Bitcoin: A Peer-to-Peer Electronic Cash System

9 Pages Posted: 22 Aug 2019

See all articles by Craig S Wright

Craig S Wright

nChain; University of Southern Queensland - University of Southern Queensland, Students; Leicester Law School

Date Written: August 21, 2008

Abstract

A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without the burdens of going through a financial institution. Digital signatures provide part of the solution, but the main benefits are lost if a trusted third party is still required to prevent double-spending. 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. The longest chain not only serves as proof of the sequence of events witnessed, but proof that it came from the largest pool of CPU power. As long as honest nodes control the most CPU power on the network, they can generate the longest chain and outpace any attackers. The network itself requires minimal structure. Messages are broadcast on a best effort basis, and nodes can leave and rejoin the network at will, accepting the longest proof-of-work chain as proof of what happened while they were gone.

Keywords: BitCoin; Blockchain; law; smart contract; time chain; immutable

Suggested Citation

Wright, Craig S, Bitcoin: A Peer-to-Peer Electronic Cash System (August 21, 2008). Available at SSRN: https://ssrn.com/abstract=3440802 or http://dx.doi.org/10.2139/ssrn.3440802

Craig S Wright (Contact Author)

nChain ( email )

London
United Kingdom

University of Southern Queensland - University of Southern Queensland, Students ( email )

Toowoomba, Queensland
Australia

Leicester Law School ( email )

University Road
Leicester LE1 7RH, LE1 7RH
United Kingdom

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