bitCoin[part 1]

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“The developers of BitCoin are trying to show that money can be successfully privatized.”
-Edward Hadas
“In the United States the question “Is money a form of speech?” is an important legal question, because of the protection afforded speech under the US Constitution. In my (legally uninformed) opinion digital money may make this issue more complicated. As we’ll see, the BitCoin protocol is really a way of standing up before the rest of the world (or at least the rest of the BitCoin network) and avowing “I’m going to give such-and-such a number of BitCoins to so-and-so a person” in a way that’s extremely difficult to repudiate. At least naively, it looks more like speech than exchanging copper coins, say.”
-Michael Nielsen

the nitty-gritty

Understanding the BitCoin protocol in a detailed way is hard work. It is tempting instead to take BitCoin as given, and to engage in speculation about how to get rich with BitCoin, whether BitCoin is a bubble, whether BitCoin might one day mean the end of taxation, and so on. That’s fun, but severely limits your understanding.
Understanding the details of the protocol opens up otherwise inaccessible vistas. In particular, it’s the basis for understanding BitCoin’s built-in scripting language, which makes it possible to use BitCoin to create new types of financial instruments. New financial instruments can, in turn, be used to create new markets and to enable new forms of collective human behavior.

basic knowledge required

The heart of BitCoin is cryptographic protocol. This involves public key cryptography, and with the closely related idea of digital signatures and cryptographic hashing.


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