Bitcoin: Difference between revisions
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Revision as of 22:43, 14 August 2011
Bitcoin is a decentralized cryptocurrency invented by programmer Satoshi Nakamoto, who also developed the Original Bitcoin client. It allows for anonymous and secure ownership and transfers of amounts of bitcoins, without relying on any central server to process the transactions or store the accounts.
Bitcoin is currently accepted in exchange for other currencies, such as dollars and euros, as well as directly for services and tangible goods.
History
- Main article: History of Bitcoin
The first mention of the concept of cryptocurrency is said to have been made in 1998 by Wei Dai on the cypherpunks mailing list, and Bitcoin can trace its origin to the B-money Proposal. Related to this is the more recent Bit Gold proposal by Nick Szabo.
The paper Bitcoin: A Peer-to-Peer Electronic Cash System describes the early concepts behind Bitcoin[1] and and precedes the first release of Bitcoin software.
The Bitcoin project was registered on November 9th, 2008. The Bitcoin network started up on January 3rd, 2009 with the genesis block. The genesis block contains a media reference to the dealings of a central banker in the UK.
On February 9, 2011, and for a few days afterwards, Bitcoin sold for over $1 in most exchanges.
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 public key cryptography and thus may be vulnerable to 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.