Spam and the Byzantine Empire: How Bitcoin tech REALLY works
Why does Bitcoin work? Fraudsters should have left it in cinders years ago, and might have done, if it wasn’t for two things: spam and the Byzantine Empire.
A Bitcoin is basically an entry in a ledger that is distributed across a network of computers. Bitcoins are transferred between parties by noting the transaction in the ledger. This might sound just like any other banking system except there’s a crucial difference: no one is in charge of the ledger.
It’s held across a network of computers and anyone can add their computer to the network when they wish - or leave when they wish. This may seem crazy, and an easy way for fraudsters to join the network and get their computer to update the ledger to give themselves new Bitcoins. In 1997, a British cryptographer called Adam Back proposed an anti-spam approach called Hashcash. The basic idea was to make an email message contain proof that a computationally difficult problem, specific to the contents of the message, had been solved. Any email that didn’t contain this proof would be discarded by the recipient’s email server.
