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CS4146 Assignment 1

This document contains an assignment submission for a blockchain technology course. The assignment asks the student to summarize a whitepaper by Satoshi Nakamoto on Bitcoin. The summary provided by the student describes Nakamoto's proposal for a peer-to-peer electronic cash system without a third party. It explains that the system uses cryptographic proof and a timestamp server to prevent double spending and allow direct transactions between parties. The summary also outlines how the timestamp server implements a proof-of-work process and blockchain to record transaction histories in a verifiable, chronological chain.

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HAMZA MUZAFFAR
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79 views2 pages

CS4146 Assignment 1

This document contains an assignment submission for a blockchain technology course. The assignment asks the student to summarize a whitepaper by Satoshi Nakamoto on Bitcoin. The summary provided by the student describes Nakamoto's proposal for a peer-to-peer electronic cash system without a third party. It explains that the system uses cryptographic proof and a timestamp server to prevent double spending and allow direct transactions between parties. The summary also outlines how the timestamp server implements a proof-of-work process and blockchain to record transaction histories in a verifiable, chronological chain.

Uploaded by

HAMZA MUZAFFAR
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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CS4146 – Blockchain Technology and Applications

Assignment 1 – Spring 2021


Student ID: 17011065006

Name: Hamza Muzaffar

Batch: 11

Program: BSSE

Attempt each question. Marks are specified with each question. 10 – Marks
Q 1. Write a summary of following whitepaper by Satoshi Nakamoto “Bitcoin: A Peer-to-Peer Electronic
Cash System”. The summary should not be plagiarized. The paper is uploaded on LMS (folder) as a
separate file.
SUMMARY
It was a world which was completely relying on banks for processing of e-payments. It was working very
well but couldn’t adhere properly the trust based model. For that, they have to act as a third party
between people to solve their disputes in transaction. This would increase transaction costs and
promote in the loss of non-reversible payments. Possibility of reversal, the need for trust spreads. There
exists payment uncertainties can be avoided by using physical currency but no mechanism existed for
payments over a communications channel without a third party. Satoshi Nakamoto introduced a
payment system based on cryptographic proof, which allowed people to transact directly with each
other without third party involvement. It promotes fraud prevention to the sellers by not allowing the
reversal of transactions and protection of buyers by holding the transaction until both parties meet the
valid conditions. Along with that, this paper proposes a solution for double spending that is a risk in
which a coin holder could make a transaction twice with same amount of coins; by using peer-to-peer
timestamp server which would generate computational proof of the transaction history in a chronicle
order. A transaction is a chain of digital signature and is verified publicly by nodes who agree that the
coin spent was the first received. A timestamp server works by taking hash of a block of items to be
timestamped and it is published publicly. It uses previous block hash in the timestamp, forming a chain
and proves that the data existed at the time, in order to get into the hash. To implement this server on
P2P basis, a proof-of-work is needed. It involves scanning for a value when hashed with SHA-256. In this
paper, the value of is found by incrementing the nonce in the block, giving it required zero bits. After
CS4146 – Blockchain Technology and Applications

Assignment 1 – Spring 2021


computation to satisfy the proof-of-work is achieved, the block cannot be changed without redoing the
computation. It becomes difficult to redo it with every block coming into the chain. It works as a one-
CPU-one-vote and the decision to accept the work lies in the chain which is longest and has the greatest
proof-of-work effort invested in it. All this happens in a network in which new transactions are
broadcasted to nodes, those nodes collect new transactions into a block, then works on finding proof-
of-work, after success the node broadcasts the block to all other nodes, who then accept only if the
transactions in the block are valid and not double spent. When hash of the accepted block is used as a
previous hash, it means the block has been accepted.

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