Bitcoin: A Peer-to-Peer Electronic Cash System
When trying to understand what Bitcoin is and does, it's helpful to start with an understanding of the context in which it was build and the problem it was trying to solve. There were many digital currencies before Bitcoin, but Bitcoin was the first decentralized digital currency. Creating a digital currency without a central authority was the problem that was being solved for.
Bitcoin was first introduced to the world On October 31, 2008, with the publishing of the Bitcoin white paper Bitcoin: A Peer-to-Peer Electronic Cash System. The paper gives insight into the motivations and architecture of the system. Much of what is covered in the paper are topics that we will dive into in later units. So, we recommend reading through it briefly now and coming back to it often throughout your studies.
3. Timestamp Server
The solution we propose begins with a timestamp server. A timestamp server works by taking a hash of a block of items to be timestamped and widely publishing the hash, such as in a newspaper or Usenet post. The timestamp proves that the data must have existed at the time, obviously, in order to get into the hash. Each timestamp includes the previous timestamp in its hash, forming a chain, with each additional timestamp reinforcing the ones before it.