After four years of quiet growth and development, the Bitcoin cryptocurrency leaped into prominence during 2013. Much of the current discourse around Bitcoin focuses on its viability as currency and its valuation. However, to appreciate its potential as the “Internet of ownership transfer”, a deeper understanding of its technical underpinnings is needed.
In this colloquium, Prof G-J van Rooyen gives a technological primer on the nuts and bolts of the cryptocurrency. The talk will demonstrate how the cunning use of hashes makes it possible to transfer ownership in such a way that cheating (double-spending) is impossible in a correctly functioning network. This is shown to be the most successful solution to the long-standing Byzantine Generals Problem, and a breakthrough in distributed information management.
The talk will also show how the Bitcoin peer-to-peer network forms the first widespread use of triple-entry accounting, and consider the applications of such technology. We will briefly dip into the scripting language built into the protocol: “DUP HASH160 EQUALVERIFY CHECKSIG” turns the Bitcoin protocol into Bitcoin the currency. More advanced scripts can make arbitrarily complex contracts and interactions possible.