Abstract
Bitcoin, a trailblazing cryptocurrency and the first practical deployment of a blockchain, was established over a decade ago. Since then it has become the most capitalised cryptocurrency out of approximately two thousand in existence. This chapter examines Bitcoin’s success and explains why it is one of the most trusted cryptocurrencies in the world today.
Bitcoin is open-source; its design is public, nobody owns or controls Bitcoin and everyone can take part [28].
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- 1.
Trust is defined here as: ‘Freedom from suspicion or doubt’.
- 2.
In blockchain jargon, the ‘super-user’ or ‘super-participant’ described in this example is generally called a ‘third party’.
- 3.
We are not considering criminal activities where cash could be returned in illegal ways.
- 4.
Ultimately, the banks reconciliate their accounts with the central bank, which in the case of the UK is the Bank of England.
- 5.
The public keys are shortened in such a way that it is highly improbable that two different keys, belonging to two different users, will yield the same address (see section ‘How Does the PoW Work?’), about cryptographic digest.
- 6.
See, for example, https://en.bitcoin.it/wiki/Controlled_supply (accessed September 10, 2018).
- 7.
June 30, 2019.
- 8.
It is accepted in the academic community that the only way to solve the PoW is via trial and error; however, this has not been mathematically proven yet.
- 9.
A web-display of the Bitcoin ledger can be found at https://www.blockchain.com/en/explorer, https://blockchair.com/bitcoin or the reader can download the Bitcoin Core https://bitcoin.org/en/download and have a copy of the ledger on a laptop or a desktop. Either of them can help to determine how many blocks have been mined.
- 10.
Sometimes it is also called indexdigital fingerprint digital fingerprint or cryptographic digest [78].
- 11.
How this is achieved is beyond the scope of this book. Explaining it in full requires a level of detail more suitable to a university computing graduate.
- 12.
There isn’t a single organisation that manages the IT infrastructure, and all nodes in the network have the same rights and privileges.
- 13.
See for example https://en.bitcoin.it/wiki/Bitcoin_Improvement_Proposals (accessed February 13, 2019).
- 14.
Three bitcoin addresses are known to have requested the ransom: 12t9YDPgwueZ9NyMgw519 p7AA8isjr6SMw, 13AM4VW2dhxYgXeQepoHkHSQuy6NgaEb94 and 115p7UMMngoj1pMvkp HijcRdfJNXj6LrLn.
- 15.
Consult https://coinatmradar.com to find out if there are ATM close to you (accessed September 11, 2018).
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Vigliotti, M.G., Jones, H. (2020). Bitcoin and Blockchain: The Fundamentals. In: The Executive Guide to Blockchain. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-21107-3_4
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DOI: https://doi.org/10.1007/978-3-030-21107-3_4
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