Based on the information presented within the “Bitcoin: A Peer-to-Peer Cash System” white paper by Satoshi Nakamoto, the Bitcoin system was developed with several advantages:
1. A system of electronic transactions that does not rely on trust
2. Strong control of ownership
3. Safeguard allowing for a decreasing probability of double spend over time based on higher CPU power of honest nodes when compared to attacker nodes
4. Unstructured simplicity – Nodes work all at once with little coordination.
5. Anonymity – Nodes do not need to be identified, since messages are not routed to any particular place and only need to be delivered on a best effort basis.
6. At-will participation – Nodes can leave and rejoin the network at will, accepting the proof-of-work chain as proof of what happened while they were gone.
7. Acceptance of valid blocks – Nodes vote with their CPU power, expressing their acceptance of valid blocks by working on extending them and rejecting invalid blocks by refusing to work on them.
8. Enforcement – Any needed rules and incentives can be enforced with the consensus mechanism.
In summary, the preceding items are the main advantages of the Bitcoin system when compared to traditional financial mechanisms.
The following is a list of external resources associated with the “Bitcoin: A Peer-to-Peer Cash System” white paper:
1. Adam Back. Hashcash – A Denial Of Service Counter-Measure:
2. Bitcoin. Bitcoin: A Peer-to-Peer Electronic Cash System:
5. Dave Bayer, Stuart Haber, and W. Scott Stornetta. Improving the Efficiency and Reliability of Digital Time-Stamping:
6. H. Massias, X.S. Avila, and J.-J. Quisquater, “Design of a secure timestamping service with minimal trust requirements,” In 20th Symposium on Information Theory in the Benelux, May 1999.
7. Ralph C. Merkle. Protocols For Public Key Cryptosystems:
8. Satoshi Nakamoto. Bitcoin: A Peer-to-Peer Electronic Cash System:
9. Stuart Haber, W. Scott Stornetta. How To Time-Stamp A Digital Document:
10. Stuart Haber, W. Scott Stornetta. Secure Names For Bit Strings:
11. W. Dai. B-money:
12. W. Feller. An Introduction to Probability Theory and its Applications:
13. Wikipedia. Satoshi Nakamoto:
The following is a list of my brief analyses for each of the major points presented within the paper:
1. J.R. Sedivy. Bitcoin: A Peer-to-Peer Electronic Cash System Abstract:
2. J.R. Sedivy. Bitcoin Incentives:
3. J.R. Sedivy. Bitcoin Payment Verification:
4. J.R. Sedivy. Bitcoin Privacy:
5. J.R. Sedivy. Bitcoin Proof Of Work:
6. J.R. Sedivy. Bitcoin Transactions Demystified:
7. J.R. Sedivy. Cryptographic Proof And Honest Nodes:
8. J.R. Sedivy. The Irreversible Nature Of Bitcoin: