Note: On October 31, 2008, Satoshi Nakamoto published the Bitcoin white paper "Bitcoin: A Peer-to-Peer Electronic Cash System" on the P2P foundation website. On the 15th anniversary of the release of the white paper, Golden Finance once again published the Chinese version of the Bitcoin white paper in order to reread this classic that has forever changed the financial world.

Summary: A purely peer-to-peer version of an electronic cash system would allow online payments to be sent directly from one party to another without going through a financial institution. Digital signatures offer a partial solution, but the main advantage of electronic payments is negated if a trusted third party is still required to prevent double spending. We propose a solution that uses a peer-to-peer network to solve the double spending problem. The peer-to-peer network would timestamp each transaction by logging its hash into an ever-extending chain of hash-based proof-of-work, forming a record that cannot be changed without a complete redo. The longest chain serves as both proof of the events that were witnessed and their order, and proof that it came from the largest pool of CPU power. As long as the majority of CPU power is controlled by benign nodes — that is, they do not cooperate with nodes that are trying to attack the network — then benign nodes will generate the longest chain and outpace attackers. The network itself requires minimal structure. Information will be propagated on a best-effort basis, with nodes coming and going freely; but joining is always required to accept the longest proof-of-work chain as proof of everything that happened while they were not participating.

1. Introduction

Internet commerce relies almost entirely on financial institutions as trusted third parties to process electronic payments. While this system works well for most transactions, it is still hampered by the inherent flaws of a trust-based model. Completely irreversible transactions are not practically possible because financial institutions cannot avoid arbitration disputes. Arbitration costs increase transaction costs, which in turn limits the size of the smallest possible transaction and simply prevents many small payments from being made. In addition, there are even greater costs: the system cannot provide irreversible payments for services that are irreversible. The possibility of reversal creates an omnipresent demand for trust. Merchants must be wary of their customers, trouble customers to provide more information that would otherwise be unnecessary. A certain amount of fraud is considered inevitable. These costs and payment uncertainties are avoidable when physical currency is used directly between people; however, there is no mechanism for two parties to pay each other through a communication channel without one of them being trusted.

What is really needed is an electronic payment system based on cryptographic proofs rather than trust, allowing any two parties to transact directly without trusting a third party. Irreversible transactions guaranteed by computational power can help sellers avoid fraud, and daily guarantees to protect buyers are easy to implement. In this paper, we propose a solution to double spending, using a peer-to-peer, distributed timestamp server to generate computation-based proofs that record each transaction in chronological order. This system is secure as long as honest nodes collectively have more CPU power than a cooperating attacker.

2. Transactions

We define an electronic coin as a digital signature chain. When an owner hands a coin to another person, the following digital signature is appended to the end of the digital signature chain: the hash of the previous transaction and the public key of the new owner. The recipient can verify the ownership of the digital signature chain by verifying the signature.#BTC