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Announcing the first release of Bitcoin, a new electronic cash system that uses a peer-to-peer network to prevent double-spending. It's completely decentralized with no server or central authority.

Bitcoin is an implementation of Wei Dai‘s b-money proposal on Cypherpunks in 1998 and Nick Szabo’s Bitgold proposal.

SPV is not implemented yet, and won't be implemented until far in the future, but all the current implementation is designed around supporting it.

To modify a past block, an attacker would have to redo the proof-of-work of the block and all blocks after it and then catch up with and surpass the work of the honest nodes. We will show later that the probability of a slower attacker catching up diminishes exponentially as subsequent blocks are added.

The problem was, each thing required special support code and data fields whether it was used or not, and only covered one special case at a time. It would have been an explosion of special cases. The solution was script, which generalizes the problem so transacting parties can describe their transaction as a predicate that the node network evaluates.

Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts. Their massive overhead costs make micropayments impossible.

A lot of people automatically dismiss e-currency as a lost cause because of all the companies that failed since the 1990's. I hope it's obvious it was only the centrally controlled nature of those systems that doomed them. I think this is the first time we're trying a decentralized, non-trust-based system.

When a node finds a proof-of-work, the new block is propagated throughout the network and everyone adds it to the chain and starts working on the next block after it. Any nodes that had the other transaction will stop trying to include it in a block, since it's now invalid according to the accepted chain.

We propose a solution to the double-spending problem using a peer-to-peer network. The network timestamps transactions by hashing them into an ongoing chain of hash-based proof-of-work, forming a record that cannot be changed without redoing the proof-of-work.

Bitcoin would be convenient for people who don't have a credit card or don't want to use the cards they have, either don't want the spouse to see it on the bill or don't trust giving their number to 'porn guys', or afraid of recurring billing.

I made the proof-of-work difficulty ridiculously easy to start with, so for a little while in the beginning a typical PC will be able to generate coins in just a few hours.

If you're sad about paying the fee, you could always turn the tables and run a node yourself and maybe someday rake in a 0.44 fee yourself.

A block header with no transactions would be about 80 bytes. If we suppose blocks are generated every 10 minutes, 80 bytes * 6 * 24 * 365 = 4.2MB per year. With computer systems typically selling with 2GB of RAM as of 2008, and Moore's Law predicting current growth of 1.2GB per year, storage should not be a problem even if the block headers must be kept in memory.

Nodes always consider the longest chain to be the correct one and will keep working on extending it.

The CPU proof-of-worker proof-of-work vote must have the final say. The only way for everyone to stay on the same page is to believe that the longest chain is always the valid one, no matter what.

For greater privacy, it's best to use bitcoin addresses only once.

With two-signature escrow, a cheater can’t win, but it’s still possible for you to lose. It at least takes away the profit motive for cheating you.

How does everyone feel about the B symbol with the two lines through the outside? Can we live with that as our logo?

A rational market price for something that is expected to increase in value will already reflect the present value of the expected future increases. In your head, you do a probability estimate balancing the odds that it keeps increasing.

The requirement is that the good guys collectively have more CPU proof-of-worker than any single attacker.

The coins are gradually released to the network's nodes based on the CPU proof-of-worker they contribute, so you can get a share of them by contributing your idle CPU time.

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