Yes, but we can win a major battle in the arms race and gain a new territory of freedom for several years.

Actually, it works well to just PM me. I'm the one who's going to be fixing it. If you find a security flaw, I would definitely like to hear from you privately to fix it before it goes public.

Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments. While the system works well enough for most transactions, it still suffers from the inherent weaknesses of the trust based model.

The fact that new coins are produced means the money supply increases by a planned amount, but this does not necessarily result in inflation. If the supply of money increases at the same rate that the number of people using it increases, prices remain stable. If it does not increase as fast as demand, there will be deflation and early holders of money will see its value increase. Coins have to get initially distributed somehow, and a constant rate seems like the best formula.

There is no way for the software to automatically know if one chain is better than another except by the greatest proof-of-work. In the design it was necessary for it to switch to a longer chain no matter how far back it has to go.

A transaction will quickly propagate throughout the network, so if two versions of the same transaction were reported at close to the same time, the one with the head start would have a big advantage in reaching many more nodes first. Nodes will only accept the first one they see, refusing the second one to arrive, so the earlier transaction would have many more nodes working on incorporating it into the next proof-of-work. In effect, each node votes for its viewpoint of which transaction it saw first by including it in its proof-of-work effort. If the transactions did come at exactly the same time and there was an even split, it's a toss up based on which gets into a proof-of-work first, and that decides which is valid.

Eventually at most only 21 million coins for 6.8 billion people in the world if it really gets huge. But don't worry, there are another 6 decimal places that aren't shown, for a total of 8 decimal places internally. It shows 1.00 but internally it's 1.00000000. If there's massive deflation in the future, the software could show more decimal places.

When there are multiple double-spent versions of the same transaction, one and only one will become valid.

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.

By making some adjustments to the database settings, I was able to make the initial block download about 5 times faster. It downloads in about 30 minutes. The database default had it writing each block to disk synchronously, which is not necessary. I changed the settings to let it cache the changes in memory and write them out in a batch. Blocks are still written transactionally, so either the complete change occurs or none of it does, in either case the data is left in a valid state. I only enabled this change during the initial block download. When you come within 2000 blocks of the latest block, these changes turn off and it slows down to the old way.

It is strictly necessary that the longest chain is always considered the valid one. Nodes that were present may remember that one branch was there first and got replaced by another, but there would be no way for them to convince those who were not present of this. We can't have subfactions of nodes that cling to one branch that they think was first, others that saw another branch first, and others that joined later and never saw what happened. The CPU power proof-of-work vote must have the final say. The only way for everyone to stay on the same page is to believe that the longest chain is always the valid one, no matter what.

A lot of people automatically dismiss e-currency as a lost cause because of all the companies that failed since the 1990's. I hope it's obvious it was only the centrally controlled nature of those systems that doomed them. I think this is the first time we're trying a decentralized, non-trust-based system.

The proof-of-work chain is itself self-evident proof that it came from the globally shared view. Only the majority of the network together has enough CPU power to generate such a difficult chain of proof-of-work. Any user, upon receiving the proof-of-work chain, can see what the majority of the network has approved. Once a transaction is hashed into a link that's a few links back in the chain, it is firmly etched into the global history.

Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts. Their massive overhead costs make micropayments impossible.

Instantant non-repudiability is not a feature, but it's still much faster than existing systems. Paper cheques can bounce up to a week or two later. Credit card transactions can be contested up to 60 to 180 days later. Bitcoin transactions can be sufficiently irreversible in an hour or two.

A digital coin contains the public key of its owner. To transfer it, the owner signs the coin together with the public key of the next owner. Anyone can check the signatures to verify the chain of ownership.

For our timestamp network, we implement the proof-of-work by incrementing a nonce in the block until a value is found that gives the block's hash the required zero bits. Once the CPU effort has been expended to make it satisfy the proof-of-work, the block cannot be changed without redoing the work. As later blocks are chained after it, the work to change the block would include redoing all the blocks after it.

Nodes always consider the longest chain to be the correct one and will keep working on extending it. If two nodes broadcast different versions of the next block simultaneously, some nodes may receive one or the other first. In that case, they work on the first one they received, but save the other branch in case it becomes longer. The tie will be broken when the next proof-of-work is found and one branch becomes longer; the nodes that were working on the other branch will then switch to the longer one.

I'm happy if someone with artistic skill wants to contribute alternatives. The icon/logo was meant to be good as an icon at the 16x16 and 20x20 pixel sizes. I think it's the best program icon, but there's room for improvement at larger sizes for a graphic for use on websites. It'll be a lot simpler if authors could make their graphics public domain.

At the moment, generation effort is rapidly increasing, suggesting people are estimating the present value to be higher than the current cost of production.