Bitcoin: A Peer-to-Peer Electronic Cash System
Satoshi Nakamoto satoshin@gmx.com www.bitcoin.org
Abstract. A purely peer-to-peer version of electronie cash would allow online payments to be sent direetly from one party to another without going through a financial institution. Digital signatures provide part of the solution, but the main benefits are lost if a tmsted 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 a majority of CPU power is controlled by nodes that are not cooperating to attack the network, they'll generate the longest chain and outpace attackers. The network itself requires minimal stmcture. 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.
1. Introduction
Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments. Wh…