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Bitcoin v0.1 released - P2P e-cash

Announcing the release of Bitcoin, a new electronic cash system that uses a peer-to-peer network to prevent double-spending. It's completely decentralized with no server or central authority.

Screenshots and more details about the design are at:
http://www.bitcoin.org

Download:
http://sourceforge.net/project/platformdownload.php?group_id=244765

Windows only for now. Open source C++ code is included.

- Unpack the files into a directory
- Run BITCOIN.EXE
- It automatically connects to other nodes

If you can keep a node running that accepts incoming connections, you'll really be helping the network a lot. Port 8333 on your firewall needs to be open to receive incoming connections.

The software is still alpha and experimental. There's no guarantee the system's state won't have to be restarted at some point if it becomes necessary, although I've done everything I can to build in extensibility and versioning.

You can get coins by getting someone to send you some, or turn on Options->Generate Coins to run a node and generate blocks. I made the proof-of-work difficulty ridiculously easy to start with, so for a little while in the beginning a typical PC will be able to generate coins in just a few hours. It'll get a lot harder when competition makes the automatic adjustment drive up the difficulty. Generated coins must wait 120 blocks to mature before they can be spent.

There are two ways to send money. If the recipient is online, you can enter their IP address and it will connect, get a new public key and send the transaction with comments. If the recipient is not online, it is possible to send to their Bitcoin address, which is a hash of their public key that they give you. They'll receive the transaction the next time they connect and get the block it's in. This method has the disadvantage that no comment information is sent, and a bit of privacy may be lost if the address is used multiple times, but it is a useful alternative if both users can't be online at the same time or the recipient can't receive incoming connections.

Total circulation will be 21,000,000 coins. It'll be distributed to network nodes when they make blocks, with the amount cut in half every 4 years.

first 4 years: 10,500,000 coins
next 4 years: 5,250,000 coins
next 4 years: 2,625,000 coins
next 4 years: 1,312,500 coins
etc...

When that runs out, the system can support transaction fees if needed. It's based on open market competition, and there will probably always be nodes willing to process transactions for free.

Posted by Satoshi Nakamoto 2009-01-13