P2P Research List

[p2p-research] Bitcoin open source implementation of P2P currency

P2P Research List
#001347
From:
Satoshi Nakamoto
Subject:
[p2p-research] Bitcoin open source implementation of P2P currency
Date:
I've developed a new open source P2P e-cash system called Bitcoin. It's
completely decentralized, with no central server or trusted parties,
because everything is based on crypto proof instead of trust. Give it a
try, or take a look at the screenshots and design paper:

Download Bitcoin v0.1 at http://www.bitcoin.org

The root problem with conventional currency is all the trust that's
required to make it work. The central bank must be trusted not to
debase the currency, but the history of fiat currencies is full of
breaches of that trust. 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 generation ago, multi-user time-sharing computer systems had a similar
problem. Before strong encryption, users had to rely on password
protection to secure their files, placing trust in the system
administrator to keep their information private. Privacy could always
be overridden by the admin based on his judgment call weighing the
principle of privacy against other concerns, or at the behest of his
superiors. Then strong encryption became available to the masses, and
trust was no longer required. Data could be secured in a way that was
physically impossible for others to access, no matter for what reason,
no matter how good the excuse, no matter what.

It's time we had the same thing for money. With e-currency based on
cryptographic proof, without the need to trust a third party middleman,
money can be secure and transactions effortless.

One of the fundamental building blocks for such a system is digital
signatures. A digital coin contains the public key of its owner. To
transfer it, the owner signs the coin together with the public key of
the next owner. Anyone can check the signatures to verify the chain of
ownership. It works well to secure ownership, but leaves one big
problem unsolved: double-spending. Any owner could try to re-spend an
already spent coin by signing it again to another owner. The usual
solution is for a trusted company with a central database to check for
double-spending, but that just gets back to the trust model. In its
central position, the company can override the users, and the fees
needed to support the company make micropayments impractical.

Bitcoin's solution is to use a peer-to-peer network to check for
double-spending. In a nutshell, the network works like a distributed
timestamp server, stamping the first transaction to spend a coin. It
takes advantage of the nature of information being easy to spread but
hard to stifle. For details on how it works, see the design paper at
http://www.bitcoin.org/bitcoin.pdf

The result is a distributed system with no single point of failure.
Users hold the crypto keys to their own money and transact directly with
each other, with the help of the P2P network to check for double-spending.

Satoshi Nakamoto
http://www.bitcoin.org

P2P Research List
#001348
From:
Michel Bauwens
Subject:
[p2p-research] Bitcoin open source implementation of P2P currency
Date:
Replying to:>>001347
Thanks for sharing this initiative, I hope some of our more expert members
will intervene.

I have an extra request if possible, our pages on Japanese initiatives, I'm
assuming that is where you are based, though I could of course be wrong, are
still very undeveloped, so I'm wondering if you could not add a few of the
important open/free and commons oriented initiatives that you know about,
including your own.

See http://p2pfoundation.net/Japan

Michel

On Thu, Feb 12, 2009 at 5:30 AM, Satoshi Nakamoto <satoshin at gmx.com> wrote:

> I've developed a new open source P2P e-cash system called Bitcoin. It's
> completely decentralized, with no central server or trusted parties, because
> everything is based on crypto proof instead of trust. Give it a try, or
> take a look at the screenshots and design paper:
>
> Download Bitcoin v0.1 at http://www.bitcoin.org
>
> The root problem with conventional currency is all the trust that's
> required to make it work. The central bank must be trusted not to debase
> the currency, but the history of fiat currencies is full of breaches of that
> trust. 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 generation ago, multi-user time-sharing computer systems had a similar
> problem. Before strong encryption, users had to rely on password protection
> to secure their files, placing trust in the system administrator to keep
> their information private. Privacy could always be overridden by the admin
> based on his judgment call weighing the principle of privacy against other
> concerns, or at the behest of his superiors. Then strong encryption became
> available to the masses, and trust was no longer required. Data could be
> secured in a way that was physically impossible for others to access, no
> matter for what reason, no matter how good the excuse, no matter what.
>
> It's time we had the same thing for money. With e-currency based on
> cryptographic proof, without the need to trust a third party middleman,
> money can be secure and transactions effortless.
>
> One of the fundamental building blocks for such a system is digital
> signatures. A digital coin contains the public key of its owner. To
> transfer it, the owner signs the coin together with the public key of the
> next owner. Anyone can check the signatures to verify the chain of
> ownership. It works well to secure ownership, but leaves one big problem
> unsolved: double-spending. Any owner could try to re-spend an already spent
> coin by signing it again to another owner. The usual solution is for a
> trusted company with a central database to check for double-spending, but
> that just gets back to the trust model. In its central position, the
> company can override the users, and the fees needed to support the company
> make micropayments impractical.
>
> Bitcoin's solution is to use a peer-to-peer network to check for
> double-spending. In a nutshell, the network works like a distributed
> timestamp server, stamping the first transaction to spend a coin. It takes
> advantage of the nature of information being easy to spread but hard to
> stifle. For details on how it works, see the design paper at
> http://www.bitcoin.org/bitcoin.pdf
>
> The result is a distributed system with no single point of failure. Users
> hold the crypto keys to their own money and transact directly with each
> other, with the help of the P2P network to check for double-spending.
>
> Satoshi Nakamoto
> http://www.bitcoin.org
>
> _______________________________________________
> p2presearch mailing list
> p2presearch at listcultures.org
> http://listcultures.org/mailman/listinfo/p2presearch_listcultures.org
>



--
The P2P Foundation researches, documents and promotes peer to peer
alternatives.

Wiki and Encyclopedia, at http://p2pfoundation.net; Blog, at
http://blog.p2pfoundation.net; Newsletter, at
http://integralvisioning.org/index.php?topic=p2p

Basic essay at http://www.ctheory.net/articles.aspx?id=499; interview at
http://poynder.blogspot.com/2006/09/p2p-very-core-of-world-to-come.html
BEST VIDEO ON P2P:
http://video.google.com.au/videoplay?docid=4549818267592301968&hl=en-AU

KEEP UP TO DATE through our Delicious tags at http://del.icio.us/mbauwens

The work of the P2P Foundation is supported by SHIFTN,
http://www.shiftn.com/
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P2P Research List
#001355
From:
Martien van Steenbergen
Subject:
[p2p-research] Bitcoin open source implementation of P2P currency
Date:
Replying to:>>001347
Replies:>>001356
Very interesting. Is this akin to David Chaum's anonymous digital
money? His concept makes sure money is anonymous unless it is
compromised, i.e. the same money spent more than once. As soon as it's
compromised, the ‘counterfeiter’ is immediately publicly exposed.

Also, in bitcoin, is there a limited supply of money (that must be
managed)? Or is money created exaclty at the moment of transaction?

Succes en plezier,

Martien.

On 11 Feb 2009, at 23:30 , Satoshi Nakamoto wrote:

> I've developed a new open source P2P e-cash system called Bitcoin.
> It's completely decentralized, with no central server or trusted
> parties, because everything is based on crypto proof instead of
> trust. Give it a try, or take a look at the screenshots and design
> paper:
>
> Download Bitcoin v0.1 at http://www.bitcoin.org
>
> The root problem with conventional currency is all the trust that's
> required to make it work. The central bank must be trusted not to
> debase the currency, but the history of fiat currencies is full of
> breaches of that trust. 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 generation ago, multi-user time-sharing computer systems had a
> similar problem. Before strong encryption, users had to rely on
> password protection to secure their files, placing trust in the
> system administrator to keep their information private. Privacy
> could always be overridden by the admin based on his judgment call
> weighing the principle of privacy against other concerns, or at the
> behest of his superiors. Then strong encryption became available to
> the masses, and trust was no longer required. Data could be secured
> in a way that was physically impossible for others to access, no
> matter for what reason, no matter how good the excuse, no matter what.
>
> It's time we had the same thing for money. With e-currency based on
> cryptographic proof, without the need to trust a third party
> middleman, money can be secure and transactions effortless.
>
> One of the fundamental building blocks for such a system is digital
> signatures. A digital coin contains the public key of its owner.
> To transfer it, the owner signs the coin together with the public
> key of the next owner. Anyone can check the signatures to verify
> the chain of ownership. It works well to secure ownership, but
> leaves one big problem unsolved: double-spending. Any owner could
> try to re-spend an already spent coin by signing it again to another
> owner. The usual solution is for a trusted company with a central
> database to check for double-spending, but that just gets back to
> the trust model. In its central position, the company can override
> the users, and the fees needed to support the company make
> micropayments impractical.
>
> Bitcoin's solution is to use a peer-to-peer network to check for
> double-spending. In a nutshell, the network works like a
> distributed timestamp server, stamping the first transaction to
> spend a coin. It takes advantage of the nature of information being
> easy to spread but hard to stifle. For details on how it works, see
> the design paper at http://www.bitcoin.org/bitcoin.pdf
>
> The result is a distributed system with no single point of failure.
> Users hold the crypto keys to their own money and transact directly
> with each other, with the help of the P2P network to check for
> double-spending.
>
> Satoshi Nakamoto
> http://www.bitcoin.org
>
> _______________________________________________
> p2presearch mailing list
> p2presearch at listcultures.org
> http://listcultures.org/mailman/listinfo/p2presearch_listcultures.org


P2P Research List
#001356
From:
Satoshi Nakamoto
Subject:
[p2p-research] Bitcoin open source implementation of P2P currency
Date:
Replying to:>>001355
Replies:>>001357
Martien van Steenbergen wrote:
> Very interesting. Is this akin to David Chaum's anonymous digital money?
> His concept makes sure money is anonymous unless it is compromised, i.e.
> the same money spent more than once. As soon as it's compromised, the
> ‘counterfeiter’ is immediately publicly exposed.

It's similar in that it uses digital signatures for coins, but different
in the approach to privacy and preventing double-spending. The
recipient of a Bitcoin payment is able to check whether it is the first
spend or not, and second-spends are not accepted. There isn't an
off-line mode where double-spenders are caught and shamed after the
fact, because that would require participants to have identities.

To protect privacy, key pairs are used only once, with a new one for
every transaction. The owner of a coin is just whoever has its private key.

Of course, the biggest difference is the lack of a central server. That
was the Achilles heel of Chaumian systems; when the central company shut
down, so did the currency.

> Also, in bitcoin, is there a limited supply of money (that must be
> managed)? Or is money created exaclty at the moment of transaction?

There is a limited supply of money. Circulation will be 21,000,000
coins. Transactions only transfer ownership.

Thank you for your questions,

Satoshi

http://www.bitcoin.org

P2P Research List
#001357
From:
Martien van Steenbergen
Subject:
[p2p-research] Bitcoin open source implementation of P2P currency
Date:
Replying to:>>001356
Replies:>>001362

On 12 Feb 2009, at 20:01 , Satoshi Nakamoto wrote:

> Martien van Steenbergen wrote:
>> Very interesting. Is this akin to David Chaum's anonymous digital
>> money? His concept makes sure money is anonymous unless it is
>> compromised, i.e. the same money spent more than once. As soon as
>> it's compromised, the ‘counterfeiter’ is immediately publicly
>> exposed.
>
> It's similar in that it uses digital signatures for coins, but
> different in the approach to privacy and preventing double-
> spending. The recipient of a Bitcoin payment is able to check
> whether it is the first spend or not, and second-spends are not
> accepted. There isn't an off-line mode where double-spenders are
> caught and shamed after the fact, because that would require
> participants to have identities.

Thanks for clearing this up.

> To protect privacy, key pairs are used only once, with a new one for
> every transaction. The owner of a coin is just whoever has its
> private key.

IC.

> Of course, the biggest difference is the lack of a central server.
> That was the Achilles heel of Chaumian systems; when the central
> company shut down, so did the currency.

Yes, that's really great. Reminds me of:

AardRock » Wizard Rabbit Treasurer; and
AardRock » Pekunio

>> Also, in bitcoin, is there a limited supply of money (that must be
>> managed)? Or is money created exaclty at the moment of transaction?
>
> There is a limited supply of money. Circulation will be 21,000,000
> coins. Transactions only transfer ownership.

Would love to also see support for not having to supply and managing
money. Would make it easier and cheaper to maintain and results in
have sufficient money, always and everywhere. No scarcity, no
abundance, exactly the right amount all times, self-organizing.

Are you familiar with Ripple?

Is bitcoin also available as a protocol spec (facilitating differen
language bindings and implementations; unite on specs, compete on
implementation).

Succes en plezier,

Martien.
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P2P Research List
#001362
From:
Satoshi Nakamoto
Subject:
[p2p-research] Bitcoin open source implementation of P2P currency
Date:
Replying to:>>001357
Replies:>>001366
Martien van Steenbergen wrote:
> Would love to also see support for not having to supply and
> managing money. Would make it easier and cheaper to maintain
> and results in have sufficient money, always and everywhere.
> No scarcity, no abundance, exactly the right amount all times,
> self-organizing.

That's do-able. It can be programmed to follow any set of rules.

I see Bitcoin as a foundation and first step if you want to implement
programmable P2P social currencies like Marc's ideas and others
discussed here. First you need normal, basic P2P currency working.
Once that is established and proven out, dynamic smart money is an easy
next step.

I love the idea of virtual, non-geographic communities experimenting
with new economic paradigms.

> Reminds me of:
>
> * AardRock » Wizard Rabbit Treasurer
> <http://wiki.aardrock.com/Wizard_Rabbit_Treasurer>; and
> * AardRock » Pekunio <http://wiki.aardrock.com/Pekunio>

Indeed, it is much like Pekunio in the concept of spraying redundant
copies of every transaction to a number of peers on the network, but the
implementation is not a reputation network like Wizard Rabbit Treasurer.
In fact, Bitcoin does not use reputation at all. It sees the network
as just a big crowd and doesn't much care who it talks to or who tells
it something, as long as at least one of them relays the information
being broadcast around the network. It doesn't care because there's no
way to lie to it. Either you tell it crypto proof of something, or it
ignores you.

> Are you familiar with Ripple?

As trust systems go, Ripple is unique in spreading trust around rather
than concentrating it.

> Is bitcoin also available as a protocol spec (facilitating differen
> language bindings and implementations; unite on specs, compete on
> implementation).

It would be best to refer to the C++ source code. I plan to implement
interfaces for using the software to send and receive transactions from
any language, so server side code can easily use it for web based
e-commerce sites.

Satoshi

P2P Research List
#001366
From:
Michel Bauwens
Subject:
[p2p-research] Bitcoin open source implementation of P2P currency
Date:
Replying to:>>001362
Replies:>>001370
Hi Satoshi,

how operational is your project? how soon do you think people will be able
to use it in real life?

Michel

On Fri, Feb 13, 2009 at 9:31 AM, Satoshi Nakamoto <satoshin at gmx.com> wrote:

> Martien van Steenbergen wrote:
> > Would love to also see support for not having to supply and
> > managing money. Would make it easier and cheaper to maintain
> > and results in have sufficient money, always and everywhere.
> > No scarcity, no abundance, exactly the right amount all times,
> > self-organizing.
>
> That's do-able. It can be programmed to follow any set of rules.
>
> I see Bitcoin as a foundation and first step if you want to implement
> programmable P2P social currencies like Marc's ideas and others discussed
> here. First you need normal, basic P2P currency working. Once that is
> established and proven out, dynamic smart money is an easy next step.
>
> I love the idea of virtual, non-geographic communities experimenting with
> new economic paradigms.
>
> Reminds me of:
>>
>> * AardRock » Wizard Rabbit Treasurer
>> <http://wiki.aardrock.com/Wizard_Rabbit_Treasurer>; and
>> * AardRock » Pekunio <http://wiki.aardrock.com/Pekunio>
>>
>
> Indeed, it is much like Pekunio in the concept of spraying redundant copies
> of every transaction to a number of peers on the network, but the
> implementation is not a reputation network like Wizard Rabbit Treasurer. In
> fact, Bitcoin does not use reputation at all. It sees the network as just a
> big crowd and doesn't much care who it talks to or who tells it something,
> as long as at least one of them relays the information being broadcast
> around the network. It doesn't care because there's no way to lie to it.
> Either you tell it crypto proof of something, or it ignores you.
>
> Are you familiar with Ripple?
>>
>
> As trust systems go, Ripple is unique in spreading trust around rather than
> concentrating it.
>
> Is bitcoin also available as a protocol spec (facilitating differen
>> language bindings and implementations; unite on specs, compete on
>> implementation).
>>
>
> It would be best to refer to the C++ source code. I plan to implement
> interfaces for using the software to send and receive transactions from any
> language, so server side code can easily use it for web based e-commerce
> sites.
>
> Satoshi
>
>
> _______________________________________________
> p2presearch mailing list
> p2presearch at listcultures.org
> http://listcultures.org/mailman/listinfo/p2presearch_listcultures.org
>



--
The P2P Foundation researches, documents and promotes peer to peer
alternatives.

Wiki and Encyclopedia, at http://p2pfoundation.net; Blog, at
http://blog.p2pfoundation.net; Newsletter, at
http://integralvisioning.org/index.php?topic=p2p

Basic essay at http://www.ctheory.net/articles.aspx?id=499; interview at
http://poynder.blogspot.com/2006/09/p2p-very-core-of-world-to-come.html
BEST VIDEO ON P2P:
http://video.google.com.au/videoplay?docid=4549818267592301968&hl=en-AU

KEEP UP TO DATE through our Delicious tags at http://del.icio.us/mbauwens

The work of the P2P Foundation is supported by SHIFTN,
http://www.shiftn.com/
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P2P Research List
#001370
From:
Satoshi Nakamoto
Subject:
[p2p-research] Bitcoin open source implementation of P2P currency
Date:
Replying to:>>001366
Michel Bauwens wrote:
> how operational is your project? how soon do you think people will be
> able to use it in real life?

It's fully operational and the network is growing. If you try the
software, e-mail me your Bitcoin address and I'll send you a few coins.

We just need to spread the word and keep getting more people interested.

I'll forward the release introduction in the next message.

Satoshi

http://www.bitcoin.org