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Understanding Bitcoin: Cryptography, Engineering and Economics

Book Description

Discover Bitcoin, the cryptocurrency that has the finance world buzzing

Bitcoin is arguably one of the biggest developments in finance since the advent of fiat currency. With Understanding Bitcoin, expert author Pedro Franco provides finance professionals with a complete technical guide and resource to the cryptography, engineering and economic development of Bitcoin and other cryptocurrencies. This comprehensive, yet accessible work fully explores the supporting economic realities and technological advances of Bitcoin, and presents positive and negative arguments from various economic schools regarding its continued viability.

This authoritative text provides a step-by-step description of how Bitcoin works, starting with public key cryptography and moving on to explain transaction processing, the blockchain and mining technologies. This vital resource reviews Bitcoin from the broader perspective of digital currencies and explores historical attempts at cryptographic currencies. Bitcoin is, after all, not just a digital currency; it's a modern approach to the secure transfer of value using cryptography. This book is a detailed guide to what it is, how it works, and how it just may jumpstart a change in the way digital value changes hands.

  • Understand how Bitcoin works, and the technology behind it

  • Delve into the economics of Bitcoin, and its impact on the financial industry

  • Discover alt-coins and other available cryptocurrencies

  • Explore the ideas behind Bitcoin 2.0 technologies

  • Learn transaction protocols, micropayment channels, atomic cross-chain trading, and more

  • Bitcoin challenges the basic assumption under which the current financial system rests: that currencies are issued by central governments, and their supply is managed by central banks. To fully understand this revolutionary technology, Understanding Bitcoin is a uniquely complete, reader-friendly guide.

    Table of Contents

    1. Cover
    2. Title page
    3. Copyright
    4. Dedication
    5. About the Author
    6. Acknowledgments
    7. Foreword
    8. Prologue
    9. Preface
    10. Part One: Introduction and Economics
      1. Chapter 1: Foundations
        1. 1.1 Decentralized
        2. 1.2 Open Source
        3. 1.3 Public Asset Ledger
        4. 1.4 It’s not Only the Currency, It’s the Technology
      2. Chapter 2: Technology (Introduction)
        1. 2.1 Centralized Database
        2. 2.2 Addresses, Transactions
        3. 2.3 Distributed Database, the Blockchain
        4. 2.4 Wallets
        5. 2.5 The Different Meanings of Bitcoin
      3. Chapter 3: Economics
        1. 3.1 Medium of Exchange
        2. 3.2 Store of Value
        3. 3.3 Unit of Account
        4. 3.4 Deflation
        5. 3.5 Volatility
        6. 3.6 Effect on the Financial Industry and Monetary Policy
        7. 3.7 Regulation
      4. Chapter 4: Business Applications
        1. 4.1 Money Transfer
        2. 4.2 Exchanges
        3. 4.3 Payment Processors
        4. 4.4 Web Wallets
        5. 4.5 Multisignature Escrow Services
        6. 4.6 Mining
        7. 4.7 ATMS
    11. Part Two: Bitcoin Technology
      1. Chapter 5: Public Key Cryptography
        1. 5.1 Public Key Encryption
        2. 5.2 Digital Signatures
        3. 5.3 RSA
        4. 5.4 Elliptic Curve Cryptography
        5. 5.5 Other Cryptographic Primitives
        6. 5.6 Bitcoin Addresses
      2. Chapter 6: Transactions
        1. 6.1 Transaction Scripts
        2. 6.2 Pay-to-Address and Pay-to-Public-Key Transactions
        3. 6.3 Multisignature (m-of-n) transactions
        4. 6.4 Other Transaction Types
        5. 6.5 Transaction Signature
        6. 6.6 Pay-to-Script-Hash (P2SH)
        7. 6.7 Standard Transactions
      3. Chapter 7: The Blockchain
        1. 7.1 Hash Functions
        2. 7.2 Time-Stamp
        3. 7.3 Proof-of-Work
        4. 7.4 The Blockchain
        5. 7.5 Double-Spend and Other Attacks
        6. 7.6 Merkle Trees
        7. 7.7 Scalability
      4. Chapter 8: Wallets
        1. 8.1 Symmetric-Key Cryptography
        2. 8.2 Offline Wallets
        3. 8.3 Web Wallets
        4. 8.4 Brain Wallets
        5. 8.6 Multisignature Wallets
        6. 8.7 Vanity Addresses
        7. 8.8 Simplified Payment Verification (SPV)
        8. 8.9 The “Payment Protocol” (BIP 70)
      5. Chapter 9: Mining
        1. 9.1 Mining Technology
        2. 9.2 Pooled Mining
        3. 9.3 Transaction Fees
        4. 9.4 Selfish Mining
    12. Part Three: The Cryptocurrencies Landscape
      1. Chapter 10: The Origins Of Bitcoin
        1. 10.1 David Chaum’s Ecash
        2. 10.2 Adam Back’s Hashcash
        3. 10.3 Nick Szabo’s Bit Gold and Wei Dai’s B-Money
        4. 10.4 Sander and Ta-Shma’s Auditable, Anonymous Electronic Cash
        5. 10.5 Hal Finney’s RPOW
        6. 10.6 Satoshi Nakamoto
      2. Chapter 11: Alt(ernative) Coins
        1. 11.1 Litecoin
        2. 11.2 Peercoin
        3. 11.3 Namecoin
        4. 11.4 Auroracoin
        5. 11.5 Primecoin
        6. 11.6 Dogecoin
        7. 11.7 Freicoin
        8. 11.8 Other Alt-Coins
        9. 11.9 The Case For/Against Alt-Coins
      3. Chapter 12: Contracts (the Internet of Money or Cryptocurrencies 2.0)
        1. 12.1 Digital Assets
        2. 12.2 Smart Property
        3. 12.3 Micropayments
        4. 12.4 Autonomous Agents
        5. 12.5 Other Applications
        6. 12.6 Inserting Data into the Blockchain
        7. 12.7 Meta-Coins
      4. Chapter 13: The Privacy Battle
        1. 13.1 Network Analysis
        2. 13.2 Laundry Services
        3. 13.3 Greenlisting
        4. 13.4 Privacy-Enhancing Technologies
        5. 13.5 Fully Anonymous Decentralized Currencies
      5. Chapter 14: Odds and Ends
        1. 14.1 Other Transaction Protocols
        2. 14.2 Alternatives to Proof-of-Work
        3. 14.3 Merged Mining
        4. 14.4 Side-Chains
        5. 14.5 Open Transactions
        6. 14.6 Quantum Computing
        7. 14.7 Recent Advances in Cryptography
    13. Bibliography
    14. Index