TheBitcoinP2Pnetwork.PDF

Joan Antoni Donet Donet, Cristina Perez-Sola, and Jordi Herrera-Joancomart Bitcoin is an online virtual currency based on public key cryptography. It was proposed in 2008 in a paper authored by someone behind the Satoshi Nakamoto pseudonym. Bitcoin became fully functional on January 2009 and its broad adop- tion, together with its high exchange rates with traditional currencies (EUR or USD), has made it the most successful virtual currency ever. Security issues have been solved using elliptic curve public key cryptography together with the help of hash functions. The fact that hash functions are one-way functions provides a way to dene an easily veriable and ne-grained adjustable proof-of-work. Furthermore, double-spending, probably the core problem of digital currencies, is prevented by maintaining a public non-modiable register, the blockchain, which includes all the transactions performed on the system. Besides its security robustness, two main properties have probably been its key to su