> Satoshi Nakamoto wrote: > > I've been working on a new electronic cash system that's fully > > peer-to-peer, with no trusted third party. > > > > The paper is available at: > > http://www.bitcoin.org/bitcoin.pdf > > We very, very much need such a system, but the way I understand your > proposal, it does not seem to scale to the required size. > > For transferable proof of work tokens to have value, they must have > monetary value. To have monetary value, they must be transferred within > a very large network - for example a file trading network akin to > bittorrent. > > To detect and reject a double spending event in a timely manner, one > must have most past transactions of the coins in the transaction, which, > naively implemented, requires each peer to have most past > transactions, or most past transactions that occurred recently. If > hundreds of millions of people are doing transactions, that is a lot of > bandwidth - each must know all, or a substantial part thereof. > Long before the network gets anywhere near as large as that, it would be safe for \ users to use Simplified Payment Verification (section 8) to check for double \ spending, which only requires having the chain of block headers, or about 12KB per \ day. Only people trying to create new coins would need to run network nodes. At \ first, most users would run network nodes, but as the network grows beyond a certain \ point, it would be left more and more to specialists with server farms of specialized \ hardware. A server farm would only need to have one node on the network and the rest \ of the LAN connects with that one node. The bandwidth might not be as prohibitive as you think. A typical transaction would \ be about 400 bytes (ECC is nicely compact). Each transaction has to be broadcast \ twice, so lets say 1KB per transaction. Visa processed 37 billion transactions in \ FY2008, or an average of 100 million transactions per day. That many transactions \ would take 100GB of bandwidth, or the size of 12 DVD or 2 HD quality movies, or about \ $18 worth of bandwidth at current prices. If the network were to get that big, it would take several years, and by then, \ sending 2 HD movies over the Internet would probably not seem like a big deal. Satoshi Nakamoto