Some guy who used the Pseudonym (definitely not a Hawaiian word) Satoshi Nakamoto created the first crypto currency aka. BITCOIN around 2009. Nobody really knows who the person is so we just have a Pseudonym. I would call it a fake name :)
New to the crypto coin world? Tried reading that Satoshi Nakamoto paper on the bitcoin protocol and just can’t figure out what the heck they’re talking about? Well we’re glad you came here looking for answers. Here in Hawaii we like to kick off our shoes, put on our flip flops, and keep things simple. Hence we have attempted to “De-Mystify” the paper for you by translating it into simple terms us regular folk can understand.
Paper Says: We define an electronic coin as a chain of digital signatures. Each owner transfers the coin to the next by digitally signing a hash of the previous transaction and the public key of the next owner and adding these to the end of the coin. A payee can verify the signatures to verify the chain of ownership. Translated: Remember that ice-breaker game in school, where you had to repeat a whispered word to the next person in line? Yah, just like that! The word CHICKEN somehow magically turned into the word SALIVA at the end of the chain and no one could figure out what the original word was. Same idea.
Paper Says: Transactions that are computationally impractical to reverse would protect sellers from fraud, and routine escrow mechanisms could easily be implemented to protect buyers…. The system is secure as long as honest nodes collectively control more CPU power than any cooperating group of attacker nodes. Translated: The ancient Hawaiian law of “Kapu” will protect law-obeying citizens. Those that try to double-spend their crypto bucks will be severely punished with 50 lashings of a wet coconut leaf. Just trust us on this one okay.
Paper Says: The solution we propose begins with a timestamp server. Translated: NO MORE HAWAIIAN TIME…SORRY LOCAL PEOPLE! (Hawaii Time means we’re always late – typically an hour on average)
Paper Says: To implement a distributed timestamp server on a peer-to-peer basis, we will need to use a proof- of-work system similar to Adam Back’s Hashcash , rather than newspaper or Usenet posts. Translated: Eh, you wanna play hard, you gotta work hard…up to you. If can, can – if no can, no can!
Paper Says: The steps to run the network are as follows: 1) New transactions are broadcast to all nodes. 2) Each node collects new transactions into a block. 3) Each node works on finding a difficult proof-of-work for its block. 4) When a node finds a proof-of-work, it broadcasts the block to all nodes. 5) Nodes accept the block only if all transactions in it are valid and not already spent. 6) Nodes express their acceptance of the block by working on creating the next block in the chain, using the hash of the accepted block as the previous hash. Translated: A network of magical coconut shells connected to twine will guarantee the accurancy and integrity of the coin’s network. Again, just trust us.
Paper Says: By convention, the first transaction in a block is a special transaction that starts a new coin owned by the creator of the block. This adds an incentive for nodes to support the network, and provides a way to initially distribute coins into circulation, since there is no central authority to issue them. The steady addition of a constant of amount of new coins is analogous to gold miners expending resources to add gold to circulation. In our case, it is CPU time and electricity that is expended. Translated: Do the work and you’ll get a coupon you can spend someday at your favorite lunch wagon.
Paper Says: The traditional banking model achieves a level of privacy by limiting access to information to the parties involved and the trusted third party. The necessity to announce all transactions publicly precludes this method, but privacy can still be maintained by breaking the flow of information in another place… Translated: Just like in our Hawaiian islands, anything you do (or in this case send/receive) will be talked about for days at public places and in homes throughout the islands. The good news, though, is that in the case of crypto bucks you can perform these actions anonymously!
Paper Says: Computations – (a whole bunch of formulas) Translated: Blah blah blah. I’m bored, let’s go to the beach and spend our HIC on a few snow cones!