Why Bitcoin matters (to computer scientists)

Arvind Narayanan
03.27.2015 13:00 to 14:00

AVW 4172

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Behind the hype and tumult of the markets, researchers havebeen quietly producing a series of exciting results about Bitcoin andcryptocurrencies. In this paper we’ll explain why computer scientistsshould pay attention to these developments.First, every machine with a Bitcoin private key effectively serves asa bug bounty that can be redeemed irreversibly and anonymously. Thesestrong monetary incentives for attackers have exposed the inadequacyof current security practices and spurred new designs. These willlikely have lasting positive impacts on security overall. Second,predicting the behavior of cryptocurrency participants has exposedlimitations of game theory and mechanism design. However, as areal-world system that’s relatively "closed" and tractable, modelingBitcoin's stability is an ambitious yet feasible goal. Third, Bitcoinhas validated the concepts of secure global logs and globallydistributed consensus as primitives, with an array of applicationsranging from immediate, such as certificate transparency, tospeculative, such as decentralized prediction markets.