Bitcoin Whitepaper — HTML Guide

A structured, educational HTML guide to the ideas in Satoshi Nakamoto’s paper. For the authoritative text, see the original PDF.

1. Introduction

The core idea is a peer‑to‑peer electronic cash system that removes the need for trusted third parties to process online payments.

2. Transactions

Ownership is transferred by chaining digital signatures: the current owner signs a hash of the previous transaction and the next owner’s public key.

3. Timestamp Server

A timestamp server batches data into a block and announces the hash, proving the data existed at that moment and establishing order.

4. Proof‑of‑Work

Nodes (miners) find a nonce so the block hash meets a difficulty target. This makes altering history computationally impractical.

Figure 1: Chain of blocks secured by proof‑of‑work
Simplified chain of blocks Block n Block n+1 Block n+2 Block n+3 Block n+4

5. Network

  • Broadcast new transactions.
  • Miners collect valid transactions into a block.
  • Nodes accept the longest (most work) valid chain.

6. Incentive

Block subsidy and fees reward miners, aligning incentives to secure the network.

7. Reclaiming Disk Space

After outputs are spent, nodes can prune transactions and keep block headers to save space.

8. Simplified Payment Verification (SPV)

Light clients verify payments by checking inclusion in a block via Merkle proofs and tracking the header chain.

Figure 2: SPV client verifies with headers + Merkle proof
SPV overview Headers Chain Merkle Root Transaction + Proof SPV Client

9. Combining & Splitting Value

Transactions can have multiple inputs and outputs so values can be combined and split flexibly.

10. Privacy

Bitcoin is pseudonymous. Using a new address per payment improves privacy.

11. Calculations

Rough probability estimates show how quickly the honest chain outpaces an attacker as confirmations increase.

12. Conclusion

Bitcoin presents a way to transact online without relying on trust in centralized intermediaries.

References

  1. W. Dai, “b-money” (1998).
  2. A. Back, “Hashcash” (2002).
  3. Haber & Stornetta, “How to Time-Stamp a Digital Document” (1991).
  4. F. T. Wright, “The Economics of Bitcoin Mining” — related discussions.
  5. Additional works cited in the original PDF.

This guide paraphrases key ideas for accessibility and study. For precise wording, consult the original whitepaper.