A WEB 3.0 BLOG

If you compare two pieces of American money dating to the 19th century, you could find a dollar coin made of silver and a paper dollar that in those days could also be exchanged for the same silver coin. More than a 100 years ago paper dollar bills were backed by silver, a precious metal that theoretically should always have value. However, today that has changed, a modern dollar bill is backed by nothing but the word of the U.S. government. Therefore the government can do whatever they wish, they can print more paper money, devalue the dollar any time they want, in fact, and although unlikely, the dollar could even disappear completely (Metz, 2013). There are subtle differences between a virtual currency, a digital currency and a cryptocurrency, although the terms are often used interchangeably. Virtual Currency – in 2012 the European Central Bank defined a virtual currency as "a type of unregulated, digital money, which is issued and usually controlled by its

A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution. Digital signatures provide part of the solution, but the main benefits are lost if a trusted third party is still required to prevent double-spending. We propose a solution to the double-spending problem using a peer-to-peer network. The network timestamps transactions by hashing them into an ongoing chain of hash-based proof-of-work, forming a record that cannot be changed without redoing the proof-of-work. The longest chain not only serves as proof of the sequence of events witnessed, but proof that it came from the largest pool of CPU power. As long as a majority of CPU power is controlled by nodes that are not cooperating to attack the network, they'll generate the longest chain and outpace attackers. The network itself requires minimal structure. Messages are broadcast on a best effort basis, and nodes ca