Beruflich Dokumente
Kultur Dokumente
Assel Ramazanova
Department of Computer Science
School of Science and Technology
Nazarbayev University
Astana, Kazakhstan
E-mail: assel.ramazanova@nu.edu.kz
I.
INTRODUCTION
Since a few decades ago the humanity have witnessed
numerous technological advancements, in which the most
significant change came with the internet. Today, almost
everyone has his or her virtual world due to the social networks
or on-line game communities. Thus, there was necessity of
virtual money in order to buy and exchange virtual goods and
services as in real life.For this purpose, the first digital money
was created in 1996 called E-gold and has the same properties
as real money.[33] Although there are distinct between virtual
currency and cryptocurrency, both of them are types of digital
currency.These currencies can be categorized in different way
based on their implementation, the usage area or the interaction
BITCOIN OVERVIEW
A. A Brief History
Bitcoin was first created in the world on 31 October 2008
by Satoshi Nakamoto[1], who introduced the invention in his
article named as "Bitcoin: A Peer-to-Peer Electronic Cash
System.Satoshi Nakamoto is known as Bitcoin founder and he
created the first Original Bitcoin client. Nobody know what
exactly considered under Satoshi Nakamoto pseudonym. It
might be one person or group of people. The one thing we can
be convinced in is that he is a Japanese. It can be observed
from P2P profile where he said about it. He has been working
on his project for almost 3 years. In 2010 he disappeared and
stopped involving any improvements . The latest message from
him indicated that Satoshi Nakamoto is "gone for good[8].
His implementation was available in January 2009 as open
source code. Despite the fact that there were other
cryptocurrencies before Bitcoin has created,it is often known as
B. Transactions
Saying about any transactions and payments we always
imagine a real money and in Bitcoins operations think of some
coins. However, in reality there are not any physical coins that
we can touch. Saying coins, in fact we say about the chain of
the transactions. In order to have a clear picture of it, we
have to turn to the structure of Bitcoin transaction process. So,
as was mentioned above, each coin is considered as a digital
signature.
In figure 4, we can observed the linked list of coin owners,
where each participant transfer the coin to the next one by
digitally signing a hash of transaction that was done before it.
The public key of the second owner must be signed too and
they are added to the and of the electronic coin[17]. The main
issue users might faced with is a double-spending. This term
means that one owner tried or tend to use one Bitcoin more
than once.
Satoshi Nakamoto illustrated the solution in his
project, that can be observed in figure 4, providing open source
code for implementation and detailed description. At first
glance, it seemed to be that the only way to avoid this attack is
to have a trust third party that would verify each transaction
Fig.6. The process of how digital signature is applied and then verified.
The third one is the most popular, that is Bitcoin which has
attracted research community.
Fig. 7. A calculation of Bitcoin address [13]
BITCOIN PROSPECTS
In this part, I will observe the economical role
of
cryptocurrencies, particular of Bitcoin. I will also provide the
advantages and disadvantages of Bitcoin usage, giving
examples where they are relevant. In final section, I will share
with some future expectations for Bitcoin fate.
In Table 1, three the most popular kind of electronic
currencies are listed[14], where the earliest one is the currency
called as E-gold. The second is named as Perfect money and
we can categorize it as a currency with undirected flow. It
means this currency mostly used for online services and can be
exchanged only in one way(from real money to virtual money).
A. The Risks
Now, we have introduced with a technical background of
digital currency and can understand in what way they will
work properly. All inventions, along with their benefits have
some unsolved problems or risks[25]. Let us analyse these
features for Bitcoin.
1.The Disclosure of an anonymity. Although all transaction
processes held in open areas, there is a guarantee of anonymity
as the accounts are not attached to the personal data of users.
However, in the case of uploading the account number in social
networks, forums or somewhere else in the internet it is
possible to identify the account owner. Moreover, if there are
the increasing number of users that are known it is also
possible to remove the anonymity theoretically due to
statistical methods.[25]
2. Data loss. As traditional money, cryptocurrencies also
can be stolen or lost. As a rule all data are saved in computers
as well as files[16]. That is why there is the same risk for
cryptocurrencies as for other documents. Furthermore, they can
not be returned after that. This kind of criminal can be done
via viruses that distribute the wallet data to unauthorized
persons or even via computers with viruses which used for
mining.
B. Economical Role of the Bitcoin: Statistics
Since Bitcoin was invented, there were attractions not only
from computer scientists but also from economists. Because
bitcoin is one kind of money, it can be compete with other
world currencies[11][15]. Annually, the number of users is
increasing. For example, from the figure 8, we can see that the
use of Bitcoin has grown significantly in the period of 6 years
beginning from 2009 , reaching a peak in July, 2015 (at just a
over 192.000 transactions). It is also shown that until 2012m
there almost was not any operations. It means that Bitcoin was
contributed lots of efforts before gaining such popularity in the
CONCLUSION
In this survey, I have described Bitcoin technical
background covering all basic aspects relevant to mining,
transactions and cryptography methods. The main objective of
paper is to emphasise the necessity of exploring trust in Bitcoin
system. For this purpose I have studied the broad field of
Bitcoin, including its benefits and risks. It is a highly dynamic
area of research, and yet need a lot of work for future
development. To conclude, Bitcoin is a potential currency that
can replace real money.
REFERENCES
[1] S. Nakamoto, Bitcoin : A Peer-to-Peer Electronic Cash System, pp. 19,
November 2008.
[2]Kravitz, David W. "Digital signature algorithm." U.S. Patent No.
5,231,668. 27, pp-2-8 July. 1993.
[3] F. Tschorsch and B. Scheuermann, Bitcoin and Beyond : A Technical
Survey on Decentralized Digital Currencies,pp. 4-20, 2015.
[4]P. Baran, On Distributed Communications: Introduction to Distributed
Communications Networks, RAND memoranda RM-3420-PR, RAND
Distribution Services, Santa Monica, CA. p. 2, 1964.
[5]A. Badev and M. Chen, Bitcoin : Technical Background and Data
Analysis, pp. 138, 2014.
[6] D. Kraft, Difficulty Control for Blockchain-Based Consensus Systems
Bitcoin Mining and the Blockchain, pp. 119, 2015.