The process of recording all in ledger becomes another key component of Bitcoin, called a block chain. It’s a big block chain. The block chain becomes a Bitcoin ledger where all Bitcoin transactions are recorded and recorded entirely securely.
The ideas behind this chain of blocks have been around long enough. Haber and Stornetta initiated this with a paper written in 1991. Their proposal, a method of securing timestamping in a digital document, still does not discuss the digital money scheme.
The purpose of this time marker is to provide an approximate picture of the time when a digital document appears. Most importantly, this timestamping can be accurate when delivering the order of document creation. If one document appears before another document, then timestamping will also reflect that in the time marker. There is a safety required for the timestamp not to be changed according to the fact when the digital document appears.
Haber and Stornetta in the scheme, provide this timestame service to client documents.When the server receives a document, it will mark it at the same time. And also as a link or pointer that shows to the previous document. Then, certify the document’s information.The meaning of “ponter” here is a special type of pointer that will automatically connect to the data snippet, but not to indicate the location. Meanwhile, If there is a question of changed data, then pointer becomes invalid. Use of this particular pointer can also be created using hash functions.
What we want to achieve here is that on every document certificate, we can be sure about the integrity of the contents of the previous document. Can also apply the argument recursively. Recursive is a function in programming language, with a function to call itself.
Each certificate, has an essence as an improvement over all certificates as well as document history. As each client tracks several of his own millik document certificates, and some others’ previous documents, collectively the user can ensure that the history of the document can not be changed. Because it has been descended in such a way based on a certain order in a document.
To create a certificate in a document, the timestamp server inserts a hash pointer on the previous document certificate, timer, and assigns the markers to all three elements simultaneously.
After that, there is a paper proposal again by adding improvement and efficiency. But not by connecting documents separately, but by collecting them into a block, and then connecting the blocks with the same block in a chain. On each block, the document will once again be linked together, in a non-linear tree structure. Its function is to reduce the number of checks required to verify a particular document in the system history. The visual form of the hybrid scheme will look like the picture below:
The arrows on the image represent the hash pointer, while the dashed vertical line indicates the time interval. This data structure further forms the chain block framework. Like a chain block in Bitcoin.
Bitcoin then provides an efficient and important improvement. The Hashcash-esque protocol, used to slightly delay how quickly a new blog will be added to the chain. This modification has major consequences and also provides security to Bitcoin. No more conquered a trusted server. Instead, all events will be logged by a collection of nodes, then called “miners” (miners). More effective by using miners to track each block, rather than hanging it on the user.
Everyone can become a miner by solving puzzles with computation to produce blocks.Bitcoin, also removes the signature on the protocol, and simply rely on the hash pointer to ensure the integrity of its data structure. Likewise with time markers that really are not too important in Bitcoin. The point of this system is to record the relative order of transactions by providing a tamper-resistant way. Because bitcoin blocks are not created in a fixed time schedule. Using this system will ensure that the new block created on average takes approximately 10 minutes. But there are variations of time, respectively from one block to another.
The outline here is that Bitcoin combines the idea of using these puzzle compositions as a way of forming new currency units, and with timestamping ideas to record the entire transaction and preventing multiple transactions.
In the past, some have incorporated these two ideas, firstly called b-money, made by Wei Dai in 1998. In b-money anyone can make money using such systems as hashcash. Have a peer-to-peer network just like Bitcoin. And also every node to maintain the ledger, it’s just that the ledger is not like the global ledger in the Bitcoin block chain.
Each node on the b-money system, has its own book. It is considered the balance of everyone. The same is also proposed by Nick Szabo, who was named Bitgold. He had an idea of Bitgold in 1998. But there was never any idea about it on the internet until 2005. There could be a conspiracy theory in it, as in the theory popularized by Nathaniel Popper.
This theory was later written by a reporter from the New York Times. Popper wrote his book pretty well, talking about Bitcoin’s history. Popper notes that the timestamps have changed since Satoshi posted his whitepaper. So the Bitgold proposal became like it was crushed and rewritten two months after Bitcoin was released.
According to Popper, like other observers, Szabo is probably Satoshi, then quotes the timestamp’s changes as evidence that either Szabo or Satoshi are trying to conceal the fact that he found Bitgold before he knew about the existence of Bitcoin. Szabo, had clearly had this idea in 1998, and he was not trying to change that date, a reasonable excuse was that he only found a post with the same idea after bitcoin was popularized. Perhaps that is to ensure that people will be aware of previous proposals.
Bitcoin has some important differences from b-money and Bitgold. In the proposal, computational puzzles are used directly for the formation of digital currencies. Anyone who can solve the puzzle and the solution is the unit of the digital currency itself. In Bitcoin, the puzzle solution itself represents money. They are used only to secure chain blocks, but indirectly cause printing of money for a limited time.
The second difference, b-money and Bitgold rely on timestamping services that by signing the creation or transfer of money. Bitcoin, as we see it, does not require timestamping, just trying to preserve the relative sequence of blocks as well as transactions.
Finally, on b-money and Bitgold, if there is any disagreement about the block chain between servers or nodes, there is no clear way to resolve it. Letting the majority decide, this is implied in the writings of both authors. But since anyone can set up nodes, and hide behind different identities, make this mechanism very insecure, unless the guard controls the network.
In Bitcoin, on the contrary, for attackers trying to change the history of blocks, they have to solve computational puzzles at a faster rate than all other combined miners. This is not only safer, but more likely to us in measuring the security of a system.
B-money and also Bitgold are unofficial proposals. The b-money proposal is posted in the mailinglist whereas Bitgold is a series of blog posts. Unlike Bitcoin which is published into a whitepaper . On b-money and Bitgold proposals not included complete specifications or any code, the proposal ignores any problems that may arise and how it can be solved. For example, how to call a difference of opinion about the ledger.
Another problem, is to determine how much computing the puzzle is arranged in order to produce a digital currency. Since the development of hardware dramatically over time, while the amount remains as computing power, Bitcoin incorporates a mechanism to automatically adjust the difficulty level on a regular basis. Meanwhile, on the proposal of b-money and Bitgold there is no such mechanism. It could trigger the problem of currency loss if it is easier to make a new currency again.