“If you don’t believe it or don’t get it, I don’t have the time to try to convince you, sorry.”
— Satoshi Nakamoto
“I’m sure that in 20 years there will either be very large transaction volume or no volume.”
“It might make sense just to get some in case it catches on.”
“The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.”
“The root problem with conventional currency is all the trust that’s required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust.”
“It is a global distributed database, with additions to the database by consent of the majority.”
“I’ve been working on a new electronic cash system that’s fully peer-to-peer, with no trusted third party.”
“Being open source means anyone can independently review the code. If it was closed source, nobody could verify the security. I think it’s essential for a program of this nature to be open source.”
“The nature of Bitcoin is such that once version 0.1 was released, the core design was set in stone for the rest of its lifetime.”
“Lost coins only make everyone else’s coins worth slightly more. Think of it as a donation to everyone.”
“Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts. Their massive overhead costs make micropayments impossible.”
“It’s very attractive to the libertarian viewpoint if we can explain it properly. I’m better with code than with words though.”
“I’ve developed a new open source P2P e-cash system called Bitcoin. It’s completely decentralized, with no central server or trusted parties, because everything is based on crypto proof instead of trust.”
“The result is a distributed system with no single point of failure. Users hold the crypto keys to their own money and transact directly with each other, with the help of the P2P network to check for double-spending.”
“Bitcoin would be convenient for people who don’t have a credit card or don’t want to use the cards they have.”
“Governments are good at cutting off the heads of a centrally controlled networks like Napster, but pure P2P networks like Gnutella and Tor seem to be holding their own.”
“The heat from your computer is not wasted if you need to heat your home.”
“I am not Dorian Nakamoto.”
“For greater privacy, it’s best to use bitcoin addresses only once.”
“A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.”
“Imagine if gold turned to lead when stolen.”
“With e-currency based on cryptographic proof, without the need to trust a third party middleman, money can be secure and transactions effortless.”
“I’ve been working on bitcoin’s design since 2007. At some point I became convinced there was a way to do this without any trust required at all and couldn’t resist to keep thinking about it.”
“It might make sense just to get some in case it catches on. If enough people think the same way, that becomes a self fulfilling prophecy.”
“When someone tries to buy all the world’s supply of a scarce asset, the more they buy the higher the price goes.”
“There is nobody to act as central bank or federal reserve to adjust the money supply as the population of users grows. That would have required a trusted party to determine the value, because I don’t know a way for software to know the real world value of things.”
“I don’t believe a second, compatible implementation of Bitcoin will ever be a good idea. So much of the design depends on all nodes getting exactly identical results in lockstep that a second implementation would be a menace to the network.”
“Bitcoins have no dividend or potential future dividend, therefore not like a stock. More like a collectible or commodity.”
“At first, most users would run network nodes, but as the network grows beyond a certain point, it would be left more and more to specialists with server farms of specialized hardware. A server farm would only need to have one node on the network and the rest of the LAN connects with that one node.”
“Writing a description for this thing for general audiences is bloody hard. There’s nothing to relate it to.”
“Bitcoin generation should end up where it’s cheapest. Maybe that will be in cold climates where there’s electric heat, where it would be essentially free.”
“If SHA-256 became completely broken, I think we could come to some agreement about what the honest block chain was before the trouble started, lock that in and continue from there with a new hash function.”
“Bitcoin isn’t currently practical for very small micropayments. Not for things like pay per search or per page view without an aggregating mechanism, not things needing to pay less than 0.01. The dust spam limit is a first try at intentionally trying to prevent overly small micropayments like that.”
“The Bitcoin network might actually reduce spam by diverting zombie farms to generating bitcoins instead.”
“Sigh... why delete a wallet instead of moving it aside and keeping the old copy just in case? You should never delete a wallet.”
“When there are multiple double-spent versions of the same transaction, one and only one will become valid.”
“I anticipate there will never be more than 100K nodes, probably less. It will reach an equilibrium where it’s not worth it for more nodes to join in. The rest will be lightweight clients, which could be millions.”
“Only people trying to create new coins would need to run network nodes.”
“SHA-256 is very strong. It’s not like the incremental step from MD5 to SHA1. It can last several decades unless there’s some massive breakthrough attack.”
“A block header with no transactions would be about 80 bytes. If we suppose blocks are generated every 10 minutes, 80 bytes * 6 * 24 * 365 = 4.2MB per year. With computer systems typically selling with 2GB of RAM as of 2008, and Moore’s Law predicting current growth of 1.2GB per year, storage should not be a problem even if the block headers must be kept in memory.”
“A lot of people automatically dismiss e-currency as a lost cause because of all the companies that failed since the 1990?s. I hope it’s obvious it was only the centrally controlled nature of those systems that doomed them. I think this is the first time we’re trying a decentralized, non-trust-based system.”
“Once the latest transaction in a coin is buried under enough blocks, the spent transactions before it can be discarded to save disk space. To facilitate this without breaking the block’s hash, transactions are hashed in a Merkle Tree, with only the root included in the block’s hash. Old blocks can then be compacted by stubbing off branches of the tree. The interior hashes do not need to be stored.”
“As you figured out, the root problem is we shouldn’t be counting or spending transactions until they have at least 1 confirmation. 0/unconfirmed transactions are very much second class citizens. At most, they are advice that something has been received, but counting them as balance or spending them is premature.”
“As an additional firewall, a new key pair should be used for each transaction to keep them from being linked to a common owner. Some linking is still unavoidable with multi-input transactions, which necessarily reveal that their inputs were owned by the same owner. The risk is that if the owner of a key is revealed, linking could reveal other transactions that belonged to the same owner.”
“In a few decades when the reward gets too small, the transaction fee will become the main compensation for nodes.”
“The average total coins generated across the network per day stays the same. Faster machines just get a larger share than slower machines. If everyone bought faster machines, they wouldn’t get more coins than before.”
“Once it gets bootstrapped, there are so many applications if you could effortlessly pay a few cents to a website as easily as dropping coins in a vending machine.”
“To compensate for increasing hardware speed and varying interest in running nodes over time, the proof-of-work difficulty is determined by a moving average targeting an average number of blocks per hour. If they’re generated too fast, the difficulty increases.”
“The steps to run the network are as follows: 1. New transactions are broadcast to all nodes. 2. Each node collects new transactions into a block. 3. Each node works on finding a difficult proof-of-work for its block. 4. When a node finds a proof-of-work, it broadcasts the block to all nodes. 5. Nodes accept the block only if all transactions in it are valid and not already spent. 6. Nodes express their acceptance of the block by working on creating the next block in the chain, using the hash of the accepted block as the previous hash.”
“The main properties: Double-spending is prevented with a peer-to-peer network. No mint or other trusted parties. Participants can be anonymous. New coins are made from Hashcash style proof-of-work. The proof-of-work for new coin generation also proof-of-workers the network to prevent double-spending.”
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