Cryptocurrencies
Description
ACM:
"Humans have attempted to create secret codes since the invention of writing but modern mathematical cryptography has developed over the past 50 years. Public key cryptography was introduced in 1976 (http://www-ee.stanford.edu/~hellman/publications/24.pdf) and the first cryptocurrencies were attempted in the early 1980’s (http://bitcoinmagazine.com/12241/quick-history-cryptocurrencies-bbtc-bitcoin/). Digital signatures are able to guarantee that a digital cash transfer was authorized by its owner but cannot prevent the owner from spending the cash twice.
Several solutions for the double-spending problem have been proposed but the 2008 posting of the “Bitcoin” paper (https://bitcoin.org/bitcoin.pdf) by pseudonomous author(s) Satoshi Nakamoto described the first system which has become widely used. The current value of all bitcoins now exceeds 5 billion dollars and 507 related cryptographic “altcoins” have been created using the same principles (http://coinmarketcap.com/). A flurry of bitcoin and altcoin based businesses now exist ranging from coin miners and exchanges to coffee houses and flower stores (http://www.coindesk.com/information/what-can-you-buy-with-bitcoins/).
The primary bitcoin innovation is the use of “bitcoin miners” to add transactions to the decentrallized “bitcoin blockchain”. They perform computationally expensive “proof of work” and are rewarded in bitcoins for their efforts. This enables a decentralized consensus about transactions that cannot be disrupted by attackers who expend fewer computational resources than the total of the other miners in the network. Bitcoin supports some forms of transaction that go beyond transferring money from one party to another. For example, it is possible to implement “multi-signature” transactions in which two out of three participants must validate a transfer (https://en.bitcoin.it/wiki/Contracts). But bitcoin’s facility for defining contracts is limited." (http://steveomohundro.com/2014/10/22/cryptocurrencies-smart-contracts-and-artificial-intelligence/)