Bitcoin and Analysis of its Cryptographic Primitives

Bitcoin has recently gained popularity as a peer-to-peer decentralized electronic currency system. It was designed to provide all the desirable properties of electronic cash. One of the desirable properties of Bitcoin is that it does not depend on a central authority like a bank or the government. This paper introduces Bitcoin and its characteristics together with its core components–block, block chain and transaction. Mechanisms for ensuring privacy and security in Bitcoin are also presented. Primitives like hash functions and digital signatures play important roles in providing cryptographic functionalities for Bitcoin. SHA-256 is used to prevent malicious parties from stealing and creating coins. Specific characteristics of this hash function and its suitability for bitcoin would be analyzed. The elliptic Curve digital signature Algorithm (ECDSA) is used for confirming identity of payer and validating truncation. Properties of the Elliptic curve used in ECDSA and the signature algorithm would also be technically analyzed together with their role in protecting the electronic currency for the next few decades.