What Did Satoshi Mean By A “Timestamp Server”?

In this blog post lesson, we will read the next section of the Bitcoin whitepaper which explains how the "timestamp server" works. If you have no clue what the heck that even is, then consider yourself a normal human being. Most people have never heard of a timestamp server until they read the Bitcoin whitepaper.

This part is a little easier than the last. Let’s keep going.

In Section 3 of the whitepaper, Satoshi describes the concept of a “timestamp server” as a way to track the order of network transactions.

Next, this hash is time stamped.

Finally, the time-stamped hash is broadcast to all the peers in the network.

Crucially, each hash includes the time stamp of the previous hash that came before it.

This allows us to prove that the data in the hash really existed at the time it was time stamped. Each new time-stamped hash (i.e., a Bitcoin “block” of transactions) reinforces the data that came before.

In this way, we create a chronological order of transactions happening in the network (i.e., a “chain” of blocks).

However, we are still left with one big conundrum. It’s trivial for any set of computers in the network to create a chain of transactions like this.

It is essential that we know which chain is the valid one. The hard part is figuring out how we can all agree upon the right chain of blocks. This is where “proof of work” comes in. Which is exactly what we will learn about in the next lesson.

Stay tuned!

About the author

Nicolas van Saberhagen

We created Cryptonote algorithm that has been used in creation of Monero.

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