The People’s Money - Bitcoin

The People’s Money Bitcoin 2 CONTENTS Contents 2 Foreword 3 Introduction 5 Part 1: What is Bitcoin 7 Ch. 1 - Introducing Bitcoin 8 Ch. 2 - A History of Money 10 Ch. 3 - A Working Example 13 Ch. 4 - How Bitcoin are Generated 17 Ch. 5 - Why Use Bitcoin 20 Part 2: How Bitcoin Works 24 Ch. 6 - Asymmetric Keys 25 Ch. 7 - Hashing 29 Ch. 8 - Decentralisation 33 Ch. 9 - The Blockchain 34 Ch. 10 - Bitcoin Mining 37 Ch. 11 - The Miner’s Incentive 39 Ch. 12 - TL;DR 40 Part 3: A Broader Look 41 Ch. 13 - Mt. Gox 42 Ch. 14 - Silkroad 44 Ch. 15 - Other Digital Currencies 46 Ch. 16 - Securing your Bitcoin 47 Ch. 17 - Smart Contracts 49 Ch. 18 - Anonymity 51 Ch. 19 - Regulation 52 Ch. 20 - Timeline 54 Afterword 61 The People’s Money Bitcoin 3 FOREWORD By Adrian Przelozny Adam Tepper tragically passed away in a traffic accident in February 2015, before he had the chance to complete this book. As Adam’s close friend and business partner on countless projects, I was duty bound to finish what he had started by completing his manuscript and bringing this book to print. I would like to stress that although I have made some changes and edits to his book, I firmly believe that they are in line with what Adam would have done himself, had he gotten the chance. This book then remains the work of Adam Tepper and has stayed true to his original concept. A special thanks goes to all those who have donated funds to Adam’s family and also via the donation page set up by the Bitcoin Association of Australia to assist with the publishing costs of this book. Thank you also to the Bitcoin Embassy - Australia and others who have volunteered their time to proof read and provide feedback on the book at various stages. Adam was a warm-hearted, intelligent and passionate young man with a clear vision for a future where Bitcoin could change people’s lives for the better. Adam’s favourite author was Richard Feynman, for his ability to explain complex and seemingly inaccessible concepts in clear and simple terms. This is a talent which Adam also shared, and this book is a great example of this. I hope you enjoy the following pages whilst learning about Bitcoin through the words and thoughts of Adam Tepper. - Adrian Przelozny The People’s Money Bitcoin Adam Tepper 13-Feb-1981 - 26-Feb-2015 4 The People’s Money Bitcoin 5 INTRODUCTION By Adam Tepper As one of the founders of Independent Reserve, a currency exchange specialising in the exchange of Bitcoin into other currencies, I am frequently asked to explain what Bitcoin is, and why it matters. In the beginning, I probably wasn’t very good at explaining it to people as it brings together so many different concepts, all of which are often unfamiliar. Albert Einstein once said, ‘if you can’t explain it simply,