register |accessdate=14 November 2012}}</ref><ref>{{cite web |url=http://uk.reuters.com/article/2012/04/01/uk-traders-bitcoin-idUKBRE8300JL20120401 |title=Bitcoin, the City traders' anarchic new toy |last1=O'Leary |first1=Naomi |date=2 April 2012 |publisher=Reuters |accessdate=14 November 2012}}</ref> A report by the European Central Bank, using the U.S. Securities and Exchange Commission's definition of a Ponzi scheme, found that the use of bitcoins shares some characteristics with Ponzi schemes, but also has characteristics of its own which contradict several common aspects of Ponzi schemes.<ref name="ecbreport">{{cite web | url=http://www.ecb.europa.eu/pub/pdf/other/virtualcurrencyschemes201210en.pdf | title=Virtual Currency Schemes | publisher=European Central Bank | date=October 2012 | accessdate=4 December 2012}}</ref>

===Privacy===
Because transactions are broadcast to the entire network, they are inherently public. Unlike regular banking,<ref>{{cite web
|url= http://spectrum.ieee.org/computing/software/bitcoin-the-cryptoanarchists-answer-to-cash/0
|title= Bitcoin: The Cryptoanarchists' Answer to Cash
|publisher= IEEE.org
|date= June 2012
|accessdate = 2012-06-05
}}</ref> which preserves customer privacy by keeping transaction records private, loose transactional privacy is accomplished in Bitcoin by using many unique addresses for every wallet, while at the same time publishing all transactions. As an example, if Alice sends 123.45 BTC to Bob, the network creates a public record that allows anyone to see that 123.45 has been sent from one address to another. However, unless Alice or Bob make their ownership of these addresses known, it is difficult for anyone else to connect the transaction with them. However, if someone connects an address to a user at any point they could follow back a series of transactions as each participant likely knows who paid them and may disclose that information on request or under duress.

It can be difficult to associate Bitcoin identities with real-life identities.<ref name="An Analysis of Anonymity in the Bitcoin System">Fergal Reid and Martin Harrigan (24 July 2011). [http://anonymity-in-bitcoin.blogspot.com/2011/07/bitcoin-is-not-anonymous.html An Analysis of Anonymity in the Bitcoin System]. An Analysis of Anonymity in the Bitcoin System.</ref> This property makes Bitcoin transactions attractive to sellers of illegal products.<ref name="Forbes">Andy Greenberg (20 April 2011). [http://www.forbes.com/forbes/2011/0509/technology-psilocybin-bitcoins-gavin-andresen-crypto-currency.html Crypto Currency]. Forbes Magazine.</ref><ref>{{cite web
|last= Madrigal
|first= Alexis
|title= Libertarian Dream? A Site Where You Buy Drugs With Digital Dollars
|publisher= The Atlantic Monthly
|date= 2011-06-01
|url= http://www.theatlantic.com/technology/archive/2011/06/libertarian-dream-a-site-where-you-buy-drugs-with-digital-dollars/239776/
|accessdate = 2011-06-05
}}</ref>

===Illicit use===

====Cracking====
The cracking organization "LulzSec" accepted donations in Bitcoin, having said that the group "needs Bitcoin donations to continue their hacking efforts".<ref name="CNET">{{cite web
|last= Reisinger
|first= Don
|url= http://news.cnet.com/8301-13506_3-20070268-17/senators-target-bitcoin-currency-citing-drug-sales/
|title= Senators target Bitcoin currency, citing drug sales | The Digital Home – CNET News
|publisher= News.cnet.com
|date= 2011-06-09
|accessdate = 2011-06-22
}}</ref><ref>{{cite news
|last= Olson
|first= Parmy
|url= http://blogs.forbes.com/parmyolson/2011/06/06/lulzsec-hackers-posts-sony-dev-source-code-get-7k-donation/
|title= LulzSec Hackers Post Sony Dev. Source Code, Get $7K Donation – Parmy Olson – Disruptors – Forbes
|publisher= Blogs.forbes.com
|date= 6 June 2011
|accessdate = 2011-06-22
}}</ref>

====Silk Road====
[[Silk Road]] is an anonymous black market that uses only the Bitcoin.<ref name="npr-06-12-11">
{{Cite news
|url= http://www.npr.org/2011/06/12/137138008/silk-road-not-your-fathers-amazon-com
|date= 12 June 2011
|newspaper= NPR
|title= Silk Road: Not Your Father's Amazon.com
|author= Staff
}}</ref>

In a 2011 letter to Attorney General Eric Holder and the Drug Enforcement Administration, senators Charles Schumer of New York and Joe Manchin of West Virginia called for an investigation into Silk Road and the Bitcoin.<ref name="npr-06-12-11"/>
Schumer described the use of Bitcoins at Silk Road as a form of money laundering.<ref name="ars-06-08-11"/>

====Botnet mining====
In June 2011, Symantec warned about the possibility of botnets engaging in covert "mining" of Bitcoins,<ref>{{Cite web|author=Updated: 17 June 2011 | Translations available: 日本語 |url=http://www.symantec.com/connect/blogs/bitcoin-botnet-mining |title=Bitcoin Botnet Mining | Symantec Connect Community |publisher=Symantec.com |date=2011-06-17 |accessdate = 2012-01-24}}</ref><ref>{{Cite web|url=http://www.zdnet.com/blog/security/researchers-find-malware-rigged-with-bitcoin-miner/8934 |title=Researchers find malware rigged with Bitcoin miner |publisher=ZDNet |date=2011-06-29 |accessdate = 2012-01-24}}</ref> consuming computing cycles, using extra electricity and possibly increasing the temperature of the computer. Later that month, the Australian Broadcasting Corporation caught an employee using the company's servers to generate Bitcoins without permission.<ref>{{Cite web|url=http://thenextweb.com/au/2011/06/23/abc-employee-caught-mining-for-bitcoins-on-company-servers/ |title=ABC employee caught mining for Bitcoins on company servers |publisher=The Next Web |date=2011-06-23 |accessdate = 2012-01-24}}</ref> Some malware also uses the parallel processing capabilities of the GPUs built into many modern-day video cards.<ref>{{Cite news |url=http://www.theregister.co.uk/2011/08/16/gpu_bitcoin_brute_forcing/ |title=Malware mints virtual currency using victim's GPU |date=16 August 2011|first=Dan |last=Goodin }}</ref> In mid August 2011, Bitcoin miner botnets were found;<ref>{{Cite web|url=http://www.infosecurity-magazine.com/view/20211/researcher-discovers-distributed-bitcoin-cracking-trojan-malware/ |title=Infosecurity – Researcher discovers distributed bitcoin cracking trojan malware |publisher=Infosecurity-magazine.com |date=2011-08-19 |accessdate = 2012-01-24}}</ref> trojans infecting Mac OS X have also been uncovered.<ref>{{Cite web|url=http://www.techworld.com.au/article/405849/mac_os_x_trojan_steals_processing_power_produce_bitcoins |title=Mac OS X Trojan steals processing power to produce Bitcoins – sophos, security, malware, Intego – Vulnerabilities – Security |publisher=Techworld |date=2011-11-01 |accessdate = 2012-01-24}}</ref>

===Theft and fraud===
On 19 June 2011, a security breach of the Mt.Gox (an acronym for ''M''agic: ''T''he ''G''athering ''O''nline E''x''change, its original purpose) Bitcoin Exchange caused the price of a Bitcoin to briefly drop to US$0.01 on the Mt.Gox exchange (though it remained unaffected on other exchanges) after a hacker allegedly used credentials from a Mt.Gox auditor's compromised computer to illegally transfer a large number of Bitcoins to him- or herself and sell them all, creating a massive "ask" order at any price. Within minutes the price rebounded to over $15 before Mt.Gox shut down their exchange and canceled all trades that happened during the hacking period.<ref>[https://mtgox.com/press_release_20110630.html Clarification of Mt Gox Compromised Accounts and Major Bitcoin Sell-Off]</ref><ref>[http://www.youtube.com/watch?v=T1X6qQt9ONg YouTube. Bitcoin Report]</ref> The exchange rate of Bitcoins quickly returned to near pre-crash values.<ref name="mick">Jason Mick, 19 June 2011, [http://www.dailytech.com/Inside+the+MegaHack+of+Bitcoin+the+Full+Story/article21942.htm Inside the Mega-Hack of Bitcoin: the Full Story], DailyTech</ref><ref>Timothy B. Lee, 19 June 2011, [http://arstechnica.com/tech-policy/news/2011/06/bitcoin-price-plummets-on-compromised-exchange.ars Bitcoin prices plummet on hacked exchange], Ars Technica</ref><ref>Mark Karpeles, 20 June 2011, [https://support.mtgox.com/entries/20208066-huge-bitcoin-sell-off-due-to-a-compromised-account-rollback Huge Bitcoin sell off due to a compromised account – rollback], Mt.Gox Support</ref><ref name="register1">{{Cite news
|title= Bitcoin collapses on malicious trade – Mt Gox scrambling to raise the Titanic
|url= http://www.theregister.co.uk/2011/06/19/bitcoin_values_collapse_again/
|date= 2011-06-19
|author= Chirgwin, Richard
|publisher= The Register
}}</ref> Accounts with the equivalent of more than USD 8,750,000 were affected.<ref name="mick" />

In July 2011, The operator of Bitomat, the third largest Bitcoin exchange, announced that he lost access to his wallet.dat file with about 17,000 BitCoins (roughly equivalent to 220,000 USD at that time). He announced that he would sell the service for the missing amount, aiming to use funds from the sale to refund his customers.<ref>[http://siliconangle.com/blog/2011/08/01/third-largest-bitcoin-exchange-bitomat-lost-their-wallet-over-17000-bitcoins-missing/ Third Largest Bitcoin Exchange Bitomat Lost Their Wallet, Over 17,000 Bitcoins Missing]. SiliconAngle</ref>

In August 2011, MyBitcoin, one of popular Bitcoin transaction processors, declared that it was hacked, which resulted in it being shut down, with paying 49% on customer deposits, leaving more than 78,000 BitCoins (roughly equivalent to 800,000 USD at that time) unaccounted for.<ref>[http://betabeat.com/2011/08/mybitcoin-spokesman-finally-comes-forward-what-did-you-think-we-did-after-the-hack-we-got-shitfaced/ MyBitcoin Spokesman Finally Comes Forward: “What Did You Think We Did After the Hack? We Got Shitfaced”]. BetaBeat</ref><ref>[http://betabeat.com/2011/08/search-for-owners-of-mybitcoin-loses-steam/ Search for Owners of MyBitcoin Loses Steam]. BetaBeat</ref>

In early August 2012, a lawsuit was filed in San Francisco court against Bitcoinica, claiming about 460,000 USD from the company. Bitcoinica was hacked twice in 2012, which led to allegations of neglecting the safety of customers' money and cheating them out of withdrawal requests.<ref>[http://arstechnica.com/tech-policy/2012/08/bitcoinica-users-sue-for-460k-in-lost-bitcoins/ Bitcoinica users sue for $460k in lost Bitcoins]. Arstechnica</ref><ref>[http://spectrum.ieee.org/tech-talk/computing/networks/first-bitcoin-lawsuit-filed-in-san-francisco First Bitcoin Lawsuit Filed In San Francisco]. IEEE Spectrum</ref>

In late August 2012, Bitcoin Savings and Trust was shut down by the owner, allegedly leaving around $5.6 million in debts; this led to allegations of the operation being a Ponzi scheme.<ref>{{Cite web|title=Bitcoin ponzi scheme – investors lose $5 million USD in online hedge fund|url=http://rt.com/usa/news/investors-currency-digital-fund-868/|publisher=RT}}</ref><ref>{{Cite web|last=Jeffries|first=Adrianne|title=Suspected multi-million dollar Bitcoin pyramid scheme shuts down, investors revolt|url=http://www.theverge.com/2012/8/27/3271637/bitcoin-savings-trust-pyramid-scheme-shuts-down|publisher=The Verge}}</ref><ref>{{Cite web|last=Mick|first=Jason|title="Pirateat40" Makes Off $5.6M USD in BitCoins From Pyramid Scheme|url=http://www.dailytech.com/Pirateat40+Makes+Off+56M+USD+in+BitCoins+From+Pyramid+Scheme/article25538.htm|publisher=DailyTech}}</ref><ref>[http://pandodaily.com/2012/08/31/bitcoin-how-a-virtual-currency-became-real-with-a-5-6m-fraud/ Bitcoin: How a Virtual Currency Became Real with a $5.6M Fraud]. PandoDaily</ref> In September 2012, it was reported that U.S. Securities and Exchange Commission has started an investigation on the case.<ref>[http://blogs.telegraph.co.uk/technology/willardfoxton2/100007836/bitcoin-pirate-scandal-sec-steps-in-amid-allegations-that-the-whole-thing-was-a-ponzi-scheme/ Bitcoin 'Pirate' scandal: SEC steps in amid allegations that the whole thing was a Ponzi scheme ]. The Telegraph</ref>

In September 2012, Bitfloor Bitcoin exchange also reported being hacked, with 24,000 BitCoins (roughly equivalent to 250,000 USD) stolen. As a result, Bitfloor suspended operations.<ref>[http://www.bbc.co.uk/news/technology-19486695 Bitcoin theft causes Bitfloor exchange to go offline]. BBC</ref><ref>[http://www.theverge.com/2012/9/5/3293375/bitfloor-bitcoin-exchange-suspended-theft Bitcoin exchange BitFloor suspends operations after $250,000 theft Bitcoin exchange BitFloor suspends operations after $250,000 theft]. The Verge</ref> The same month, Bitfloor resumed operations, with its founder saying that he reported the theft to FBI, and that he is planning to repay the victims, though the time frame for such repayment is unclear.<ref>[http://www.pcworld.com/article/2010586/bitcoin-exchange-back-online-after-hack.html?tk=rel_news Bitcoin exchange back online after hack]. PCWorld</ref>

===Taxation===
In September 2012, the Intra-European Organization of Tax Administrations (IOTA), in Tbilisi, Georgia, held a workshop titled "Auditing Individuals and Legal Entities in the Use of e-Money." The workshop was attended by representatives from 23 countries.<ref name="BitCoin Tax issues Oct 2012">{{cite journal | title=2012 TNT 209-4 NEWS ANALYSIS: VIRTUAL CURRENCY: A NEW WORRY FOR TAX ADMINISTRATORS?. (Release Date: OCTOBER 17, 2012) (Doc 2012-21516) | author=Stewart, David D. and Soong Johnston, Stephanie D. | journal=Tax Notes Today | year=2012 | month=October 29 | volume=2012 TNT 209-4 | issue=2012 TNT 209-4}}</ref> Jerry Taylor, IOTA's technical taxation expert, said, "There's an awful lot happening on the Internet environment which is fascinating at the moment and introducing new challenges for auditors when it comes to virtual currency."<ref name="BitCoin Tax issues Oct 2012">{{cite journal | title=2012 TNT 209-4 NEWS ANALYSIS: VIRTUAL CURRENCY: A NEW WORRY FOR TAX ADMINISTRATORS?. (Release Date: OCTOBER 17, 2012) (Doc 2012-21516) | author=Stewart, David D. and Soong Johnston, Stephanie D. | journal=Tax Notes Today | year=2012 | month=October 29 | volume=2012 TNT 209-4 | issue=2012 TNT 209-4}}</ref> Bitcoin was mentioned during the workshop.<ref name="BitCoin Tax issues Oct 2012">{{cite journal | title=2012 TNT 209-4 NEWS ANALYSIS: VIRTUAL CURRENCY: A NEW WORRY FOR TAX ADMINISTRATORS?. (Release Date: OCTOBER 17, 2012) (Doc 2012-21516) | author=Stewart, David D. and Soong Johnston, Stephanie D. | journal=Tax Notes Today | year=2012 | month=October 29 | volume=2012 TNT 209-4 | issue=2012 TNT 209-4}}</ref>

Matthew Elias, founder of the [[Cryptocurrency Legal Advocacy Group]] (CLAG) published "Staying Between the Lines: A Survey of U.S. Income Taxation and its Ramifications on Cryptocurrencies", which discusses "the taxability of cryptocurrencies such as bitcoin."<ref name="BitCoin Tax issues Oct 2012">{{cite journal | title=2012 TNT 209-4 NEWS ANALYSIS: VIRTUAL CURRENCY: A NEW WORRY FOR TAX ADMINISTRATORS?. (Release Date: OCTOBER 17, 2012) (Doc 2012-21516) | author=Stewart, David D. and Soong Johnston, Stephanie D. | journal=Tax Notes Today | year=2012 | month=October 29 | volume=2012 TNT 209-4 | issue=2012 TNT 209-4}}</ref> CLAG "stressed the importance for taxpayers to determine on their own whether taxes are due on a bitcoin-related transaction based on whether one has "experienced a realization event."<ref name="BitCoin Tax issues Oct 2012">{{cite journal | title=2012 TNT 209-4 NEWS ANALYSIS: VIRTUAL CURRENCY: A NEW WORRY FOR TAX ADMINISTRATORS?. (Release Date: OCTOBER 17, 2012) (Doc 2012-21516) | author=Stewart, David D. and Soong Johnston, Stephanie D. | journal=Tax Notes Today | year=2012 | month=October 29 | volume=2012 TNT 209-4 | issue=2012 TNT 209-4}}</ref> Such examples are "when a taxpayer has provided a service in exchange for bitcoins, a realization event has probably occurred, and any gain or loss would likely be calculated using fair market values for the service provided."<ref name="BitCoin Tax issues Oct 2012">{{cite journal | title=2012 TNT 209-4 NEWS ANALYSIS: VIRTUAL CURRENCY: A NEW WORRY FOR TAX ADMINISTRATORS?. (Release Date: OCTOBER 17, 2012) (Doc 2012-21516) | author=Stewart, David D. and Soong Johnston, Stephanie D. | journal=Tax Notes Today | year=2012 | month=October 29 | volume=2012 TNT 209-4 | issue=2012 TNT 209-4}}</ref>

[[Peter Vessenes]], [[Bitcoin Foundation|Bitcoin Foundation's]] executive director, said, since the foundation is trying to pay for everything in bitcoin, including salaries, "How do we W-2 someone for their bitcoins? Do we mark-to-market every time a transfer happens? Payroll companies cringe."<ref name="BitCoin Tax issues Oct 2012">{{cite journal | title=2012 TNT 209-4 NEWS ANALYSIS: VIRTUAL CURRENCY: A NEW WORRY FOR TAX ADMINISTRATORS?. (Release Date: OCTOBER 17, 2012) (Doc 2012-21516) | author=Stewart, David D. and Soong Johnston, Stephanie D. | journal=Tax Notes Today | year=2012 | month=October 29 | volume=2012 TNT 209-4 | issue=2012 TNT 209-4}}</ref> The Bitcoin Foundation hopes "to push for solid guidance about its legal and tax treatment." [[Patrick Murck]], legal counsel for the Bitcoin Foundation, said he would like "to help regulators understand the technology better so they can make better decisions."<ref name="BitCoin Tax issues Oct 2012">{{cite journal | title=2012 TNT 209-4 NEWS ANALYSIS: VIRTUAL CURRENCY: A NEW WORRY FOR TAX ADMINISTRATORS?. (Release Date: OCTOBER 17, 2012) (Doc 2012-21516) | author=Stewart, David D. and Soong Johnston, Stephanie D. | journal=Tax Notes Today | year=2012 | month=October 29 | volume=2012 TNT 209-4 | issue=2012 TNT 209-4}}</ref> Murck said, "Bitcoin has the potential to become much more than a niche currency, but it needs the guidance and understanding of regulators." and "The full potential of bitcoin could be realized through clearer guidelines and a better understanding by financial and tax regulators." and "Part of making that happen is to talk to regulators, the IRS, and tax professionals and helping them understand that bitcoin is not this nefarious thing, it's just software, it's a community, and there's nothing inherently nefarious about either of those things."<ref name="BitCoin Tax issues Oct 2012">{{cite journal | title=2012 TNT 209-4 NEWS ANALYSIS: VIRTUAL CURRENCY: A NEW WORRY FOR TAX ADMINISTRATORS?. (Release Date: OCTOBER 17, 2012) (Doc 2012-21516) | author=Stewart, David D. and Soong Johnston, Stephanie D. | journal=Tax Notes Today | year=2012 | month=October 29 | volume=2012 TNT 209-4 | issue=2012 TNT 209-4}}</ref>

==See Also==
* [[Introduction]]
* [[Getting started]]
* [[Using_Bitcoin|Detailed tutorial]]
* [[FAQ]]

==References==
<references />

[[Category:Digital currencies]]

Bitcoin

2014-04-21T16:12:42Z

Benbest: update

'''Bitcoin''' is a decentralized [[digital currency]] created by developer [[Satoshi Nakamoto]]. It does not rely on a central server to process transactions or store funds. There are a maximum of 2,100,000,000,000,000 Bitcoin elements (called satoshis), currently most commonly measured in units of 100,000,000 known as BTC.

{{As of|April 2014}}, it is the most widely used alternative currency,<ref name="Quantitative Analysis of the Full Bitcoin Transaction Graph">{{cite web|title=Quantitative Analysis of the Full Bitcoin Transaction Graph|url=http://eprint.iacr.org/2012/584.pdf|publisher=Cryptology ePrint Archive|accessdate=18 October 2012|author=Ron Dorit|coauthors=Adi Shamir|page=17|quote=The Bitcoin system is the best known and most widely used alternative payment scheme,...}}</ref><ref name="Mt.Gox data">{{Cite web|title=Mt.Gox data|url=http://bitcoincharts.com/markets/mtgoxUSD.html|publisher=Bitcoincharts}}</ref> now with the total market cap over 6 billion US dollars<ref>{{cite web|title=Market Capitalization|url=https://blockchain.info/charts/market-cap|publisher= [[BlockChain.info]] |accessdate=21 April 2014}}</ref>.

Bitcoin has no central issuer; instead, the peer-to-peer network regulates Bitcoins, transactions and issuance according to consensus in network software.
Bitcoins are issued to various nodes that verify transactions through computing power;
it is established that there will be a limited and scheduled release of no more than 21 million BTC worth of coins, which will be fully issued by the year 2140.

Internationally, Bitcoins can be exchanged and managed through various websites and [[software]] along with physical banknotes and coins.<ref>{{Cite web|title=Physical Bitcoins by Casascius|url=https://www.casascius.com/|publisher=Casascius Coins|accessdate=29 September 2012}}</ref><ref>{{Cite web|title=Bitbills|url=http://www.bitbills.com/|publisher=Bitbills|accessdate=29 September 2012}}</ref>

==History==
:Main article: [[History]]

A cryptographic system for untraceable payments was first described by David Chaum in 1982.<ref>[http://blog.koehntopp.de/uploads/Chaum.BlindSigForPayment.1982.PDF David Chaum, Blind signatures for untraceable payments], Advances in Cryptology - Crypto '82, Springer-Verlag (1983), 199–203.</ref> In 1990 Chaum extended this system to create the first cryptographic anonymous electronic cash system.,<ref>{{cite journal|journal=Lecture Notes in Computer Science|last1=Chaum|first1=David|last2=Fiat|first2=Amos|last3=Naor|first3=Moni|title=Untraceable Electronic Cash|url=http://blog.koehntopp.de/uploads/chaum_fiat_naor_ecash.pdf}}</ref> which became known as ecash.
<ref>{{cite web|url=http://www.wired.com/wired/archive/2.12/emoney.html|publisher=Wired|title=E-Money (That's What I Want)|date=1994–2012|author=Steven Levy}}</ref> In 1998 Wei Dai published a description of an anonymous, distributed electronic cash system which he called "b-money".<ref>{{cite web|title=B-Money|url=http://www.weidai.com/bmoney.txt|author=Wei Dai|year=1998}}</ref> Around the same time, Nick Szabo created ''bit gold''.<ref>{{cite web|url=http://spectrum.ieee.org/computing/software/bitcoin-the-cryptoanarchists-answer-to-cash/0|title=Bitcoin: The Cryptoanarchists’ Answer to Cash|publisher=IEEE Spectrum|quote=Around the same time, Nick Szabo, a computer scientist who now blogs about law and the history of money, was one of the first to imagine a new digital currency from the ground up. Although many consider his scheme, which he calls “bit gold,” to be a precursor to Bitcoin}}</ref><ref name="bitgold">{{cite web|title=Bit gold|url=http://unenumerated.blogspot.co.uk/2005/12/bit-gold.html|author=Nick Szabo|quote=My proposal for bit gold is based on computing a string of bits from a string of challenge bits, using functions called variously "client puzzle function," "proof of work function," or "secure benchmark function.". The resulting string of bits is the proof of work.... The last-created string of bit gold provides the challenge bits for the next-created string.}}</ref> Like Bitcoin, ''Bit gold'' was a currency system where users would compete to solve a [[proof of work]] function, with solutions being cryptographically chained together and published via a distributed property title registry. A variant of ''Bit gold'', called ''Reusable Proofs of Work'', was implemented by Hal Finney.<ref name="bitgold"/>

In 2008, Satoshi Nakamoto published a [[Bitcoin_white_paper|paper]]<ref name="whitepaper">{{cite web
|last= Nakamoto
|first= Satoshi
|title= Bitcoin: A Peer-to-Peer Electronic Cash System
|url= http://www.cs.kent.edu/~JAVED/class-P2P12F/papers-2012/PAPER2012-p2p-bitcoin-satoshinakamoto.pdf
|accessdate = 14 December 2010
|date= 24 May 2009
|postscript=
}}</ref><ref>{{cite web
|url= http://article.gmane.org/gmane.comp.encryption.general/12588/
|title= Bitcoin P2P e-cash paper
}}</ref> on The Cryptography Mailing list at metzdowd.com<ref>[http://www.mail-archive.com/search?l=cryptography@metzdowd.com&q=from:%22Satoshi+Nakamoto%22 Satoshi's posts to Cryptography mailing list]</ref> describing the Bitcoin protocol.

The Bitcoin network came into existence on 3 January 2009 with the release of the first Bitcoin client, [[wxBitcoin]], and the issuance of the first Bitcoins.<ref>{{cite web |title=Block 0 – Bitcoin Block Explorer |url=http://blockexplorer.com/block/000000000019d6689c085ae165831e934ff763ae46a2a6c172b3f1b60a8ce26f }}</ref><ref>{{cite web |url=http://www.mail-archive.com/cryptography@metzdowd.com/msg10142.html |title=Bitcoin v0.1 released}}</ref><ref>{{cite web |url=http://sourceforge.net/news/?group_id=244765 |title=SourceForge.net: Bitcoin}}</ref>
A year after, the initial exchange rates for Bitcoin were set by individuals on the bitcointalk forums.{{Citation needed|date=October 2012}} The most significant transaction involved a 10,000 BTC pizza.<ref>{{cite web|title=The Rise and Fall of Bitcoin|url=http://www.wired.com/magazine/2011/11/mf_bitcoin/|publisher=Wired|accessdate=13 October 2012}}</ref>
Today, the majority of Bitcoin exchanges occur on the [[Bitstamp]] Bitcoin exchange.<ref>{{cite web | title = Exchange volume distribution | work = by market | publisher = [[Bitcoin Charts]] | date = April 15, 2014 | url = http://bitcoincharts.com/charts/volumepie/ | accessdate = 2014-04-15 }}</ref>

In 2011, Wikileaks,<ref>{{cite news
|last= Greenberg
|first= Andy
|url= http://blogs.forbes.com/andygreenberg/2011/06/14/wikileaks-asks-for-anonymous-bitcoin-donations/
|title= WikiLeaks Asks For Anonymous Bitcoin Donations – Andy Greenberg – The Firewall – Forbes
|publisher= Blogs.forbes.com
|date= 2011-06-14
|accessdate = 2011-06-22
}}</ref> [[Freenet]],<ref>{{cite web
|url= https://freenetproject.org/donate.html
|title= /donate
|publisher= The Freenet Project
|date=
|accessdate = 2011-06-22
}}</ref> Singularity Institute,<ref>[http://singinst.org/donate/ SIAI donation page]</ref> Internet Archive,<ref>[http://www.archive.org/donate/index.php Internet Archive donation page]</ref> Free Software Foundation<ref>[https://my.fsf.org/donate/other/ Other ways to donate]</ref> and others, began to accept donations in Bitcoin. The Electronic Frontier Foundation did so for a while but has since stopped, citing concerns about a lack of legal precedent about new currency systems, and because they "generally don't endorse any type of product or service."<ref>{{cite web
|url= https://www.eff.org/deeplinks/2011/06/eff-and-bitcoin
|title= EFF and Bitcoin | Electronic Frontier Foundation
|publisher= Eff.org
|date= 2011-06-14
|accessdate = 2011-06-22
}}</ref> Some small businesses had started to adopt Bitcoin. LaCie, a public company, accepts Bitcoin for its Wuala service.<ref>{{Cite web|url=http://www.wuala.com/en/bitcoin |title=Secure Online Storage – Backup. Sync. Share. Access Everywhere |publisher=Wuala |date= |accessdate = 2012-01-24}}</ref>

In 2012, BitPay reports of having over 1000 merchants accepting Bitcoin under its payment processing service.<ref>{{cite web|title=BitPay Signs 1,000 Merchants to Accept Bitcoin Payments|url=http://www.americanbanker.com/issues/177_176/bitpay-signs-1000-merchants-to-accept-bitcoin-payments-1052538-1.html|publisher=American Banker|accessdate=12 October 2012}}</ref>

==Administration==
Bitcoin is administered through a decentralized peer-to-peer network.<ref name="whitepaper"/> Cryptographic technologies and the peer-to-peer network of computing power enables users to make and verify irreversible, instant online Bitcoin payments, without an obligation to trust and use centralized banking institutions and authorities. Dispute resolution services are not made directly available. Instead it is left to the users to verify and trust the parties they are sending money to through their choice of methods.

Bitcoins are issued according to rules agreed to by the majority of the computing power within the Bitcoin network. The core rules describing the predictable issuance of Bitcoins to its verifying servers, a voluntary and competitive transaction fee system and the hard limit of no more than 21 million BTC issued in total.<ref name="whitepaper"/>

Bitcoin does not require a central bank, State,<ref>{{cite web
|url= http://spectrum.ieee.org/computing/software/bitcoin-the-cryptoanarchists-answer-to-cash/3
|title= Bitcoin: The Cryptoanarchists' Answer to Cash
|publisher= IEEE.org
|date= June 2012
|accessdate = 2012-06-05
}}</ref> or incorporated backers.

==Services==
:Main article: [[Wallet]]

Bitcoins are sent and received through software and websites called wallets. They send and confirm transactions to the network through Bitcoin addresses, the identifiers for users' Bitcoin wallets within the network.<ref name="whitepaper"/>

===Bitcoin addresses===
:Main article: [[Address]]

Payments are made to Bitcoin "addresses": human-readable strings of numbers and letters around 33 characters in length, always beginning with the digit 1 or 3, as in the example of ''31uEbMgunupShBVTewXjtqbBv5MndwfXhb''.

Users obtain new Bitcoin addresses from their Bitcoin software. Creating a new address can be a completely offline process and require no communication with the Bitcoin network.

===Transaction fees===
:Main article: [[Transaction fees]]
Transaction fees may be included with any transfer of Bitcoins. {{As of|2012}} many transactions are processed in a way which makes no charge for the transaction. For transactions which consume or produce many coins (and therefore have a large data size), a small transaction fee is usually expected.

===Confirmations===
:Main article: [[Confirmation]]

The network's software confirms a transaction when it records it in a block. Further blocks of transactions confirm it even further. After six confirmations/blocks, a transaction is confirmed beyond reasonable doubt.

The network must store the whole transaction history inside the blockchain, which grows constantly as new records are added and never removed. Nakamoto conceived that as the database became larger, users would desire applications for Bitcoin that didn't store the entire database on their computer. To enable this, the blockchain uses a [[merkle tree]] to organize the transaction records in such a way that client software can locally delete portions of its own database it knows it will never need, such as earlier transaction records of Bitcoins that have changed ownership multiple times.

==Economics==

===Initial distribution===

Bitcoin has no centralized issuing authority.<ref name="ars-06-08-11">
{{Cite news
|first= Thomas
|last= Lowenthal
|title= Bitcoin: inside the encrypted, peer-to-peer digital currency
|newspaper= Ars Technica
|date= 8 June 2011
|url= http://arstechnica.com/tech-policy/news/2011/06/bitcoin-inside-the-encrypted-peer-to-peer-currency.ars
}}</ref><ref>{{cite news
|author= Sponsored by
|url= http://www.economist.com/blogs/babbage/2011/06/virtual-currency
|title= Virtual currency: Bits and bob
|publisher= The Economist
|date=
|accessdate = 2011-06-22
}}</ref><ref>{{cite web
|last= Geere
|first= Duncan
|url= http://www.wired.co.uk/news/archive/2011-05/16/bitcoin-p2p-currency
|title= Peer-to-peer currency Bitcoin sidesteps financial institutions (Wired UK)
|publisher= Wired.co.uk
|date=
|accessdate = 2011-06-22
}}</ref> The network is programmed to increase the money supply as a geometric series until the total number of Bitcoins reaches 21 million BTC.<ref name="Quantitative Analysis of the Full Bitcoin Transaction Graph"/> {{As of|2012|10}} slightly over 10 million of the total 21 million BTC had been created; the current total number created is available online.<ref>{{cite web
|title= Total Number of Bitcoins in Existence
|url= http://blockexplorer.com/q/totalbc
|work= Bitcoin Block Explorer
|accessdate = 2012-10-03
}}</ref> By 2013 half of the total supply will have been generated, and by 2017, three-quarters will have been generated. To ensure sufficient granularity of the [[money supply]], clients can divide each BTC unit down to eight decimal places (a total of 2.1 × 1015 or 2.1 quadrillion units).<ref name="lwn">{{Cite news
|author= Nathan Willis
|date= 2010-11-10
|title= Bitcoin: Virtual money created by CPU cycles
|publisher= LWN.net
|url= http://lwn.net/Articles/414452/
}}</ref>

The network {{As of|2012|lc=on}} required over one million times more work for confirming a block and receiving an award (25 BTC {{As of|2012|2|lc=on}}) than when the first blocks were confirmed.
The difficulty is automatically adjusted every 2016 blocks based on the time taken to find the previous 2016 blocks such that one block is created roughly every 10 minutes.

Those who chose to put computational and electrical resources toward mining early on had a greater chance at receiving awards for block generations. This served to make available enough processing power to process blocks. Indeed, without miners there are no transactions and the Bitcoin economy comes to a halt.

===Exchange rate===
Prices fluctuate relative to goods and services more than more widely accepted currencies;
the price of a Bitcoin is not static.

In August 2012, 1 BTC traded at around $10.00 USD. Taking into account the total number of Bitcoins mined, the monetary base of the Bitcoin network stands at over 110 million USD.<ref>[http://www.bitcoinwatch.com/ http://www.bitcoinwatch.com/] Bitcoin statistics</ref>

== Security ==
:Main article: [[Weaknesses]]

In the history of bitcoin, there have been a few [[incidents]], caused by problematic as well as malicious transactions. In the worst such incident, and the only one of its type, a person was able to pretend that he had a practically infinite supply of bitcoins, for almost 9 hours.

Bitcoin relies, among other things, on [http://en.wikipedia.org/wiki/Public-key_cryptography public key cryptography] and thus may be vulnerable to [http://en.wikipedia.org/wiki/Elliptic_curve_cryptography#Quantum_computing_attacks quantum computing attacks] if and when practical quantum computers can be constructed.

If multiple different software packages, whose usage becomes widespread on the Bitcoin network, disagree on the protocol and the rules for transactions, this could potentially cause a fork in the block chain, with each faction of users being able to accept only their own version of the history of transactions. This could influence the price of bitcoins.

A global, organized campaign against the currency or the software could also influence the demand for bitcoins, and thus the exchange price.

==Bitcoin mining==
:Main article: [[Mining]]

Bitcoin mining nodes are responsible for managing the Bitcoin network.

Bitcoins are awarded to Bitcoin nodes known as "miners" for the solution to a difficult [[proof-of-work]] problem which confirms transactions and prevents double-spending. This incentive, as the Nakamoto white paper describes it, encourages "nodes to support the network, and provides a way to initially distribute coins into circulation, since no central authority issues them."<ref name="whitepaper" />

Nakamoto compared the generation of new coins by expending CPU time and electricity to gold miners expending resources to add gold to circulation.<ref name="whitepaper"/>

===Node operation===

The node software for the Bitcoin network is based on peer-to-peer networking, digital signatures and cryptographic proof to make and verify transactions. Nodes broadcast transactions to the network, which records them in a public record of all transactions, called the ''blockchain'', after validating them with a [[proof-of-work|proof-of-work system]].

Satoshi Nakamoto designed the first Bitcoin node and mining software<ref name="processors">{{Cite news
|last= Davis
|first= Joshua
|title= The Crypto-Currency
|url= http://www.wired.com/magazine/2011/11/mf_bitcoin/all
|accessdate = 11 November 2011
|newspaper= Wired Magazine
|date= 10 November 2011
}}</ref> and developed the majority of the first implementation, Bitcoind, from 2007 to mid-2010.<ref name="code_start">{{cite web
|url= https://bitcointalk.org/index.php?topic=13.msg46#msg46
|title= Questions about Bitcoin
|publisher= Bitcoin forum
|date= 2009-12-10
}}</ref>

Node implementations include core software such as Bitcoind/Bitcoin-Qt, [[libbitcoin]], [[cbitcoin]]<ref>{{Cite web|title=cbitcoin|url=https://github.com/MatthewLM/cbitcoin|accessdate=3 October 2012}}</ref> and [[BitCoinJ|bitcoinj]].<ref>{{cite web
|url= http://news.slashdot.org/story/11/03/23/0210207/Google-Engineer-Releases-Open-Source-Bitcoin-Client
|title= Google Engineer Releases Open Source Bitcoin Client
|author= angry tapir, timothy
|date= 23 March 2011
|publisher= Slashdot
|accessdate = 2011-05-18
}}</ref><ref>{{cite web
|url= http://www.javaworld.com/javaworld/jw-01-2012/120110-bitcoin-for-beginners-3.html?page=1
|title= Bitcoin for beginners: The BitcoinJ API
|author= Dirk Merkel
|date= 10 January 2012
|publisher= JavaWorld
|accessdate = 2012-08-03
}}</ref>

Every node in the Bitcoin network collects all the unacknowledged transactions it knows of in a file called a ''block'', which also contains a reference to the previous valid block known to that node. It then appends a [[nonce]] value to this previous block and computes the SHA-256 cryptographic hash of the block and the appended nonce value. The node repeats this process until it adds a nonce that allows for the generation of a hash with a value lower than a specified ''target''. Because computers cannot practically reverse the hash function, finding such a nonce is hard and requires on average a predictable amount of repetitious trial and error. This is where the ''[[proof-of-work]]'' concept comes in to play. When a node finds such a solution, it announces it to the rest of the network. Peers receiving the new solved block validate it by computing the hash and checking that it really starts with the given number of zero bits (i.e., that the hash is within the target). Then they accept it and add it to the chain.

===Mining rewards===
In addition to receiving the pending transactions confirmed in the block, a generating node adds a ''generate'' transaction, which awards new Bitcoins to the operator of the node that generated the block. The system sets the payout of this generated transaction according to its defined inflation schedule. The miner that generates a block also receives the fees that users have paid as an incentive to give particular transactions priority for faster confirmation.

The network never creates more than a 50 BTC reward per block and this amount will decrease over time towards zero, such that no more than 21 million BTC will ever exist.<ref name="lwn" /> As this payout decreases, the incentive for users to run block-generating nodes is intended to change to earning [[#Transaction fees|transaction fees]].

===Mining pools===
:Main article: [[Pooled mining]]

Bitcoin users often pool computational effort to increase the stability of the collected fees and subsidy they receive.<ref name="We Use Coins Mining">{{cite web|title=About Bitcoin Mining|url=http://www.weusecoins.com/mining-guide.php|publisher=We Use Coins|accessdate=18 October 2012}}</ref>

===Mining difficulty===
:Main article: [[Difficulty]]

In order to throttle the creation of blocks, the difficulty of generating new blocks is adjusted over time. If mining output increases or decreases, the difficulty increases or decreases accordingly.

The adjustment is done by changing the threshold that a hash is required to be less than. A lower threshold means fewer possible hashes can be accepted, and thus a higher degree of difficulty. The target rate of block generation is one block every 10 minutes, or 2016 blocks every two weeks. Bitcoin changes the difficulty of finding a valid block every 2016 blocks, using the difficulty that would have been most likely to cause the prior 2016 blocks to have taken two weeks to generate, according to the timestamps on the blocks. Technically, this is done by modeling the generation of Bitcoins as Poisson process. All nodes perform and enforce the same difficulty calculation.

Difficulty is intended as an automatic stabilizer allowing mining for Bitcoins to remain profitable in the long run for the most efficient miners, independently of the fluctuations in demand of Bitcoin in relation to other currencies.

===Mining hardware===
:Main article: [[Mining Hardware Comparison]]

Bitcoins used to be mined through Intel/AMD CPUs. {{As of | 2012}}, mining has gradually moved to [[GPU]] and [[FPGA]] hardware.<ref name="bitcoinmag-butterfly" /> [[Application-specific integrated circuit|ASIC]]-based hardware for Bitcoin mining has been announced by several manufacturers who intend to ship products from late 2012 to early 2013.<ref name="bitcoinmag-butterfly">{{Cite web|title=Bitpay Breaks Daily Volume Record with Butterfly ASIC mining release|url=http://bitcoinmagazine.net/bitpay-breaks-daily-volume-record-with-butterfly-asic-mining-release/|publisher=Bitcoin Magazine}}</ref>

==Concerns==

===As an investment===
Bitcoin describes itself as an experimental digital currency. Reuben Grinberg has noted that Bitcoin's supporters have argued that Bitcoin is neither a security or an investment because it fails to meet the criteria for either category.<ref name="grinberg">{{cite web | url=http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1817857 | title=Bitcoin: An Innovative Alternative Digital Currency | publisher=SSRN | date=9 December 2011 | accessdate=4 December 2012 | author=Grinberg, Reuben}}</ref> Although it is a virtual currency, some people see it as an investment<ref name="cnbc">{{cite web | url=http://www.cnbc.com/id/45030812/The_Pros_And_Cons_Of_Biting_on_Bitcoins | title=The Pros And Cons Of Biting on Bitcoins | publisher=CNBC | date=23 November 2011 | accessdate=4 December 2012 | author=Gustke, Constance}}</ref> or accuse it of being a form of investment fraud known as a Ponzi scheme.<ref>{{cite web |url=http://www.theregister.co.uk/2011/06/08/bitcoin_under_attack/ |title=US senators draw a bead on Bitcoin |last1=Chirgwin |first1=Richard |date=8 June 2011 |publisher=The Register |accessdate=14 November 2012}}</ref><ref>{{cite web |url=http://uk.reuters.com/article/2012/04/01/uk-traders-bitcoin-idUKBRE8300JL20120401 |title=Bitcoin, the City traders' anarchic new toy |last1=O'Leary |first1=Naomi |date=2 April 2012 |publisher=Reuters |accessdate=14 November 2012}}</ref> A report by the European Central Bank, using the U.S. Securities and Exchange Commission's definition of a Ponzi scheme, found that the use of bitcoins shares some characteristics with Ponzi schemes, but also has characteristics of its own which contradict several common aspects of Ponzi schemes.<ref name="ecbreport">{{cite web | url=http://www.ecb.europa.eu/pub/pdf/other/virtualcurrencyschemes201210en.pdf | title=Virtual Currency Schemes | publisher=European Central Bank | date=October 2012 | accessdate=4 December 2012}}</ref>

===Privacy===
Because transactions are broadcast to the entire network, they are inherently public. Unlike regular banking,<ref>{{cite web
|url= http://spectrum.ieee.org/computing/software/bitcoin-the-cryptoanarchists-answer-to-cash/0
|title= Bitcoin: The Cryptoanarchists' Answer to Cash
|publisher= IEEE.org
|date= June 2012
|accessdate = 2012-06-05
}}</ref> which preserves customer privacy by keeping transaction records private, loose transactional privacy is accomplished in Bitcoin by using many unique addresses for every wallet, while at the same time publishing all transactions. As an example, if Alice sends 123.45 BTC to Bob, the network creates a public record that allows anyone to see that 123.45 has been sent from one address to another. However, unless Alice or Bob make their ownership of these addresses known, it is difficult for anyone else to connect the transaction with them. However, if someone connects an address to a user at any point they could follow back a series of transactions as each participant likely knows who paid them and may disclose that information on request or under duress.

It can be difficult to associate Bitcoin identities with real-life identities.<ref name="An Analysis of Anonymity in the Bitcoin System">Fergal Reid and Martin Harrigan (24 July 2011). [http://anonymity-in-bitcoin.blogspot.com/2011/07/bitcoin-is-not-anonymous.html An Analysis of Anonymity in the Bitcoin System]. An Analysis of Anonymity in the Bitcoin System.</ref> This property makes Bitcoin transactions attractive to sellers of illegal products.<ref name="Forbes">Andy Greenberg (20 April 2011). [http://www.forbes.com/forbes/2011/0509/technology-psilocybin-bitcoins-gavin-andresen-crypto-currency.html Crypto Currency]. Forbes Magazine.</ref><ref>{{cite web
|last= Madrigal
|first= Alexis
|title= Libertarian Dream? A Site Where You Buy Drugs With Digital Dollars
|publisher= The Atlantic Monthly
|date= 2011-06-01
|url= http://www.theatlantic.com/technology/archive/2011/06/libertarian-dream-a-site-where-you-buy-drugs-with-digital-dollars/239776/
|accessdate = 2011-06-05
}}</ref>

===Illicit use===

====Cracking====
The cracking organization "LulzSec" accepted donations in Bitcoin, having said that the group "needs Bitcoin donations to continue their hacking efforts".<ref name="CNET">{{cite web
|last= Reisinger
|first= Don
|url= http://news.cnet.com/8301-13506_3-20070268-17/senators-target-bitcoin-currency-citing-drug-sales/
|title= Senators target Bitcoin currency, citing drug sales | The Digital Home – CNET News
|publisher= News.cnet.com
|date= 2011-06-09
|accessdate = 2011-06-22
}}</ref><ref>{{cite news
|last= Olson
|first= Parmy
|url= http://blogs.forbes.com/parmyolson/2011/06/06/lulzsec-hackers-posts-sony-dev-source-code-get-7k-donation/
|title= LulzSec Hackers Post Sony Dev. Source Code, Get $7K Donation – Parmy Olson – Disruptors – Forbes
|publisher= Blogs.forbes.com
|date= 6 June 2011
|accessdate = 2011-06-22
}}</ref>

====Silk Road====
[[Silk Road]] is an anonymous black market that uses only the Bitcoin.<ref name="npr-06-12-11">
{{Cite news
|url= http://www.npr.org/2011/06/12/137138008/silk-road-not-your-fathers-amazon-com
|date= 12 June 2011
|newspaper= NPR
|title= Silk Road: Not Your Father's Amazon.com
|author= Staff
}}</ref>

In a 2011 letter to Attorney General Eric Holder and the Drug Enforcement Administration, senators Charles Schumer of New York and Joe Manchin of West Virginia called for an investigation into Silk Road and the Bitcoin.<ref name="npr-06-12-11"/>
Schumer described the use of Bitcoins at Silk Road as a form of money laundering.<ref name="ars-06-08-11"/>

====Botnet mining====
In June 2011, Symantec warned about the possibility of botnets engaging in covert "mining" of Bitcoins,<ref>{{Cite web|author=Updated: 17 June 2011 | Translations available: 日本語 |url=http://www.symantec.com/connect/blogs/bitcoin-botnet-mining |title=Bitcoin Botnet Mining | Symantec Connect Community |publisher=Symantec.com |date=2011-06-17 |accessdate = 2012-01-24}}</ref><ref>{{Cite web|url=http://www.zdnet.com/blog/security/researchers-find-malware-rigged-with-bitcoin-miner/8934 |title=Researchers find malware rigged with Bitcoin miner |publisher=ZDNet |date=2011-06-29 |accessdate = 2012-01-24}}</ref> consuming computing cycles, using extra electricity and possibly increasing the temperature of the computer. Later that month, the Australian Broadcasting Corporation caught an employee using the company's servers to generate Bitcoins without permission.<ref>{{Cite web|url=http://thenextweb.com/au/2011/06/23/abc-employee-caught-mining-for-bitcoins-on-company-servers/ |title=ABC employee caught mining for Bitcoins on company servers |publisher=The Next Web |date=2011-06-23 |accessdate = 2012-01-24}}</ref> Some malware also uses the parallel processing capabilities of the GPUs built into many modern-day video cards.<ref>{{Cite news |url=http://www.theregister.co.uk/2011/08/16/gpu_bitcoin_brute_forcing/ |title=Malware mints virtual currency using victim's GPU |date=16 August 2011|first=Dan |last=Goodin }}</ref> In mid August 2011, Bitcoin miner botnets were found;<ref>{{Cite web|url=http://www.infosecurity-magazine.com/view/20211/researcher-discovers-distributed-bitcoin-cracking-trojan-malware/ |title=Infosecurity – Researcher discovers distributed bitcoin cracking trojan malware |publisher=Infosecurity-magazine.com |date=2011-08-19 |accessdate = 2012-01-24}}</ref> trojans infecting Mac OS X have also been uncovered.<ref>{{Cite web|url=http://www.techworld.com.au/article/405849/mac_os_x_trojan_steals_processing_power_produce_bitcoins |title=Mac OS X Trojan steals processing power to produce Bitcoins – sophos, security, malware, Intego – Vulnerabilities – Security |publisher=Techworld |date=2011-11-01 |accessdate = 2012-01-24}}</ref>

===Theft and fraud===
On 19 June 2011, a security breach of the Mt.Gox (an acronym for ''M''agic: ''T''he ''G''athering ''O''nline E''x''change, its original purpose) Bitcoin Exchange caused the price of a Bitcoin to briefly drop to US$0.01 on the Mt.Gox exchange (though it remained unaffected on other exchanges) after a hacker allegedly used credentials from a Mt.Gox auditor's compromised computer to illegally transfer a large number of Bitcoins to him- or herself and sell them all, creating a massive "ask" order at any price. Within minutes the price rebounded to over $15 before Mt.Gox shut down their exchange and canceled all trades that happened during the hacking period.<ref>[https://mtgox.com/press_release_20110630.html Clarification of Mt Gox Compromised Accounts and Major Bitcoin Sell-Off]</ref><ref>[http://www.youtube.com/watch?v=T1X6qQt9ONg YouTube. Bitcoin Report]</ref> The exchange rate of Bitcoins quickly returned to near pre-crash values.<ref name="mick">Jason Mick, 19 June 2011, [http://www.dailytech.com/Inside+the+MegaHack+of+Bitcoin+the+Full+Story/article21942.htm Inside the Mega-Hack of Bitcoin: the Full Story], DailyTech</ref><ref>Timothy B. Lee, 19 June 2011, [http://arstechnica.com/tech-policy/news/2011/06/bitcoin-price-plummets-on-compromised-exchange.ars Bitcoin prices plummet on hacked exchange], Ars Technica</ref><ref>Mark Karpeles, 20 June 2011, [https://support.mtgox.com/entries/20208066-huge-bitcoin-sell-off-due-to-a-compromised-account-rollback Huge Bitcoin sell off due to a compromised account – rollback], Mt.Gox Support</ref><ref name="register1">{{Cite news
|title= Bitcoin collapses on malicious trade – Mt Gox scrambling to raise the Titanic
|url= http://www.theregister.co.uk/2011/06/19/bitcoin_values_collapse_again/
|date= 2011-06-19
|author= Chirgwin, Richard
|publisher= The Register
}}</ref> Accounts with the equivalent of more than USD 8,750,000 were affected.<ref name="mick" />

In July 2011, The operator of Bitomat, the third largest Bitcoin exchange, announced that he lost access to his wallet.dat file with about 17,000 BitCoins (roughly equivalent to 220,000 USD at that time). He announced that he would sell the service for the missing amount, aiming to use funds from the sale to refund his customers.<ref>[http://siliconangle.com/blog/2011/08/01/third-largest-bitcoin-exchange-bitomat-lost-their-wallet-over-17000-bitcoins-missing/ Third Largest Bitcoin Exchange Bitomat Lost Their Wallet, Over 17,000 Bitcoins Missing]. SiliconAngle</ref>

In August 2011, MyBitcoin, one of popular Bitcoin transaction processors, declared that it was hacked, which resulted in it being shut down, with paying 49% on customer deposits, leaving more than 78,000 BitCoins (roughly equivalent to 800,000 USD at that time) unaccounted for.<ref>[http://betabeat.com/2011/08/mybitcoin-spokesman-finally-comes-forward-what-did-you-think-we-did-after-the-hack-we-got-shitfaced/ MyBitcoin Spokesman Finally Comes Forward: “What Did You Think We Did After the Hack? We Got Shitfaced”]. BetaBeat</ref><ref>[http://betabeat.com/2011/08/search-for-owners-of-mybitcoin-loses-steam/ Search for Owners of MyBitcoin Loses Steam]. BetaBeat</ref>

In early August 2012, a lawsuit was filed in San Francisco court against Bitcoinica, claiming about 460,000 USD from the company. Bitcoinica was hacked twice in 2012, which led to allegations of neglecting the safety of customers' money and cheating them out of withdrawal requests.<ref>[http://arstechnica.com/tech-policy/2012/08/bitcoinica-users-sue-for-460k-in-lost-bitcoins/ Bitcoinica users sue for $460k in lost Bitcoins]. Arstechnica</ref><ref>[http://spectrum.ieee.org/tech-talk/computing/networks/first-bitcoin-lawsuit-filed-in-san-francisco First Bitcoin Lawsuit Filed In San Francisco]. IEEE Spectrum</ref>

In late August 2012, Bitcoin Savings and Trust was shut down by the owner, allegedly leaving around $5.6 million in debts; this led to allegations of the operation being a Ponzi scheme.<ref>{{Cite web|title=Bitcoin ponzi scheme – investors lose $5 million USD in online hedge fund|url=http://rt.com/usa/news/investors-currency-digital-fund-868/|publisher=RT}}</ref><ref>{{Cite web|last=Jeffries|first=Adrianne|title=Suspected multi-million dollar Bitcoin pyramid scheme shuts down, investors revolt|url=http://www.theverge.com/2012/8/27/3271637/bitcoin-savings-trust-pyramid-scheme-shuts-down|publisher=The Verge}}</ref><ref>{{Cite web|last=Mick|first=Jason|title="Pirateat40" Makes Off $5.6M USD in BitCoins From Pyramid Scheme|url=http://www.dailytech.com/Pirateat40+Makes+Off+56M+USD+in+BitCoins+From+Pyramid+Scheme/article25538.htm|publisher=DailyTech}}</ref><ref>[http://pandodaily.com/2012/08/31/bitcoin-how-a-virtual-currency-became-real-with-a-5-6m-fraud/ Bitcoin: How a Virtual Currency Became Real with a $5.6M Fraud]. PandoDaily</ref> In September 2012, it was reported that U.S. Securities and Exchange Commission has started an investigation on the case.<ref>[http://blogs.telegraph.co.uk/technology/willardfoxton2/100007836/bitcoin-pirate-scandal-sec-steps-in-amid-allegations-that-the-whole-thing-was-a-ponzi-scheme/ Bitcoin 'Pirate' scandal: SEC steps in amid allegations that the whole thing was a Ponzi scheme ]. The Telegraph</ref>

In September 2012, Bitfloor Bitcoin exchange also reported being hacked, with 24,000 BitCoins (roughly equivalent to 250,000 USD) stolen. As a result, Bitfloor suspended operations.<ref>[http://www.bbc.co.uk/news/technology-19486695 Bitcoin theft causes Bitfloor exchange to go offline]. BBC</ref><ref>[http://www.theverge.com/2012/9/5/3293375/bitfloor-bitcoin-exchange-suspended-theft Bitcoin exchange BitFloor suspends operations after $250,000 theft Bitcoin exchange BitFloor suspends operations after $250,000 theft]. The Verge</ref> The same month, Bitfloor resumed operations, with its founder saying that he reported the theft to FBI, and that he is planning to repay the victims, though the time frame for such repayment is unclear.<ref>[http://www.pcworld.com/article/2010586/bitcoin-exchange-back-online-after-hack.html?tk=rel_news Bitcoin exchange back online after hack]. PCWorld</ref>

===Taxation===
In September 2012, the Intra-European Organization of Tax Administrations (IOTA), in Tbilisi, Georgia, held a workshop titled "Auditing Individuals and Legal Entities in the Use of e-Money." The workshop was attended by representatives from 23 countries.<ref name="BitCoin Tax issues Oct 2012">{{cite journal | title=2012 TNT 209-4 NEWS ANALYSIS: VIRTUAL CURRENCY: A NEW WORRY FOR TAX ADMINISTRATORS?. (Release Date: OCTOBER 17, 2012) (Doc 2012-21516) | author=Stewart, David D. and Soong Johnston, Stephanie D. | journal=Tax Notes Today | year=2012 | month=October 29 | volume=2012 TNT 209-4 | issue=2012 TNT 209-4}}</ref> Jerry Taylor, IOTA's technical taxation expert, said, "There's an awful lot happening on the Internet environment which is fascinating at the moment and introducing new challenges for auditors when it comes to virtual currency."<ref name="BitCoin Tax issues Oct 2012">{{cite journal | title=2012 TNT 209-4 NEWS ANALYSIS: VIRTUAL CURRENCY: A NEW WORRY FOR TAX ADMINISTRATORS?. (Release Date: OCTOBER 17, 2012) (Doc 2012-21516) | author=Stewart, David D. and Soong Johnston, Stephanie D. | journal=Tax Notes Today | year=2012 | month=October 29 | volume=2012 TNT 209-4 | issue=2012 TNT 209-4}}</ref> Bitcoin was mentioned during the workshop.<ref name="BitCoin Tax issues Oct 2012">{{cite journal | title=2012 TNT 209-4 NEWS ANALYSIS: VIRTUAL CURRENCY: A NEW WORRY FOR TAX ADMINISTRATORS?. (Release Date: OCTOBER 17, 2012) (Doc 2012-21516) | author=Stewart, David D. and Soong Johnston, Stephanie D. | journal=Tax Notes Today | year=2012 | month=October 29 | volume=2012 TNT 209-4 | issue=2012 TNT 209-4}}</ref>

Matthew Elias, founder of the [[Cryptocurrency Legal Advocacy Group]] (CLAG) published "Staying Between the Lines: A Survey of U.S. Income Taxation and its Ramifications on Cryptocurrencies", which discusses "the taxability of cryptocurrencies such as bitcoin."<ref name="BitCoin Tax issues Oct 2012">{{cite journal | title=2012 TNT 209-4 NEWS ANALYSIS: VIRTUAL CURRENCY: A NEW WORRY FOR TAX ADMINISTRATORS?. (Release Date: OCTOBER 17, 2012) (Doc 2012-21516) | author=Stewart, David D. and Soong Johnston, Stephanie D. | journal=Tax Notes Today | year=2012 | month=October 29 | volume=2012 TNT 209-4 | issue=2012 TNT 209-4}}</ref> CLAG "stressed the importance for taxpayers to determine on their own whether taxes are due on a bitcoin-related transaction based on whether one has "experienced a realization event."<ref name="BitCoin Tax issues Oct 2012">{{cite journal | title=2012 TNT 209-4 NEWS ANALYSIS: VIRTUAL CURRENCY: A NEW WORRY FOR TAX ADMINISTRATORS?. (Release Date: OCTOBER 17, 2012) (Doc 2012-21516) | author=Stewart, David D. and Soong Johnston, Stephanie D. | journal=Tax Notes Today | year=2012 | month=October 29 | volume=2012 TNT 209-4 | issue=2012 TNT 209-4}}</ref> Such examples are "when a taxpayer has provided a service in exchange for bitcoins, a realization event has probably occurred, and any gain or loss would likely be calculated using fair market values for the service provided."<ref name="BitCoin Tax issues Oct 2012">{{cite journal | title=2012 TNT 209-4 NEWS ANALYSIS: VIRTUAL CURRENCY: A NEW WORRY FOR TAX ADMINISTRATORS?. (Release Date: OCTOBER 17, 2012) (Doc 2012-21516) | author=Stewart, David D. and Soong Johnston, Stephanie D. | journal=Tax Notes Today | year=2012 | month=October 29 | volume=2012 TNT 209-4 | issue=2012 TNT 209-4}}</ref>

[[Peter Vessenes]], [[Bitcoin Foundation|Bitcoin Foundation's]] executive director, said, since the foundation is trying to pay for everything in bitcoin, including salaries, "How do we W-2 someone for their bitcoins? Do we mark-to-market every time a transfer happens? Payroll companies cringe."<ref name="BitCoin Tax issues Oct 2012">{{cite journal | title=2012 TNT 209-4 NEWS ANALYSIS: VIRTUAL CURRENCY: A NEW WORRY FOR TAX ADMINISTRATORS?. (Release Date: OCTOBER 17, 2012) (Doc 2012-21516) | author=Stewart, David D. and Soong Johnston, Stephanie D. | journal=Tax Notes Today | year=2012 | month=October 29 | volume=2012 TNT 209-4 | issue=2012 TNT 209-4}}</ref> The Bitcoin Foundation hopes "to push for solid guidance about its legal and tax treatment." [[Patrick Murck]], legal counsel for the Bitcoin Foundation, said he would like "to help regulators understand the technology better so they can make better decisions."<ref name="BitCoin Tax issues Oct 2012">{{cite journal | title=2012 TNT 209-4 NEWS ANALYSIS: VIRTUAL CURRENCY: A NEW WORRY FOR TAX ADMINISTRATORS?. (Release Date: OCTOBER 17, 2012) (Doc 2012-21516) | author=Stewart, David D. and Soong Johnston, Stephanie D. | journal=Tax Notes Today | year=2012 | month=October 29 | volume=2012 TNT 209-4 | issue=2012 TNT 209-4}}</ref> Murck said, "Bitcoin has the potential to become much more than a niche currency, but it needs the guidance and understanding of regulators." and "The full potential of bitcoin could be realized through clearer guidelines and a better understanding by financial and tax regulators." and "Part of making that happen is to talk to regulators, the IRS, and tax professionals and helping them understand that bitcoin is not this nefarious thing, it's just software, it's a community, and there's nothing inherently nefarious about either of those things."<ref name="BitCoin Tax issues Oct 2012">{{cite journal | title=2012 TNT 209-4 NEWS ANALYSIS: VIRTUAL CURRENCY: A NEW WORRY FOR TAX ADMINISTRATORS?. (Release Date: OCTOBER 17, 2012) (Doc 2012-21516) | author=Stewart, David D. and Soong Johnston, Stephanie D. | journal=Tax Notes Today | year=2012 | month=October 29 | volume=2012 TNT 209-4 | issue=2012 TNT 209-4}}</ref>

==See Also==
* [[Introduction]]
* [[Getting started]]
* [[Using_Bitcoin|Detailed tutorial]]
* [[FAQ]]

==References==
<references />

[[Category:Digital currencies]]

Bitcoin

2014-04-16T18:02:46Z

Benbest: /* History */ correction, with citation

'''Bitcoin''' is a decentralized [[digital currency]] created by developer [[Satoshi Nakamoto]]. It does not rely on a central server to process transactions or store funds. There are a maximum of 2,100,000,000,000,000 Bitcoin elements (called satoshis), currently most commonly measured in units of 100,000,000 known as BTC.

{{As of|April 2013}}, it is the most widely used alternative currency,<ref name="Quantitative Analysis of the Full Bitcoin Transaction Graph">{{cite web|title=Quantitative Analysis of the Full Bitcoin Transaction Graph|url=http://eprint.iacr.org/2012/584.pdf|publisher=Cryptology ePrint Archive|accessdate=18 October 2012|author=Ron Dorit|coauthors=Adi Shamir|page=17|quote=The Bitcoin system is the best known and most widely used alternative payment scheme,...}}</ref><ref name="Mt.Gox data">{{Cite web|title=Mt.Gox data|url=http://bitcoincharts.com/markets/mtgoxUSD.html|publisher=Bitcoincharts}}</ref> now with the total market cap over 11 billion US dollars<ref>{{cite web|title=Market Capitalization|url=http://blockchain.info/charts/market-cap|publisher=Blockchain.info|accessdate=7 April 2013}}</ref>.

Bitcoin has no central issuer; instead, the peer-to-peer network regulates Bitcoins, transactions and issuance according to consensus in network software.
Bitcoins are issued to various nodes that verify transactions through computing power;
it is established that there will be a limited and scheduled release of no more than 21 million BTC worth of coins, which will be fully issued by the year 2140.

Internationally, Bitcoins can be exchanged and managed through various websites and [[software]] along with physical banknotes and coins.<ref>{{Cite web|title=Physical Bitcoins by Casascius|url=https://www.casascius.com/|publisher=Casascius Coins|accessdate=29 September 2012}}</ref><ref>{{Cite web|title=Bitbills|url=http://www.bitbills.com/|publisher=Bitbills|accessdate=29 September 2012}}</ref>

==History==
:Main article: [[History]]

A cryptographic system for untraceable payments was first described by David Chaum in 1982.<ref>[http://blog.koehntopp.de/uploads/Chaum.BlindSigForPayment.1982.PDF David Chaum, Blind signatures for untraceable payments], Advances in Cryptology - Crypto '82, Springer-Verlag (1983), 199–203.</ref> In 1990 Chaum extended this system to create the first cryptographic anonymous electronic cash system.,<ref>{{cite journal|journal=Lecture Notes in Computer Science|last1=Chaum|first1=David|last2=Fiat|first2=Amos|last3=Naor|first3=Moni|title=Untraceable Electronic Cash|url=http://blog.koehntopp.de/uploads/chaum_fiat_naor_ecash.pdf}}</ref> which became known as ecash.
<ref>{{cite web|url=http://www.wired.com/wired/archive/2.12/emoney.html|publisher=Wired|title=E-Money (That's What I Want)|date=1994–2012|author=Steven Levy}}</ref> In 1998 Wei Dai published a description of an anonymous, distributed electronic cash system which he called "b-money".<ref>{{cite web|title=B-Money|url=http://www.weidai.com/bmoney.txt|author=Wei Dai|year=1998}}</ref> Around the same time, Nick Szabo created ''bit gold''.<ref>{{cite web|url=http://spectrum.ieee.org/computing/software/bitcoin-the-cryptoanarchists-answer-to-cash/0|title=Bitcoin: The Cryptoanarchists’ Answer to Cash|publisher=IEEE Spectrum|quote=Around the same time, Nick Szabo, a computer scientist who now blogs about law and the history of money, was one of the first to imagine a new digital currency from the ground up. Although many consider his scheme, which he calls “bit gold,” to be a precursor to Bitcoin}}</ref><ref name="bitgold">{{cite web|title=Bit gold|url=http://unenumerated.blogspot.co.uk/2005/12/bit-gold.html|author=Nick Szabo|quote=My proposal for bit gold is based on computing a string of bits from a string of challenge bits, using functions called variously "client puzzle function," "proof of work function," or "secure benchmark function.". The resulting string of bits is the proof of work.... The last-created string of bit gold provides the challenge bits for the next-created string.}}</ref> Like Bitcoin, ''Bit gold'' was a currency system where users would compete to solve a [[proof of work]] function, with solutions being cryptographically chained together and published via a distributed property title registry. A variant of ''Bit gold'', called ''Reusable Proofs of Work'', was implemented by Hal Finney.<ref name="bitgold"/>

In 2008, Satoshi Nakamoto published a [[Bitcoin_white_paper|paper]]<ref name="whitepaper">{{cite web
|last= Nakamoto
|first= Satoshi
|title= Bitcoin: A Peer-to-Peer Electronic Cash System
|url= http://www.cs.kent.edu/~JAVED/class-P2P12F/papers-2012/PAPER2012-p2p-bitcoin-satoshinakamoto.pdf
|accessdate = 14 December 2010
|date= 24 May 2009
|postscript=
}}</ref><ref>{{cite web
|url= http://article.gmane.org/gmane.comp.encryption.general/12588/
|title= Bitcoin P2P e-cash paper
}}</ref> on The Cryptography Mailing list at metzdowd.com<ref>[http://www.mail-archive.com/search?l=cryptography@metzdowd.com&q=from:%22Satoshi+Nakamoto%22 Satoshi's posts to Cryptography mailing list]</ref> describing the Bitcoin protocol.

The Bitcoin network came into existence on 3 January 2009 with the release of the first Bitcoin client, [[wxBitcoin]], and the issuance of the first Bitcoins.<ref>{{cite web |title=Block 0 – Bitcoin Block Explorer |url=http://blockexplorer.com/block/000000000019d6689c085ae165831e934ff763ae46a2a6c172b3f1b60a8ce26f }}</ref><ref>{{cite web |url=http://www.mail-archive.com/cryptography@metzdowd.com/msg10142.html |title=Bitcoin v0.1 released}}</ref><ref>{{cite web |url=http://sourceforge.net/news/?group_id=244765 |title=SourceForge.net: Bitcoin}}</ref>
A year after, the initial exchange rates for Bitcoin were set by individuals on the bitcointalk forums.{{Citation needed|date=October 2012}} The most significant transaction involved a 10,000 BTC pizza.<ref>{{cite web|title=The Rise and Fall of Bitcoin|url=http://www.wired.com/magazine/2011/11/mf_bitcoin/|publisher=Wired|accessdate=13 October 2012}}</ref>
Today, the majority of Bitcoin exchanges occur on the [[Bitstamp]] Bitcoin exchange.<ref>{{cite web | title = Exchange volume distribution | work = by market | publisher = [[Bitcoin Charts]] | date = April 15, 2014 | url = http://bitcoincharts.com/charts/volumepie/ | accessdate = 2014-04-15 }}</ref>

In 2011, Wikileaks,<ref>{{cite news
|last= Greenberg
|first= Andy
|url= http://blogs.forbes.com/andygreenberg/2011/06/14/wikileaks-asks-for-anonymous-bitcoin-donations/
|title= WikiLeaks Asks For Anonymous Bitcoin Donations – Andy Greenberg – The Firewall – Forbes
|publisher= Blogs.forbes.com
|date= 2011-06-14
|accessdate = 2011-06-22
}}</ref> [[Freenet]],<ref>{{cite web
|url= https://freenetproject.org/donate.html
|title= /donate
|publisher= The Freenet Project
|date=
|accessdate = 2011-06-22
}}</ref> Singularity Institute,<ref>[http://singinst.org/donate/ SIAI donation page]</ref> Internet Archive,<ref>[http://www.archive.org/donate/index.php Internet Archive donation page]</ref> Free Software Foundation<ref>[https://my.fsf.org/donate/other/ Other ways to donate]</ref> and others, began to accept donations in Bitcoin. The Electronic Frontier Foundation did so for a while but has since stopped, citing concerns about a lack of legal precedent about new currency systems, and because they "generally don't endorse any type of product or service."<ref>{{cite web
|url= https://www.eff.org/deeplinks/2011/06/eff-and-bitcoin
|title= EFF and Bitcoin | Electronic Frontier Foundation
|publisher= Eff.org
|date= 2011-06-14
|accessdate = 2011-06-22
}}</ref> Some small businesses had started to adopt Bitcoin. LaCie, a public company, accepts Bitcoin for its Wuala service.<ref>{{Cite web|url=http://www.wuala.com/en/bitcoin |title=Secure Online Storage – Backup. Sync. Share. Access Everywhere |publisher=Wuala |date= |accessdate = 2012-01-24}}</ref>

In 2012, BitPay reports of having over 1000 merchants accepting Bitcoin under its payment processing service.<ref>{{cite web|title=BitPay Signs 1,000 Merchants to Accept Bitcoin Payments|url=http://www.americanbanker.com/issues/177_176/bitpay-signs-1000-merchants-to-accept-bitcoin-payments-1052538-1.html|publisher=American Banker|accessdate=12 October 2012}}</ref>

==Administration==
Bitcoin is administered through a decentralized peer-to-peer network.<ref name="whitepaper"/> Cryptographic technologies and the peer-to-peer network of computing power enables users to make and verify irreversible, instant online Bitcoin payments, without an obligation to trust and use centralized banking institutions and authorities. Dispute resolution services are not made directly available. Instead it is left to the users to verify and trust the parties they are sending money to through their choice of methods.

Bitcoins are issued according to rules agreed to by the majority of the computing power within the Bitcoin network. The core rules describing the predictable issuance of Bitcoins to its verifying servers, a voluntary and competitive transaction fee system and the hard limit of no more than 21 million BTC issued in total.<ref name="whitepaper"/>

Bitcoin does not require a central bank, State,<ref>{{cite web
|url= http://spectrum.ieee.org/computing/software/bitcoin-the-cryptoanarchists-answer-to-cash/3
|title= Bitcoin: The Cryptoanarchists' Answer to Cash
|publisher= IEEE.org
|date= June 2012
|accessdate = 2012-06-05
}}</ref> or incorporated backers.

==Services==
:Main article: [[Wallet]]

Bitcoins are sent and received through software and websites called wallets. They send and confirm transactions to the network through Bitcoin addresses, the identifiers for users' Bitcoin wallets within the network.<ref name="whitepaper"/>

===Bitcoin addresses===
:Main article: [[Address]]

Payments are made to Bitcoin "addresses": human-readable strings of numbers and letters around 33 characters in length, always beginning with the digit 1 or 3, as in the example of ''31uEbMgunupShBVTewXjtqbBv5MndwfXhb''.

Users obtain new Bitcoin addresses from their Bitcoin software. Creating a new address can be a completely offline process and require no communication with the Bitcoin network.

===Transaction fees===
:Main article: [[Transaction fees]]
Transaction fees may be included with any transfer of Bitcoins. {{As of|2012}} many transactions are processed in a way which makes no charge for the transaction. For transactions which consume or produce many coins (and therefore have a large data size), a small transaction fee is usually expected.

===Confirmations===
:Main article: [[Confirmation]]

The network's software confirms a transaction when it records it in a block. Further blocks of transactions confirm it even further. After six confirmations/blocks, a transaction is confirmed beyond reasonable doubt.

The network must store the whole transaction history inside the blockchain, which grows constantly as new records are added and never removed. Nakamoto conceived that as the database became larger, users would desire applications for Bitcoin that didn't store the entire database on their computer. To enable this, the blockchain uses a [[merkle tree]] to organize the transaction records in such a way that client software can locally delete portions of its own database it knows it will never need, such as earlier transaction records of Bitcoins that have changed ownership multiple times.

==Economics==

===Initial distribution===

Bitcoin has no centralized issuing authority.<ref name="ars-06-08-11">
{{Cite news
|first= Thomas
|last= Lowenthal
|title= Bitcoin: inside the encrypted, peer-to-peer digital currency
|newspaper= Ars Technica
|date= 8 June 2011
|url= http://arstechnica.com/tech-policy/news/2011/06/bitcoin-inside-the-encrypted-peer-to-peer-currency.ars
}}</ref><ref>{{cite news
|author= Sponsored by
|url= http://www.economist.com/blogs/babbage/2011/06/virtual-currency
|title= Virtual currency: Bits and bob
|publisher= The Economist
|date=
|accessdate = 2011-06-22
}}</ref><ref>{{cite web
|last= Geere
|first= Duncan
|url= http://www.wired.co.uk/news/archive/2011-05/16/bitcoin-p2p-currency
|title= Peer-to-peer currency Bitcoin sidesteps financial institutions (Wired UK)
|publisher= Wired.co.uk
|date=
|accessdate = 2011-06-22
}}</ref> The network is programmed to increase the money supply as a geometric series until the total number of Bitcoins reaches 21 million BTC.<ref name="Quantitative Analysis of the Full Bitcoin Transaction Graph"/> {{As of|2012|10}} slightly over 10 million of the total 21 million BTC had been created; the current total number created is available online.<ref>{{cite web
|title= Total Number of Bitcoins in Existence
|url= http://blockexplorer.com/q/totalbc
|work= Bitcoin Block Explorer
|accessdate = 2012-10-03
}}</ref> By 2013 half of the total supply will have been generated, and by 2017, three-quarters will have been generated. To ensure sufficient granularity of the [[money supply]], clients can divide each BTC unit down to eight decimal places (a total of 2.1 × 1015 or 2.1 quadrillion units).<ref name="lwn">{{Cite news
|author= Nathan Willis
|date= 2010-11-10
|title= Bitcoin: Virtual money created by CPU cycles
|publisher= LWN.net
|url= http://lwn.net/Articles/414452/
}}</ref>

The network {{As of|2012|lc=on}} required over one million times more work for confirming a block and receiving an award (25 BTC {{As of|2012|2|lc=on}}) than when the first blocks were confirmed.
The difficulty is automatically adjusted every 2016 blocks based on the time taken to find the previous 2016 blocks such that one block is created roughly every 10 minutes.

Those who chose to put computational and electrical resources toward mining early on had a greater chance at receiving awards for block generations. This served to make available enough processing power to process blocks. Indeed, without miners there are no transactions and the Bitcoin economy comes to a halt.

===Exchange rate===
Prices fluctuate relative to goods and services more than more widely accepted currencies;
the price of a Bitcoin is not static.

In August 2012, 1 BTC traded at around $10.00 USD. Taking into account the total number of Bitcoins mined, the monetary base of the Bitcoin network stands at over 110 million USD.<ref>[http://www.bitcoinwatch.com/ http://www.bitcoinwatch.com/] Bitcoin statistics</ref>

== Security ==
:Main article: [[Weaknesses]]

In the history of bitcoin, there have been a few [[incidents]], caused by problematic as well as malicious transactions. In the worst such incident, and the only one of its type, a person was able to pretend that he had a practically infinite supply of bitcoins, for almost 9 hours.

Bitcoin relies, among other things, on [http://en.wikipedia.org/wiki/Public-key_cryptography public key cryptography] and thus may be vulnerable to [http://en.wikipedia.org/wiki/Elliptic_curve_cryptography#Quantum_computing_attacks quantum computing attacks] if and when practical quantum computers can be constructed.

If multiple different software packages, whose usage becomes widespread on the Bitcoin network, disagree on the protocol and the rules for transactions, this could potentially cause a fork in the block chain, with each faction of users being able to accept only their own version of the history of transactions. This could influence the price of bitcoins.

A global, organized campaign against the currency or the software could also influence the demand for bitcoins, and thus the exchange price.

==Bitcoin mining==
:Main article: [[Mining]]

Bitcoin mining nodes are responsible for managing the Bitcoin network.

Bitcoins are awarded to Bitcoin nodes known as "miners" for the solution to a difficult [[proof-of-work]] problem which confirms transactions and prevents double-spending. This incentive, as the Nakamoto white paper describes it, encourages "nodes to support the network, and provides a way to initially distribute coins into circulation, since no central authority issues them."<ref name="whitepaper" />

Nakamoto compared the generation of new coins by expending CPU time and electricity to gold miners expending resources to add gold to circulation.<ref name="whitepaper"/>

===Node operation===

The node software for the Bitcoin network is based on peer-to-peer networking, digital signatures and cryptographic proof to make and verify transactions. Nodes broadcast transactions to the network, which records them in a public record of all transactions, called the ''blockchain'', after validating them with a [[proof-of-work|proof-of-work system]].

Satoshi Nakamoto designed the first Bitcoin node and mining software<ref name="processors">{{Cite news
|last= Davis
|first= Joshua
|title= The Crypto-Currency
|url= http://www.wired.com/magazine/2011/11/mf_bitcoin/all
|accessdate = 11 November 2011
|newspaper= Wired Magazine
|date= 10 November 2011
}}</ref> and developed the majority of the first implementation, Bitcoind, from 2007 to mid-2010.<ref name="code_start">{{cite web
|url= https://bitcointalk.org/index.php?topic=13.msg46#msg46
|title= Questions about Bitcoin
|publisher= Bitcoin forum
|date= 2009-12-10
}}</ref>

Node implementations include core software such as Bitcoind/Bitcoin-Qt, [[libbitcoin]], [[cbitcoin]]<ref>{{Cite web|title=cbitcoin|url=https://github.com/MatthewLM/cbitcoin|accessdate=3 October 2012}}</ref> and [[BitCoinJ|bitcoinj]].<ref>{{cite web
|url= http://news.slashdot.org/story/11/03/23/0210207/Google-Engineer-Releases-Open-Source-Bitcoin-Client
|title= Google Engineer Releases Open Source Bitcoin Client
|author= angry tapir, timothy
|date= 23 March 2011
|publisher= Slashdot
|accessdate = 2011-05-18
}}</ref><ref>{{cite web
|url= http://www.javaworld.com/javaworld/jw-01-2012/120110-bitcoin-for-beginners-3.html?page=1
|title= Bitcoin for beginners: The BitcoinJ API
|author= Dirk Merkel
|date= 10 January 2012
|publisher= JavaWorld
|accessdate = 2012-08-03
}}</ref>

Every node in the Bitcoin network collects all the unacknowledged transactions it knows of in a file called a ''block'', which also contains a reference to the previous valid block known to that node. It then appends a [[nonce]] value to this previous block and computes the SHA-256 cryptographic hash of the block and the appended nonce value. The node repeats this process until it adds a nonce that allows for the generation of a hash with a value lower than a specified ''target''. Because computers cannot practically reverse the hash function, finding such a nonce is hard and requires on average a predictable amount of repetitious trial and error. This is where the ''[[proof-of-work]]'' concept comes in to play. When a node finds such a solution, it announces it to the rest of the network. Peers receiving the new solved block validate it by computing the hash and checking that it really starts with the given number of zero bits (i.e., that the hash is within the target). Then they accept it and add it to the chain.

===Mining rewards===
In addition to receiving the pending transactions confirmed in the block, a generating node adds a ''generate'' transaction, which awards new Bitcoins to the operator of the node that generated the block. The system sets the payout of this generated transaction according to its defined inflation schedule. The miner that generates a block also receives the fees that users have paid as an incentive to give particular transactions priority for faster confirmation.

The network never creates more than a 50 BTC reward per block and this amount will decrease over time towards zero, such that no more than 21 million BTC will ever exist.<ref name="lwn" /> As this payout decreases, the incentive for users to run block-generating nodes is intended to change to earning [[#Transaction fees|transaction fees]].

===Mining pools===
:Main article: [[Pooled mining]]

Bitcoin users often pool computational effort to increase the stability of the collected fees and subsidy they receive.<ref name="We Use Coins Mining">{{cite web|title=About Bitcoin Mining|url=http://www.weusecoins.com/mining-guide.php|publisher=We Use Coins|accessdate=18 October 2012}}</ref>

===Mining difficulty===
:Main article: [[Difficulty]]

In order to throttle the creation of blocks, the difficulty of generating new blocks is adjusted over time. If mining output increases or decreases, the difficulty increases or decreases accordingly.

The adjustment is done by changing the threshold that a hash is required to be less than. A lower threshold means fewer possible hashes can be accepted, and thus a higher degree of difficulty. The target rate of block generation is one block every 10 minutes, or 2016 blocks every two weeks. Bitcoin changes the difficulty of finding a valid block every 2016 blocks, using the difficulty that would have been most likely to cause the prior 2016 blocks to have taken two weeks to generate, according to the timestamps on the blocks. Technically, this is done by modeling the generation of Bitcoins as Poisson process. All nodes perform and enforce the same difficulty calculation.

Difficulty is intended as an automatic stabilizer allowing mining for Bitcoins to remain profitable in the long run for the most efficient miners, independently of the fluctuations in demand of Bitcoin in relation to other currencies.

===Mining hardware===
:Main article: [[Mining Hardware Comparison]]

Bitcoins used to be mined through Intel/AMD CPUs. {{As of | 2012}}, mining has gradually moved to [[GPU]] and [[FPGA]] hardware.<ref name="bitcoinmag-butterfly" /> [[Application-specific integrated circuit|ASIC]]-based hardware for Bitcoin mining has been announced by several manufacturers who intend to ship products from late 2012 to early 2013.<ref name="bitcoinmag-butterfly">{{Cite web|title=Bitpay Breaks Daily Volume Record with Butterfly ASIC mining release|url=http://bitcoinmagazine.net/bitpay-breaks-daily-volume-record-with-butterfly-asic-mining-release/|publisher=Bitcoin Magazine}}</ref>

==Concerns==

===As an investment===
Bitcoin describes itself as an experimental digital currency. Reuben Grinberg has noted that Bitcoin's supporters have argued that Bitcoin is neither a security or an investment because it fails to meet the criteria for either category.<ref name="grinberg">{{cite web | url=http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1817857 | title=Bitcoin: An Innovative Alternative Digital Currency | publisher=SSRN | date=9 December 2011 | accessdate=4 December 2012 | author=Grinberg, Reuben}}</ref> Although it is a virtual currency, some people see it as an investment<ref name="cnbc">{{cite web | url=http://www.cnbc.com/id/45030812/The_Pros_And_Cons_Of_Biting_on_Bitcoins | title=The Pros And Cons Of Biting on Bitcoins | publisher=CNBC | date=23 November 2011 | accessdate=4 December 2012 | author=Gustke, Constance}}</ref> or accuse it of being a form of investment fraud known as a Ponzi scheme.<ref>{{cite web |url=http://www.theregister.co.uk/2011/06/08/bitcoin_under_attack/ |title=US senators draw a bead on Bitcoin |last1=Chirgwin |first1=Richard |date=8 June 2011 |publisher=The Register |accessdate=14 November 2012}}</ref><ref>{{cite web |url=http://uk.reuters.com/article/2012/04/01/uk-traders-bitcoin-idUKBRE8300JL20120401 |title=Bitcoin, the City traders' anarchic new toy |last1=O'Leary |first1=Naomi |date=2 April 2012 |publisher=Reuters |accessdate=14 November 2012}}</ref> A report by the European Central Bank, using the U.S. Securities and Exchange Commission's definition of a Ponzi scheme, found that the use of bitcoins shares some characteristics with Ponzi schemes, but also has characteristics of its own which contradict several common aspects of Ponzi schemes.<ref name="ecbreport">{{cite web | url=http://www.ecb.europa.eu/pub/pdf/other/virtualcurrencyschemes201210en.pdf | title=Virtual Currency Schemes | publisher=European Central Bank | date=October 2012 | accessdate=4 December 2012}}</ref>

===Privacy===
Because transactions are broadcast to the entire network, they are inherently public. Unlike regular banking,<ref>{{cite web
|url= http://spectrum.ieee.org/computing/software/bitcoin-the-cryptoanarchists-answer-to-cash/0
|title= Bitcoin: The Cryptoanarchists' Answer to Cash
|publisher= IEEE.org
|date= June 2012
|accessdate = 2012-06-05
}}</ref> which preserves customer privacy by keeping transaction records private, loose transactional privacy is accomplished in Bitcoin by using many unique addresses for every wallet, while at the same time publishing all transactions. As an example, if Alice sends 123.45 BTC to Bob, the network creates a public record that allows anyone to see that 123.45 has been sent from one address to another. However, unless Alice or Bob make their ownership of these addresses known, it is difficult for anyone else to connect the transaction with them. However, if someone connects an address to a user at any point they could follow back a series of transactions as each participant likely knows who paid them and may disclose that information on request or under duress.

It can be difficult to associate Bitcoin identities with real-life identities.<ref name="An Analysis of Anonymity in the Bitcoin System">Fergal Reid and Martin Harrigan (24 July 2011). [http://anonymity-in-bitcoin.blogspot.com/2011/07/bitcoin-is-not-anonymous.html An Analysis of Anonymity in the Bitcoin System]. An Analysis of Anonymity in the Bitcoin System.</ref> This property makes Bitcoin transactions attractive to sellers of illegal products.<ref name="Forbes">Andy Greenberg (20 April 2011). [http://www.forbes.com/forbes/2011/0509/technology-psilocybin-bitcoins-gavin-andresen-crypto-currency.html Crypto Currency]. Forbes Magazine.</ref><ref>{{cite web
|last= Madrigal
|first= Alexis
|title= Libertarian Dream? A Site Where You Buy Drugs With Digital Dollars
|publisher= The Atlantic Monthly
|date= 2011-06-01
|url= http://www.theatlantic.com/technology/archive/2011/06/libertarian-dream-a-site-where-you-buy-drugs-with-digital-dollars/239776/
|accessdate = 2011-06-05
}}</ref>

===Illicit use===

====Cracking====
The cracking organization "LulzSec" accepted donations in Bitcoin, having said that the group "needs Bitcoin donations to continue their hacking efforts".<ref name="CNET">{{cite web
|last= Reisinger
|first= Don
|url= http://news.cnet.com/8301-13506_3-20070268-17/senators-target-bitcoin-currency-citing-drug-sales/
|title= Senators target Bitcoin currency, citing drug sales | The Digital Home – CNET News
|publisher= News.cnet.com
|date= 2011-06-09
|accessdate = 2011-06-22
}}</ref><ref>{{cite news
|last= Olson
|first= Parmy
|url= http://blogs.forbes.com/parmyolson/2011/06/06/lulzsec-hackers-posts-sony-dev-source-code-get-7k-donation/
|title= LulzSec Hackers Post Sony Dev. Source Code, Get $7K Donation – Parmy Olson – Disruptors – Forbes
|publisher= Blogs.forbes.com
|date= 6 June 2011
|accessdate = 2011-06-22
}}</ref>

====Silk Road====
[[Silk Road]] is an anonymous black market that uses only the Bitcoin.<ref name="npr-06-12-11">
{{Cite news
|url= http://www.npr.org/2011/06/12/137138008/silk-road-not-your-fathers-amazon-com
|date= 12 June 2011
|newspaper= NPR
|title= Silk Road: Not Your Father's Amazon.com
|author= Staff
}}</ref>

In a 2011 letter to Attorney General Eric Holder and the Drug Enforcement Administration, senators Charles Schumer of New York and Joe Manchin of West Virginia called for an investigation into Silk Road and the Bitcoin.<ref name="npr-06-12-11"/>
Schumer described the use of Bitcoins at Silk Road as a form of money laundering.<ref name="ars-06-08-11"/>

====Botnet mining====
In June 2011, Symantec warned about the possibility of botnets engaging in covert "mining" of Bitcoins,<ref>{{Cite web|author=Updated: 17 June 2011 | Translations available: 日本語 |url=http://www.symantec.com/connect/blogs/bitcoin-botnet-mining |title=Bitcoin Botnet Mining | Symantec Connect Community |publisher=Symantec.com |date=2011-06-17 |accessdate = 2012-01-24}}</ref><ref>{{Cite web|url=http://www.zdnet.com/blog/security/researchers-find-malware-rigged-with-bitcoin-miner/8934 |title=Researchers find malware rigged with Bitcoin miner |publisher=ZDNet |date=2011-06-29 |accessdate = 2012-01-24}}</ref> consuming computing cycles, using extra electricity and possibly increasing the temperature of the computer. Later that month, the Australian Broadcasting Corporation caught an employee using the company's servers to generate Bitcoins without permission.<ref>{{Cite web|url=http://thenextweb.com/au/2011/06/23/abc-employee-caught-mining-for-bitcoins-on-company-servers/ |title=ABC employee caught mining for Bitcoins on company servers |publisher=The Next Web |date=2011-06-23 |accessdate = 2012-01-24}}</ref> Some malware also uses the parallel processing capabilities of the GPUs built into many modern-day video cards.<ref>{{Cite news |url=http://www.theregister.co.uk/2011/08/16/gpu_bitcoin_brute_forcing/ |title=Malware mints virtual currency using victim's GPU |date=16 August 2011|first=Dan |last=Goodin }}</ref> In mid August 2011, Bitcoin miner botnets were found;<ref>{{Cite web|url=http://www.infosecurity-magazine.com/view/20211/researcher-discovers-distributed-bitcoin-cracking-trojan-malware/ |title=Infosecurity – Researcher discovers distributed bitcoin cracking trojan malware |publisher=Infosecurity-magazine.com |date=2011-08-19 |accessdate = 2012-01-24}}</ref> trojans infecting Mac OS X have also been uncovered.<ref>{{Cite web|url=http://www.techworld.com.au/article/405849/mac_os_x_trojan_steals_processing_power_produce_bitcoins |title=Mac OS X Trojan steals processing power to produce Bitcoins – sophos, security, malware, Intego – Vulnerabilities – Security |publisher=Techworld |date=2011-11-01 |accessdate = 2012-01-24}}</ref>

===Theft and fraud===
On 19 June 2011, a security breach of the Mt.Gox (an acronym for ''M''agic: ''T''he ''G''athering ''O''nline E''x''change, its original purpose) Bitcoin Exchange caused the price of a Bitcoin to briefly drop to US$0.01 on the Mt.Gox exchange (though it remained unaffected on other exchanges) after a hacker allegedly used credentials from a Mt.Gox auditor's compromised computer to illegally transfer a large number of Bitcoins to him- or herself and sell them all, creating a massive "ask" order at any price. Within minutes the price rebounded to over $15 before Mt.Gox shut down their exchange and canceled all trades that happened during the hacking period.<ref>[https://mtgox.com/press_release_20110630.html Clarification of Mt Gox Compromised Accounts and Major Bitcoin Sell-Off]</ref><ref>[http://www.youtube.com/watch?v=T1X6qQt9ONg YouTube. Bitcoin Report]</ref> The exchange rate of Bitcoins quickly returned to near pre-crash values.<ref name="mick">Jason Mick, 19 June 2011, [http://www.dailytech.com/Inside+the+MegaHack+of+Bitcoin+the+Full+Story/article21942.htm Inside the Mega-Hack of Bitcoin: the Full Story], DailyTech</ref><ref>Timothy B. Lee, 19 June 2011, [http://arstechnica.com/tech-policy/news/2011/06/bitcoin-price-plummets-on-compromised-exchange.ars Bitcoin prices plummet on hacked exchange], Ars Technica</ref><ref>Mark Karpeles, 20 June 2011, [https://support.mtgox.com/entries/20208066-huge-bitcoin-sell-off-due-to-a-compromised-account-rollback Huge Bitcoin sell off due to a compromised account – rollback], Mt.Gox Support</ref><ref name="register1">{{Cite news
|title= Bitcoin collapses on malicious trade – Mt Gox scrambling to raise the Titanic
|url= http://www.theregister.co.uk/2011/06/19/bitcoin_values_collapse_again/
|date= 2011-06-19
|author= Chirgwin, Richard
|publisher= The Register
}}</ref> Accounts with the equivalent of more than USD 8,750,000 were affected.<ref name="mick" />

In July 2011, The operator of Bitomat, the third largest Bitcoin exchange, announced that he lost access to his wallet.dat file with about 17,000 BitCoins (roughly equivalent to 220,000 USD at that time). He announced that he would sell the service for the missing amount, aiming to use funds from the sale to refund his customers.<ref>[http://siliconangle.com/blog/2011/08/01/third-largest-bitcoin-exchange-bitomat-lost-their-wallet-over-17000-bitcoins-missing/ Third Largest Bitcoin Exchange Bitomat Lost Their Wallet, Over 17,000 Bitcoins Missing]. SiliconAngle</ref>

In August 2011, MyBitcoin, one of popular Bitcoin transaction processors, declared that it was hacked, which resulted in it being shut down, with paying 49% on customer deposits, leaving more than 78,000 BitCoins (roughly equivalent to 800,000 USD at that time) unaccounted for.<ref>[http://betabeat.com/2011/08/mybitcoin-spokesman-finally-comes-forward-what-did-you-think-we-did-after-the-hack-we-got-shitfaced/ MyBitcoin Spokesman Finally Comes Forward: “What Did You Think We Did After the Hack? We Got Shitfaced”]. BetaBeat</ref><ref>[http://betabeat.com/2011/08/search-for-owners-of-mybitcoin-loses-steam/ Search for Owners of MyBitcoin Loses Steam]. BetaBeat</ref>

In early August 2012, a lawsuit was filed in San Francisco court against Bitcoinica, claiming about 460,000 USD from the company. Bitcoinica was hacked twice in 2012, which led to allegations of neglecting the safety of customers' money and cheating them out of withdrawal requests.<ref>[http://arstechnica.com/tech-policy/2012/08/bitcoinica-users-sue-for-460k-in-lost-bitcoins/ Bitcoinica users sue for $460k in lost Bitcoins]. Arstechnica</ref><ref>[http://spectrum.ieee.org/tech-talk/computing/networks/first-bitcoin-lawsuit-filed-in-san-francisco First Bitcoin Lawsuit Filed In San Francisco]. IEEE Spectrum</ref>

In late August 2012, Bitcoin Savings and Trust was shut down by the owner, allegedly leaving around $5.6 million in debts; this led to allegations of the operation being a Ponzi scheme.<ref>{{Cite web|title=Bitcoin ponzi scheme – investors lose $5 million USD in online hedge fund|url=http://rt.com/usa/news/investors-currency-digital-fund-868/|publisher=RT}}</ref><ref>{{Cite web|last=Jeffries|first=Adrianne|title=Suspected multi-million dollar Bitcoin pyramid scheme shuts down, investors revolt|url=http://www.theverge.com/2012/8/27/3271637/bitcoin-savings-trust-pyramid-scheme-shuts-down|publisher=The Verge}}</ref><ref>{{Cite web|last=Mick|first=Jason|title="Pirateat40" Makes Off $5.6M USD in BitCoins From Pyramid Scheme|url=http://www.dailytech.com/Pirateat40+Makes+Off+56M+USD+in+BitCoins+From+Pyramid+Scheme/article25538.htm|publisher=DailyTech}}</ref><ref>[http://pandodaily.com/2012/08/31/bitcoin-how-a-virtual-currency-became-real-with-a-5-6m-fraud/ Bitcoin: How a Virtual Currency Became Real with a $5.6M Fraud]. PandoDaily</ref> In September 2012, it was reported that U.S. Securities and Exchange Commission has started an investigation on the case.<ref>[http://blogs.telegraph.co.uk/technology/willardfoxton2/100007836/bitcoin-pirate-scandal-sec-steps-in-amid-allegations-that-the-whole-thing-was-a-ponzi-scheme/ Bitcoin 'Pirate' scandal: SEC steps in amid allegations that the whole thing was a Ponzi scheme ]. The Telegraph</ref>

In September 2012, Bitfloor Bitcoin exchange also reported being hacked, with 24,000 BitCoins (roughly equivalent to 250,000 USD) stolen. As a result, Bitfloor suspended operations.<ref>[http://www.bbc.co.uk/news/technology-19486695 Bitcoin theft causes Bitfloor exchange to go offline]. BBC</ref><ref>[http://www.theverge.com/2012/9/5/3293375/bitfloor-bitcoin-exchange-suspended-theft Bitcoin exchange BitFloor suspends operations after $250,000 theft Bitcoin exchange BitFloor suspends operations after $250,000 theft]. The Verge</ref> The same month, Bitfloor resumed operations, with its founder saying that he reported the theft to FBI, and that he is planning to repay the victims, though the time frame for such repayment is unclear.<ref>[http://www.pcworld.com/article/2010586/bitcoin-exchange-back-online-after-hack.html?tk=rel_news Bitcoin exchange back online after hack]. PCWorld</ref>

===Taxation===
In September 2012, the Intra-European Organization of Tax Administrations (IOTA), in Tbilisi, Georgia, held a workshop titled "Auditing Individuals and Legal Entities in the Use of e-Money." The workshop was attended by representatives from 23 countries.<ref name="BitCoin Tax issues Oct 2012">{{cite journal | title=2012 TNT 209-4 NEWS ANALYSIS: VIRTUAL CURRENCY: A NEW WORRY FOR TAX ADMINISTRATORS?. (Release Date: OCTOBER 17, 2012) (Doc 2012-21516) | author=Stewart, David D. and Soong Johnston, Stephanie D. | journal=Tax Notes Today | year=2012 | month=October 29 | volume=2012 TNT 209-4 | issue=2012 TNT 209-4}}</ref> Jerry Taylor, IOTA's technical taxation expert, said, "There's an awful lot happening on the Internet environment which is fascinating at the moment and introducing new challenges for auditors when it comes to virtual currency."<ref name="BitCoin Tax issues Oct 2012">{{cite journal | title=2012 TNT 209-4 NEWS ANALYSIS: VIRTUAL CURRENCY: A NEW WORRY FOR TAX ADMINISTRATORS?. (Release Date: OCTOBER 17, 2012) (Doc 2012-21516) | author=Stewart, David D. and Soong Johnston, Stephanie D. | journal=Tax Notes Today | year=2012 | month=October 29 | volume=2012 TNT 209-4 | issue=2012 TNT 209-4}}</ref> Bitcoin was mentioned during the workshop.<ref name="BitCoin Tax issues Oct 2012">{{cite journal | title=2012 TNT 209-4 NEWS ANALYSIS: VIRTUAL CURRENCY: A NEW WORRY FOR TAX ADMINISTRATORS?. (Release Date: OCTOBER 17, 2012) (Doc 2012-21516) | author=Stewart, David D. and Soong Johnston, Stephanie D. | journal=Tax Notes Today | year=2012 | month=October 29 | volume=2012 TNT 209-4 | issue=2012 TNT 209-4}}</ref>

Matthew Elias, founder of the [[Cryptocurrency Legal Advocacy Group]] (CLAG) published "Staying Between the Lines: A Survey of U.S. Income Taxation and its Ramifications on Cryptocurrencies", which discusses "the taxability of cryptocurrencies such as bitcoin."<ref name="BitCoin Tax issues Oct 2012">{{cite journal | title=2012 TNT 209-4 NEWS ANALYSIS: VIRTUAL CURRENCY: A NEW WORRY FOR TAX ADMINISTRATORS?. (Release Date: OCTOBER 17, 2012) (Doc 2012-21516) | author=Stewart, David D. and Soong Johnston, Stephanie D. | journal=Tax Notes Today | year=2012 | month=October 29 | volume=2012 TNT 209-4 | issue=2012 TNT 209-4}}</ref> CLAG "stressed the importance for taxpayers to determine on their own whether taxes are due on a bitcoin-related transaction based on whether one has "experienced a realization event."<ref name="BitCoin Tax issues Oct 2012">{{cite journal | title=2012 TNT 209-4 NEWS ANALYSIS: VIRTUAL CURRENCY: A NEW WORRY FOR TAX ADMINISTRATORS?. (Release Date: OCTOBER 17, 2012) (Doc 2012-21516) | author=Stewart, David D. and Soong Johnston, Stephanie D. | journal=Tax Notes Today | year=2012 | month=October 29 | volume=2012 TNT 209-4 | issue=2012 TNT 209-4}}</ref> Such examples are "when a taxpayer has provided a service in exchange for bitcoins, a realization event has probably occurred, and any gain or loss would likely be calculated using fair market values for the service provided."<ref name="BitCoin Tax issues Oct 2012">{{cite journal | title=2012 TNT 209-4 NEWS ANALYSIS: VIRTUAL CURRENCY: A NEW WORRY FOR TAX ADMINISTRATORS?. (Release Date: OCTOBER 17, 2012) (Doc 2012-21516) | author=Stewart, David D. and Soong Johnston, Stephanie D. | journal=Tax Notes Today | year=2012 | month=October 29 | volume=2012 TNT 209-4 | issue=2012 TNT 209-4}}</ref>

[[Peter Vessenes]], [[Bitcoin Foundation|Bitcoin Foundation's]] executive director, said, since the foundation is trying to pay for everything in bitcoin, including salaries, "How do we W-2 someone for their bitcoins? Do we mark-to-market every time a transfer happens? Payroll companies cringe."<ref name="BitCoin Tax issues Oct 2012">{{cite journal | title=2012 TNT 209-4 NEWS ANALYSIS: VIRTUAL CURRENCY: A NEW WORRY FOR TAX ADMINISTRATORS?. (Release Date: OCTOBER 17, 2012) (Doc 2012-21516) | author=Stewart, David D. and Soong Johnston, Stephanie D. | journal=Tax Notes Today | year=2012 | month=October 29 | volume=2012 TNT 209-4 | issue=2012 TNT 209-4}}</ref> The Bitcoin Foundation hopes "to push for solid guidance about its legal and tax treatment." [[Patrick Murck]], legal counsel for the Bitcoin Foundation, said he would like "to help regulators understand the technology better so they can make better decisions."<ref name="BitCoin Tax issues Oct 2012">{{cite journal | title=2012 TNT 209-4 NEWS ANALYSIS: VIRTUAL CURRENCY: A NEW WORRY FOR TAX ADMINISTRATORS?. (Release Date: OCTOBER 17, 2012) (Doc 2012-21516) | author=Stewart, David D. and Soong Johnston, Stephanie D. | journal=Tax Notes Today | year=2012 | month=October 29 | volume=2012 TNT 209-4 | issue=2012 TNT 209-4}}</ref> Murck said, "Bitcoin has the potential to become much more than a niche currency, but it needs the guidance and understanding of regulators." and "The full potential of bitcoin could be realized through clearer guidelines and a better understanding by financial and tax regulators." and "Part of making that happen is to talk to regulators, the IRS, and tax professionals and helping them understand that bitcoin is not this nefarious thing, it's just software, it's a community, and there's nothing inherently nefarious about either of those things."<ref name="BitCoin Tax issues Oct 2012">{{cite journal | title=2012 TNT 209-4 NEWS ANALYSIS: VIRTUAL CURRENCY: A NEW WORRY FOR TAX ADMINISTRATORS?. (Release Date: OCTOBER 17, 2012) (Doc 2012-21516) | author=Stewart, David D. and Soong Johnston, Stephanie D. | journal=Tax Notes Today | year=2012 | month=October 29 | volume=2012 TNT 209-4 | issue=2012 TNT 209-4}}</ref>

==See Also==
* [[Introduction]]
* [[Getting started]]
* [[Using_Bitcoin|Detailed tutorial]]
* [[FAQ]]

==References==
<references />

[[Category:Digital currencies]]

Zerocoin

2014-04-04T17:35:49Z

Benbest: not stub

'''Zerocoin''' was conceived as cryptographic extension to [[Bitcoin]] that (if adopted) would bring true cryptographic anonymity to Bitcoin. It works at the protocol level and doesn't require new trusted parties or services, such as a [[Bitcoin Laundry|bitcoin laundry]].<ref name="Whitepaper">{{cite web | last = Ian Miers, Christina Garman, Matthew Green, Aviel D. Rubin | title = Zerocoin: Anonymous Distributed E-Cash from Bitcoin | work = Whitepaper | publisher = The Johns Hopkins University Department of Computer Science | url = http://spar.isi.jhu.edu/~mgreen/ZerocoinOakland.pdf | accessdate = 2014-04-02 }}</ref> It was to replace the public transactions of Bitcoin with private transactions.<ref name="Whitepaper" /> Spending transactions would be made to appear as though they were from newly minted coins, because the serial number of the zerocoin would not appear in the blockchain.<ref name="Green_blog">{{cite web | last = Green | first = Matthew | title = Zerocoin: making Bitcoin anonymous | work = blog | publisher = Blogger | date = April 11, 2013 | url = http://blog.cryptographyengineering.com/2013/04/zerocoin-making-bitcoin-anonymous.html | accessdate = 2014-04-02 }}</ref> Subsequently, developer Matthew Green announced that Zerocoin would be independent of Bitcoin.<ref name="Forbes">{{cite news | last = Greenberg | first = Andy | title = Bitcoin Anonymity Upgrade Zerocoin To Become An Independent Cryptocurrency | publisher = FORBES | date = 13 January 2014 | url = http://www.forbes.com/sites/andygreenberg/2014/01/13/bitcoin-anonymity-upgrade-zerocoin-to-become-its-own-cryptocurrency/ | accessdate = 2014-04-02 }}</ref> Green did not believe that the Bitcoin community would integrate Zerocoin's protocol into Bitcoin because of fear of complete anonymity, additional mining costs, and a fear of new, untested features.<ref name="Forbes" />

== References ==
<references />
* https://bitcointalk.org/index.php?topic=152786.0
* http://bitcoin.stackexchange.com/questions/9716/does-the-zerocoin-protocol-fulfill-its-promise-of-anonymity
* http://research.microsoft.com/apps/video/default.aspx?id=192058
* http://online.wsj.com/article/SB10001424127887324373204578374611351125202.html

[[Category:Anonymity]]

VertCoin

2014-04-04T17:35:23Z

Benbest: Vertcoin page creation

'''VertCoin''' (VTC) was created in early 2014 to overcome concerns that the centralization of mining that has occurred with Bitcoin, has reduced the security of Bitcoin.<ref name="IBT">{{cite news | last = Charlton | first = Alistair | title = Vertcoin: The Soaring Cryptocurrency Set to Surpass Bitcoin | publisher = INTERNATIONAL BUSINESS TIMES | date = 5 February 2014 | url = http://www.ibtimes.co.uk/vertcoin-soaring-cryptocurrency-set-surpass-bitcoin-1435261 | accessdate = 2014-04-04 }}</ref> VertCoin is advertised as being [[Mining#ASIC_Mining|ASIC]] resistent and [[multipool]] resistant.<ref name="Vertorg">{{cite web | title = Vertcoin strengthens the distributed nature of cryptocurrencies with its innovative approach | publisher = Vertcoin.org | url = https://vertcoin.org/ | accessdate = 2014-04-04 }}</ref>

== References ==
<references />
* https://bitcointalk.org/index.php?topic=404364.0
* http://vertcoin.com/

Digital currency

2014-04-04T17:06:12Z

Benbest: /* See Also */ List of alternative cryptocurrencies, alphabetize

A '''digital currency''', (also known as crypto-currency, cyber currency, digital cash, digital currency, digital money, e-currency, e-money, electronic cash, electronic currency, electronic money) refers to money or scrip which is only exchanged electronically.

When money transfers occur as a bank wire transfer or ACH payment, or even transfers of money using services such as [[PayPal]], the funds are sent electronically but the currency transmitted is representative money and what transfers is an underlying fiat currency.

==See Also==
* [[BTConvert]]
* [[List of alternative cryptocurrencies]]
* [[:Category:Money transmitters|Money transmitters]]
* [[Redeemable code]]

==External Links==
* [http://en.wikipedia.org/wiki/Electronic_money Electronic Money] article on Wikipedia

Zerocoin

2014-04-02T19:55:18Z

Benbest: expand content, provide citations, update information

{{stub}}
'''Zerocoin''' was conceived as cryptographic extension to [[Bitcoin]] that (if adopted) would bring true cryptographic anonymity to Bitcoin. It works at the protocol level and doesn't require new trusted parties or services, such as a [[Bitcoin Laundry|bitcoin laundry]].<ref name="Whitepaper">{{cite web | last = Ian Miers, Christina Garman, Matthew Green, Aviel D. Rubin | title = Zerocoin: Anonymous Distributed E-Cash from Bitcoin | work = Whitepaper | publisher = The Johns Hopkins University Department of Computer Science | url = http://spar.isi.jhu.edu/~mgreen/ZerocoinOakland.pdf | accessdate = 2014-04-02 }}</ref> It was to replace the public transactions of Bitcoin with private transactions.<ref name="Whitepaper" /> Spending transactions would be made to appear as though they were from newly minted coins, because the serial number of the zerocoin would not appear in the blockchain.<ref name="Green_blog">{{cite web | last = Green | first = Matthew | title = Zerocoin: making Bitcoin anonymous | work = blog | publisher = Blogger | date = April 11, 2013 | url = http://blog.cryptographyengineering.com/2013/04/zerocoin-making-bitcoin-anonymous.html | accessdate = 2014-04-02 }}</ref> Subsequently, developer Matthew Green announced that Zerocoin would be independent of Bitcoin.<ref name="Forbes">{{cite news | last = Greenberg | first = Andy | title = Bitcoin Anonymity Upgrade Zerocoin To Become An Independent Cryptocurrency | publisher = FORBES | date = 13 January 2014 | url = http://www.forbes.com/sites/andygreenberg/2014/01/13/bitcoin-anonymity-upgrade-zerocoin-to-become-its-own-cryptocurrency/ | accessdate = 2014-04-02 }}</ref> Green did not believe that the Bitcoin community would integrate Zerocoin's protocol into Bitcoin because of fear of complete anonymity, additional mining costs, and a fear of new, untested features.<ref name="Forbes" />

== References ==
<references />
* https://bitcointalk.org/index.php?topic=152786.0
* http://bitcoin.stackexchange.com/questions/9716/does-the-zerocoin-protocol-fulfill-its-promise-of-anonymity
* http://research.microsoft.com/apps/video/default.aspx?id=192058
* http://online.wsj.com/article/SB10001424127887324373204578374611351125202.html

[[Category:Anonymity]]

Clients

2014-04-02T17:24:40Z

Benbest: /* Overview */ Add introductory description

==Overview==
A bitcoin client is the end-user software that facilitates [[private key]] generation and security, payment sending on behalf of a private key, and optionally provides:
* Useful information about the state of the network and transactions.
* Information related to the private keys under its management.
* Syndication of network events to other peer clients.

This table compares the features of the different clients. All of the listed clients are open-source.

===Feature key===

; Wallet Security : How well the client protects your [[private key]]s from people with access to the machine the wallet is stored on. The private keys can be encrypted, for example. The private keys can also be either stored on your device or on a remote server.
; Network Security : Clients which more fully implement the Bitcoin network protocol are safer -- they can't be as easily tricked by powerful attackers. A client which ''fully'' implements the protocol will always use the correct [[block chain]] and will never allow [[double-spending|double-spends]] or invalid transactions to exist in the block chain under any circumstances. Clients which only ''partially'' implement the protocol typically trust that 50% or more of the network's mining power is honest. Some clients trust one or more ''remote servers'' to protect them from double-spends and other network attacks.
; Setup Time : Some clients require that you download and verify a large amount of data before you can send or receive BTC.
; Maturity : When the project was started.

===Table===


{| class='wikitable' style='text-align: center'
! Client !! Get Started !! Audience !! Wallet Security !! Network Security !! Backups !! Setup Time !! Disk Space !! Maturity !! Multi-user !! Available for
|-
! Armory
|| [http://bitcoinarmory.com/index.php/get-armory Download] || Power users || {{CLGood|Encrypted, on-device}} || Addon || {{CLBest|One-time}} || Varies || {{CLBad|6+ GB}} || Jul 2011 || {{CLBest|Multi-wallet}} || {{CLLinux}}{{CLWin}}
|-
! Bitcoin Wallet
|| [https://play.google.com/store/apps/details?id=de.schildbach.wallet Google Play] [https://appworld.blackberry.com/webstore/content/23952882/ BlackBerry World] || {{CLGood|End-users}} || {{CLGood|Isolated, on-device}} || Partial || Manual || {{CLBest|Instant}} || {{CLGood|15 MB}} || {{CLGood|Mar 2011}} || on JB tablets || {{CLAndroid}} [[file:ico-blackberry.png]]
|-
! {{CLGood|Bitcoin-Qt}}
|| [http://sourceforge.net/projects/bitcoin/files/Bitcoin/ Download] || {{CLGood|End-users}} || {{CLGood|Encrypted, on-device}} || {{CLBest|Full}} || Manual || {{CLBad|Hours}} || {{CLBad|6+ GB}} || {{CLGood|May 2011}} || No || {{CLLinux}}{{CLMac}}{{CLWin}}
|-
! bitcoind
|| [http://sourceforge.net/projects/bitcoin/files/Bitcoin/ Download] || Programmers || {{CLGood|Encrypted, on-device}} || {{CLBest|Full}} || Manual || {{CLBad|Hours}} || {{CLBad|6+ GB}} || {{CLBest|Aug 2009}} || {{CLGood|Virtual accounts}} || {{CLLinux}}{{CLWin}}
|-
! Electrum
|| [http://ecdsa.org/electrum/ Download] || Power users || {{CLGood|Encrypted, on-device}} || Minimal || {{CLBest|Memorized}} || {{CLGood|Minutes}} || {{CLGood|5 MB}} || Nov 2011 || No || {{CLLinux}}{{CLMac}}{{CLWin}}
|-
! GreenAddress
|| [https://greenaddress.it Web] [https://chrome.google.com/webstore/detail/greenaddressit/dgbimgjoijjemhdamicmljbncacfndmp ChromeApp] [https://play.google.com/store/apps/details?id=it.greenaddress.cordova&hl=en Google Play] || {{CLBest|Everyone}} || {{CLGood|Encrypted, on-device}} || {{CLBad|Remote}} || Memorized/Manual || {{CLBest|Instant}} || {{CLBest|None}} || Apr 2013 || {{CLBest|Yes}} || {{CLAndroid}}{{CLLinux}}{{CLMac}}{{CLWin}}
|-
! MultiBit
|| [https://multibit.org/releases.html Download] || {{CLGood|End-users}} || {{CLGood|Encrypted, on-device}} || Partial || {{CLGood|Automatic (local)}} || {{CLBest|Seconds}} || 50 MB || Jul 2011 || {{CLBest|Multi-wallet}} || {{CLLinux}}{{CLMac}}{{CLWin}}
|-
! My Wallet
|| [https://blockchain.info/wallet/new Web-based] || {{CLBest|Everyone}} || Encrypted, on a server || {{CLBad|Remote}} || {{CLGood|Automatic}} || {{CLGood|Minutes}} || {{CLBest|None}} || Dec 2011 || {{CLBest|Yes}} || {{CLAndroid}}{{CLiOS}}{{CLLinux}}{{CLMac}}{{CLWin}}
|-
! Gocoin
|| [https://github.com/piotrnar/gocoin Build yourself] || Power users || Designated offline PC || {{CLBest|Full}} || {{CLBest|Memorized}} || {{CLBad|Hours}} || {{CLBad|6+GB}} || May 2013 || {{CLBest|Multi-wallet}} || {{CLLinux}}{{CLMac}}{{CLWin}}
|}



==For developers==

This table shows additional information about various Bitcoin clients that may be relevant to developers.

{| class='wikitable' style='text-align: center'
! Client !! Website !! Source Code !! License !! Discussion !! Architecture
|-
! Armory
|| [http://bitcoinarmory.com/ Link] ||[https://github.com/etotheipi/BitcoinArmory/ Github] || AGPLv3 || [https://bitcointalk.org/index.php?board=97.0 Bitcointalk] || Integrated
|-
! Bitcoin Wallet
|| [https://github.com/schildbach/bitcoin-wallet Link] || [https://github.com/schildbach/bitcoin-wallet Github] [https://code.google.com/p/bitcoin-wallet/source/checkout Google Code] || GPLv3 || [https://plus.google.com/b/101256420499771441772/communities/105515929887248493912 Google+ community] / [https://bitcointalk.org/index.php?board=100.0 Bitcointalk] || [[Thin Client Security#Simplified Payment Verification (SPV)|SPV]]
|-
! Bitcoin-Qt / bitcoind
|| [http://bitcoin.org/ Link] || [https://github.com/bitcoin/bitcoin Github] || MIT || [https://lists.sourceforge.net/lists/listinfo/bitcoin-development Sourceforge] || Integrated
|-
! Electrum
|| [http://ecdsa.org/electrum/ Link] || [https://gitorious.org/electrum Gitorious] || GPLv3 || [https://lists.sourceforge.net/lists/listinfo/electrum-discuss Sourceforge] || [[Thin Client Security#Simplified Payment Verification (SPV)|SPV]]
|-
! GreenAddress
|| [https://greenaddress.it/ Link] || [https://github.com/greenaddress/ Github] || LGPLv3 || [https://bitcointalk.org/index.php?topic=521988.0 Bitcointalk] || [[Server-Client+SPV(Electrum)]]
|-
! MultiBit
|| [http://multibit.org/ Link] || [https://github.com/jim618/multibit Github] || MIT || [https://groups.google.com/forum/?fromgroups#!forum/bitcoin-multibit Google Groups] || [[Thin Client Security#Simplified Payment Verification (SPV)|SPV]]
|-
! My Wallet
|| [https://blockchain.info/wallet/ Link] || [https://github.com/blockchain/My-Wallet/ Github] || BSD* || None || [[Thin Client Security#Server-Trusting Clients|Server-Client]]
|-
! bits of proof
|| [http://bitsofproof.com Link] || [https://github.com/bitsofproof/supernode Github] || Apache 2.0 || [https://bitcointalk.org/index.php?topic=122013.0 Bitcointalk] || [[Thin Client Security#Server-Trusting Clients|Server-Client]]
|-
! Gocoin
|| [http://www.assets-otc.com/gocoin Link] || [https://github.com/piotrnar/gocoin Github] || ? || [https://bitcointalk.org/index.php?topic=199306.0 Bitcointalk] || Integrated
|-
! btcd
|| [https://github.com/conformal/btcd Link] || [https://github.com/conformal/btcd Github] || ISC || [https://github.com/conformal/btcd#irc-server irc] || [[Thin Client Security#Server-Trusting Clients|Server-Client]]
|}

==See Also==
* [[Software#Bitcoin_clients|List of clients]]
* [[Bitcoin Ladder]]

<references/>

User:Benbest

2014-04-02T16:03:03Z

Benbest: Create page with information about myself

As of the beginning of April, 2014 I have nearly six thousand edits on Wikipedia under the same User name as I am using for this wiki: BenBest

https://en.wikipedia.org/wiki/User:Benbest

I am editing under my "real name", the name I was born with, and I have a biographical entry on Wikpedia:

https://en.wikipedia.org/wiki/Ben_Best

I hope to be as helpful in creating content on this wiki as I have been on Wikipedia.