It is a decentralized digital currency without a central bank or single administrator that can be sent from user-to-user on the peer-to-peer bitcoin network without the need for intermediaries. Transactions are verified by network nodes through cryptography and recorded in a public distributed ledger called a blockchain. Bitcoin was invented by an unknown person or group of people using the name Satoshi Nakamoto and released as open-source software in 2009. Bitcoins are created as a reward for a process known as mining. They can be exchanged for other currencies, products, and services.
bitcoinsbitcoin walletBitcoin blockchain
The validity of each cryptocurrency's coins is provided by a blockchain. A blockchain is a continuously growing list of records, called blocks, which are linked and secured using cryptography. Each block typically contains a hash pointer as a link to a previous block, a timestamp and transaction data. By design, blockchains are inherently resistant to modification of the data. It is "an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way". For use as a distributed ledger, a blockchain is typically managed by a peer-to-peer network collectively adhering to a protocol for validating new blocks.
decentralizeddecentralisedAutonomy and decentralization
distributeddistributed systemsdistributed system
Examples of distributed systems vary from SOA-based systems to massively multiplayer online games to peer-to-peer applications. A computer program that runs within a distributed system is called a distributed program (and distributed programming is the process of writing such programs). There are many different types of implementations for the message passing mechanism, including pure HTTP, RPC-like connectors and message queues. Distributed computing also refers to the use of distributed systems to solve computational problems.
The spread of low-cost Internet access in developing countries has opened up new possibilities for peer-to-peer charities, which allow individuals to contribute small amounts to charitable projects for other individuals. Websites, such as DonorsChoose and GlobalGiving, allow small-scale donors to direct funds to individual projects of their choice. A popular twist on Internet-based philanthropy is the use of peer-to-peer lending for charitable purposes. Kiva pioneered this concept in 2005, offering the first web-based service to publish individual loan profiles for funding.
Barclays, UBS and Credit Suisse are experimenting with Ethereum blockchain to automate Markets in Financial Instruments Directive (MiFID) II requirements. Ethereum-based permissioned blockchain variants are used and being investigated for various projects. In Ethereum all smart contracts are stored publicly on every node of the blockchain, which has costs. Being a blockchain means it is secure by design and is an example of a distributed computing system with high Byzantine fault tolerance. The downside is that performance issues arise in that every node is calculating all the smart contracts in real time, resulting in lower speeds.
Dorian NakamotoSatoshiSatoshi Nakomoto
As part of the implementation, they also devised the first blockchain database. In the process, they were the first to solve the double-spending problem for digital currency using a peer-to-peer network. They were active in the development of bitcoin up until December 2010. On a P2P Foundation profile, Nakamoto claimed to be a man living in Japan, born on 5 April 1975. Speculation about the true identity of Nakamoto has mostly focused on a number of cryptography and computer science experts of non-Japanese descent, living in the United States and various European countries. Satoshi Nakamoto also created the bitcointalk forum, and posted the first message in 2009 under the pseudonym satoshi.
distributed ledger technologyDistributed Ledger Technology (DLT)
A peer-to-peer network is required as well as consensus algorithms to ensure replication across nodes is undertaken. One form of distributed ledger design is the blockchain system, which can be either public or private. The distributed ledger database is spread across several nodes (devices) on a peer-to-peer network, where each replicates and saves an identical copy of the ledger and updates itself independently. The primary advantage is the lack of central authority. When a ledger update happens, each node constructs the new transaction, and then the nodes vote by consensus algorithm on which copy is correct.
bitcoin miningminingBitcoin protocol
The bitcoin network is a peer-to-peer payment network that operates on a cryptographic protocol. Users send and receive bitcoins, the units of currency, by broadcasting digitally signed messages to the network using bitcoin cryptocurrency wallet software. Transactions are recorded into a distributed, replicated public database known as the blockchain, with consensus achieved by a proof-of-work system called mining. Satoshi Nakamoto, the designer of bitcoin claimed that design and coding of bitcoin began in 2007. The project was released in 2009 as open source software. The network requires minimal structure to share transactions. An ad hoc decentralized network of volunteers is sufficient.
hash treeMerkle hash treeTiger Tree Hash
They can help ensure that data blocks received from other peers in a peer-to-peer network are received undamaged and unaltered, and even to check that the other peers do not lie and send fake blocks. Hash trees are used in hash-based cryptography. Hash trees are also used in the IPFS, Btrfs and ZFS file systems (to counter data degradation ); Dat protocol; Apache Wave protocol ; Git and Mercurial distributed revision control systems; the Tahoe-LAFS backup system; Zeronet; the Bitcoin and Ethereum peer-to-peer networks ; the Certificate Transparency framework; and a number of NoSQL systems such as Apache Cassandra, Riak, and Dynamo.
Blockchain based networks are designed to support decentralization by way of a cryptographic distributed triple-entry accounting ledger, typically with “layers” where each layer is defined by an interoperable open protocol on top of which network participants can transact and build products or services without requiring permission from central authorities. Bitcoin is the original implementation of a blockchain where proof-of-work is used as a means of establishing decentralized consensus (aka. Nakamoto consensus), thus enabling the uniqueness of its intrinsic digital asset and utility as a scarce cryptocurrency.
In April 2014, Spotify moved away from the peer-to-peer (P2P) system they had used to distribute music to users. Previously, a desktop user would listen to music from one of three sources: a cached file on the computer, one of Spotify’s servers, or from other subscribers through the P2P system. P2P, a well-established Internet distribution system, served as an alternative that reduced Spotify's server resources and costs. However, Spotify ended the P2P setup in 2014, with Spotify's Alison Bonny telling TorrentFreak: "We’re gradually phasing out the use of our desktop P2P technology which has helped our users enjoy their music both speedily and seamlessly.
In his paper, he explained a decentralized network that was characterized by peer-to-peer transactions involving cryptocurrencies, or electronic money. In typical transactions carried out today, users put trust into central authorities to securely hold their data and execute transactions. In large corporations, a large amount of users' personal data is stored on a single device, posing an extreme security risk if an authority's system is hacked, lost, or mishandled. On the contrary, blockchain technology aims to get rid of this reliance on a central authority.
cooperative digital storage
STORJ is another example: based on the Bitcoin blockchain technology and a peer-to-peer architecture, it intends to provide cloud storage to people. It is currently developing two applications to achieve this goal: MetaDisk, which lets the user upload files to the network, and DriveShare, allowing users to rent out their storage space to MetaDisk users. A partly centralized system was operated by Symform, Inc., a startup company based in Seattle. Symform generated and kept the keys used to encrypt and decrypt, and since it also decided which server will host which parts of a file, users have to trust Symform not to share those with any other party or misuse the information.
On May 8, 2018, Marcus revealed that he is stepping down from his current role to lead the experimental blockchain group to explore the possibilities for the use of blockchain for Facebook.
In telecommunication, a communication protocol is a system of rules that allow two or more entities of a communications system to transmit information via any kind of variation of a physical quantity. The protocol defines the rules, syntax, semantics and synchronization of communication and possible error recovery methods. Protocols may be implemented by hardware, software, or a combination of both.
public keypublic key cryptographyprivate key
Public-key cryptography, or asymmetric cryptography, is a cryptographic system that uses pairs of keys: public keys which may be disseminated widely, and private keys which are known only to the owner. The generation of such keys depends on cryptographic algorithms based on mathematical problems to produce one-way functions. Effective security only requires keeping the private key private; the public key can be openly distributed without compromising security.
network effectsnetwork externalitiesnetwork externality
Peer-to-peer (P2P) systems are networks designed to distribute load among their user pool. This theoretically allows P2P networks to scale indefinitely. The P2P based telephony service Skype benefits from this effect and its growth is limited primarily by market saturation. Network effects are commonly mistaken for economies of scale, which result from business size rather than interoperability. To help clarify the distinction, people speak of demand side vs. supply side economies of scale. Classical economies of scale are on the production side, while network effects arise on the demand side. Network effects are also mistaken for economies of scope.
Hashes are used to identify files on peer-to-peer filesharing networks. For example, in an ed2k link, an MD4-variant hash is combined with the file size, providing sufficient information for locating file sources, downloading the file and verifying its contents. Magnet links are another example. Such file hashes are often the top hash of a hash list or a hash tree which allows for additional benefits. One of the main applications of a hash function is to allow the fast look-up of a data in a hash table. Being hash functions of a particular kind, cryptographic hash functions lend themselves well to this application too.
For some, cyberspace was seen virtual space that was to remain free of government intervention, as can be seen in many of today's libertarian blockchain and bitcoin discussions. Many government officials and experts think that the government should do more and that there is a crucial need for improved regulation, mainly due to the failure of the private sector to solve efficiently the cybersecurity problem. R. Clarke said during a panel discussion at the RSA Security Conference in San Francisco, he believes that the "industry only responds when you threaten regulation. If the industry doesn't respond (to the threat), you have to follow through."
A hash chain is similar to a blockchain, as they both utilize a cryptographic hash function for creating a link between two nodes. However, a blockchain (as used by Bitcoin and related systems) is generally intended to support distributed consensus around a public ledger (data), and incorporates a set of rules for encapsulation of data and associated data permissions. Challenge–response authentication. Hash list – In contrast to the recursive structure of hash chains, the elements of a hash list are independent of each other. One-time password. Key stretching. Linked timestamping – Binary hash chains are a key component in linked timestamping. X.509.
sharingsharing economiescollaborative consumption
Peer-to-peer banking. Peer-to-peer lending. Virtual currency. Cafeteria. Food bank. Social dining. Doerz. ToursByLocals. Visitours. Airbnb. Co-housing. Coliving. Collaborative workspace. Couchsurfing. Emergencybnb. Home exchange. Peer-to-peer property rental. HomeAway. Vacasa. Open Innovation. Open source product development. Coworking. Freelance marketplace. LETS. Time banks. Bartering. Book swapping. Borrowing center. Clothes swapping. Fractional ownership. Free store. Freecycling. Peer-to-peer renting. List of tool-lending libraries. Toy library. Bike sharing system. Carpool. Carsharing and peer-to-peer carsharing. Cycling. Flight sharing. Real-time ridesharing. Share taxi.
In a peer-to-peer or overlay network, nodes that actively route data for the other networked devices as well as themselves are called supernodes. Distributed systems may sometimes use virtual nodes so that the system is not oblivious to the heterogeneity of the nodes. This issue is addressed with special algorithms, like consistent hashing, as it is the case in Amazon's Dynamo. Within a vast computer network, the individual computers on the periphery of the network, those that do not also connect other networks, and those that often connect transiently to one or more clouds are called end nodes.