Satoshi Nakamoto cites 8 references in the Bitcoin white paper. Each one uniquely influencing the design of the Bitcoin protocol.
In this thread we’ll explore what they are and why they’re important.
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0/ First, for context, it’s helpful to understand that the Bitcoin protocol combines several existing tools, technologies and systems in a highly novel way.
1/ ‘b-money’ by Wei Dai is the very first reference listed. Dai was also one of the first people contacted by Nakamoto.
“efficient cooperation requires a medium of exchange (money) and a way to enforce contracts.
I describe a protocol by which these services can be provided.”
It should be noted that Dai has questioned the influence of his paper on Bitcoin’s design:
“My understanding is..Nakamoto didn't even read my article before reinventing the idea himself. He learned about it afterward and credited me in his paper.”
An excerpt from ‘b-money’:
2/ “we need a system for participants to agree on a single history..”
-Nakamoto
“There are two families of timestamping techniques: those that work with a trusted third party and those that are based on the concept of distributed trust.”
-Massias et al.
bit.ly/3bZpklp
Each block in Bitcoin’s chain includes an approximate timestamp (which is then included in the block header) making it a de facto global public store of record.
“such as in a newspaper… timestamp proves that the data must have existed at the time” -Nakamoto
3/ Haber & Stornetta feature three times in the white paper’s reference list.
“The problem is to time-stamp the data, not the medium.
We propose..time-stamping of such documents so that it is infeasible for a user either to back-date or to forward-date his document..”
Satoshi incorporated the concept of 𝘭𝘪𝘯𝘬𝘪𝘯𝘨 hashed data to easily prove integrity and transaction sequencing.
“The sequentially numbered, sewn-in pages a the notebook make it difficult to tamper with the record without leaving telltale signs”
-Haber & Stornetta
4/ Key to Bitcoin’s decentralization are Merkle Trees for data storage efficiency.
“By using trees, we show how to achieve an exponential increase in the publicity obtained for each time-stamping event, while reducing the storage and the computation required..”
-Bayer et al.
Invented by Ralph Merkle, Nakamoto utilized data structures known as Merkle Trees as a way to-
a) save on disk space
b) prove tx validity (via proofs)
Each block contains only the merkle root, but “it is possible to verify payments without running a full network node”
-Nakamoto
5/ Concerned with naming schemes of digital documents, for ease of discoverability and verifiability, Haber & Stornetta proposed combining one-way hash functions with Merkle Trees to verify integrity and check for completeness in the case of lists.
nakamotoinstitute.org/static/docs/se…
6/ In implementing a mechanism for distributed timestamping, Nakamoto posits- “we will need to use a proof-of-work system similar to Adam Back's Hashcash”
“Hashcash was originally proposed as a mechanism to throttle systematic abuse of un-metered internet resources..”
-@adam3us
For more detail on the influence of Adam Back’s work in the design of Bitcoin’s incentive system, the following interview with @PrestonPysh covers lots of ground.
theinvestorspodcast.com/bitcoin-fundam…
7/ Merkle’s paper explores the various schemes for public key distribution and protocols for digital signatures.
“Digital signatures are also an ideal method of broadcasting authenticated messages from a central source which must be confirmed by many separate recipients”
-Merkle
The Bitcoin protocol utilizes digital signatures (ECDSA) to enable you to prove ownership and send bitcoin from your address, without having to publicly reveal your private key.
Others can then verify this by combining your signed transaction + your public key.
8/ Lastly, a 1957 mathematics textbook by William Feller was cited by Satoshi in relation to calculating the probability of an attacker generating “an alternate chain faster than the honest chain” in order to double-spend their bitcoins.
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It's the non-technical visual primer I wish existed when I first began learning about Bitcoin- covering money, networks & innovation.
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