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Suppose Alice wants to give another person, Bob, an infocoin.To do this, Alice writes down the message “I, Alice, am giving Bob one infocoin”.If Alice can use a string of bits as money, how can we prevent her from using the same bit string over and over, thus minting an infinite supply of money?

We’ll call that currency , to distinguish it from Bitcoin.In the world of atoms we achieve security with devices such as locks, safes, signatures, and bank vaults.In the world of bits we achieve this kind of security with cryptography.New financial instruments can, in turn, be used to create new markets and to enable new forms of collective human behaviour. I’ll describe Bitcoin scripting and concepts such as smart contracts in future posts.This post concentrates on explaining the nuts-and-bolts of the Bitcoin protocol.

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