Bitcoin: Economics, Technology, and Governance

  • Böhme R
  • Christin N
  • Edelman B
 et al. 
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Abstract

Bitcoin is an online communication protocol that facilitates the use of a virtual currency, including electronic payments. Since its inception in 2009 by an anonymous group of developers (Nakamoto 2008), Bitcoin has served approximately 62.5 million transactions between 109 million accounts. As of March 2015, the daily transaction volume was approximately 200,000 bitcoins—roughly $50 million at market exchange rates—and the total market value of all bitcoins in circulation was $3.5 billion (Blockchain.info 2015). Table 1 summarizes Bitcoin activity to date. (We will follow the convention in the computer science literature of using capital-B Bitcoin to refer to the system, and lower-b bitcoin to refer to the unit of account.) Bitcoin's rules were designed by engineers with no apparent influence from lawyers or regulators. Rather than store transactions on any single server or set of servers, Bitcoin is built on a transaction log that is distributed across a network of participating computers. It includes mechanisms to reward honest participation, to bootstrap acceptance by early adopters, and to guard against concentrations of power. Bitcoin's design allows for irreversible transactions, a prescribed path of money creation over time, and a public transaction history. Anyone can create a

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Authors

  • Rainer Böhme

  • Nicolas Christin

  • Benjamin Edelman

  • Tyler Moore

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