Bitcoin Basics #001 – What is Bitcoin?

By Albert Szmigielski Quite often I face the question: “What is Bitcoin?” And it comes from people who have not heard about Bitcoin. When I try to come up with a short answer, I usually reply: it is digital, programmable money. However the counterpoint always gets raised: “Digital money already exists, paypal, visa, e-transfers, etc.”. So let’s try to pin down what Bitcoin really is. To that end we started a Bitcoin Basics series, this is part #001. In short Bitcoin is software, a digital currency, a payment system, a decentralized, permissionless network, and an evolving organism with an immune system. Software, Digital Currency, Payment System It is noteworthy that Bitcoin is ever evolving. So the way we will define it today

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Bitcoin Security and Privacy

Bitcoin Security and Privacy By Albert Szmigielski Bitcoin is a decentralized currency and payment system. In order to be an effective and secure payment system it should satisfy several security requirements. The first of these requirements is fairness. On the surface Bitcoin meets the property as users can only sign for coins that they control. However, upon further examination of recent research we do see that several double-spend attacks have been performed that would negate the fairness property of Bitcoin. On the other hand Bitcoin does satisfy resistance to impersonation attacks very well. No one can obtain the private keys (assuming they are stored properly and securely) of another person in the system to sign their transactions. As a result

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Non-RTGS settlement system & Bitcoin.

Select one type of non-RTGS settlement system that exists in the existing financial system and highlight how it could theoretically work, in a Bitcoin-centric ecosystem The National Settlement Service (NSS) is a non-RTGS settlement system in the United States. Designated agents submit electronic files on behalf of participants in a clearing arrangement. The participants are depository institutions with accounts at a Reserve Bank. Once a file is submitted, verified, and processed the settlements are final. Each debit is checked against the account balance and intra-day credit of the participant in their Federal Reserve Bank. The NSS is owned and operated by the Federal Reserve Banks. In a Bitcoin-centric ecosystem there are more than one way to implement such a system. In

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