Getting computers that do not trust each other to agree on a single shared record, with no central authority to settle disputes, is one of the hardest problems in distributed systems. In 2008 an author writing under the name Satoshi Nakamoto proposed a working answer and called it Bitcoin.
The idea
A blockchain is an append-only public ledger that mutually distrusting nodes agree on without any central authority, using proof of work, deliberate and costly computation, to decide whose version of the record stands.
The whitepaper
On 31 October 2008, a paper titled “Bitcoin: A Peer-to-Peer Electronic Cash System,” authored under the name Satoshi Nakamoto, was posted to a cryptography mailing list. It described the first decentralized cryptocurrency, a money system with no bank or government at its center.
How agreement works
Bitcoin runs as a peer-to-peer network in which each node keeps its own copy of a public ledger, the blockchain. Consensus on the contents of that ledger is reached through proof of work, a computationally intensive process called mining. Because rewriting history would require out-computing the rest of the network combined, the record is hard to forge without controlling most of the world’s mining power.
Why it matters
Whatever one makes of cryptocurrency, the technical achievement is real: agreement among untrusting parties with no trusted middleman. That is a genuinely new point in the design space of distributed consensus, which had always assumed either trust or a coordinator. It leans on hashing to chain each block to the last, making the ledger tamper-evident.
Related Notes
- Distributed Consensus, the problem blockchain attacks from a new angle
- Hash Tables, the hashing that chains the ledger
- Surveillance and Privacy, the politics of decentralized money
- History of the Internet, the network it runs on
- History of Computing, the section index
Sources
- “Bitcoin,” Wikipedia. https://en.wikipedia.org/wiki/Bitcoin . Supports the 31 October 2008 whitepaper under the name Satoshi Nakamoto, Bitcoin as a decentralized cryptocurrency whose peer-to-peer nodes each keep a copy of a public ledger (the blockchain), and consensus achieved through the proof-of-work process called mining without a central authority.