Security is obviously the most significant challenge that the bitcoin community is facing.
How do we “punish” misbehaving nodes in an anonymous, permissionless open system?
The fourth challenge is performance, which is a major one.
Currently, existing blockchain technologies cannot match the performance or transactional volume of conventional payment methods.
Bitcoin has a long way to go in this regard.
We were first introduced to Bitcoin in October 2011.
At that time, both Elli and I were conducting our post-doctoral research at ETH Zurich.
We were reading several media articles mentioning Bitcoin, and were rather curious about the underlying system.
I wish we knew better back then!
That’s how we decided to publish Bitcoin and Blockchain Security.
Our contributions go beyond the mere analysis of reported vulnerabilities of Bitcoin.
Our focus was on documenting the security lessons we learned throughout 8 years of research.
Who will benefit most from reading Bitcoin and Blockchain Security?
Who do you want to read it?
(Laughing) We hope everyone will buy it!
Really, this book is mostly intended for computer scientist/engineers and security experts.
Open-sourcing the implementation was also an excellent call for developers to maintain and support the growth of the system.
The design of Bitcoin offered the world a promise for a low-cost decentralized and anonymous currency.
The core idea of Bitcoin is simple.
These transactions are validated collectively in a peer-to-peer online grid by all users.
More importantly, Bitcoin users could operate using pseudonymswithout ever revealing their true identity.
Bitcoins design relies on a clever and well-incentivized cooperation between users in the data pipe.
Namely, peers in the connection need to receive and validate all broadcasted transactionsregardless of their respective geographical location.
Peers confirm transactions in blocks, by solving a computational puzzle.
This clever design was enough to attract enough traction and participation in Bitcoin across the community.
A number of reports claim that this disappearance was an outcome of the increasing adoption of the system.
However, until the time of writing, there are no facts that substantiate these claims.
Financial market makers were skeptical about the sustainability of Bitcoin, given the absence of regulations and legislations.
There are also numerous businesses, exchange platforms, and banks that are currently built around the Bitcoin ecosystem.
These debates were mostly fueled by discussions on expanding Bitcoins block sizes.
We definitely do not wish to contribute to the speculations about the future of the currency.
Namely, no other digital currency proposalbesides Bitcoinhas witnessed such a massive adoption by users/vendors/businesses.
Bitcoin unveiled a key-enabling technology and a hidden potential within the system, the blockchain.
In the following section, we present a detailed outlook of the contents of this book.
We also define the notions of payment security and privacy as considered in existing payment systems.
We also describe the different roles that participants can assume in the Bitcoin ecosystem.
These results therefore motivate the need for a careful design of the scalability mechanisms adopted in Bitcoin.
In this respect, we describe a modification of the block request process in Bitcoin to deter this misbehavior.
1.1.4 Chapter 5In Chapter 5, we address user privacy in Bitcoin.
1.1.5 Chapter 6In Chapter 6, we analyze the security and privacy of lightweight Bitcoin clients.
Our findings therefore motivate a careful assessment of the current implementation of SPV clients prior to any large-scale deployment.
1.1.6 Chapter 7In Chapter 7, we analyze the current Bitcoin ecosystem.
We also analyze the limits of decentralization in the Bitcoin ecosystem.
1.1.7 Chapter 8In Chapter 8, we overview a number of interesting applications built atop Bitcoins blockchain.
We then overview Litecoin and Dogecoin, two of the most known altcoins derived from Bitcoin.
We also discuss other applications of the Bitcoin blockchain, such as decentralized and authenticated storage and smart contracts.
We additionally show how Bitcoin canbe used to instantiate a decentralized time-dependent randomness generator.
1.1.9 Chapter 10Finally, in Chapter 10, we summarize the main lessons learned from the previous chapters.
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