My notes from a talk by Eric Brigham from TruCoin talking about BitCoin.
- BitCoin is “digital cash” — you can lose it just like you can lose a $100 bill and there isn’t a central source.
- Digicash (1990 – 1998) focused on security.
- Paypal (1998 – ) focused on convenience.
- Both required centralize servers to solve double spending problem.
- BitCoin solves the double spending problem without needing a centralized server. The transaction log is handled via P2P.
- BitCoin was created by Satoshi Nakamoto – it is unclear to who he actually is or even if he is a single person.
- A look at the code reveals that Satoshi is not a professional developer.
- BitCoin is the worlds first cryptographically secure distributed digital notary service.
- The number of BitCoins should level off to about 21,000,000 over the next 50 years.
- BitCoins are created via computational effort so they represent “computer work”.
- Cheating isn’t prevented, it is just made very expensive.
- A BitCoin address is a base 58 encoded public key.
- A transaction is simply a digitally signed message.
- It is theoretically possible to rewrite the transaction history, but it is very computationally expensive and is getting exponentially more expensive.
- If two separate people find the next coin at the same time, the chain that wins is the one that gets the next coin found on top of it.
- Most of the security issues have nothing to do with BitCoin, but they can be stolen in the same way that cash can be stolen.
- DOS attack are possible, but haven’t been much of an issue.
- Biggest known attack is if someone possesses >50% of the total network computational power you can double spend coins.
- It is very difficult to operate anonymously with BitCoin.
- People are working on a multi-signature transaction that would allow e-wallet type transactions similar to Paypal where a central site would keep part of your signature.
