<s>
The	O
Bitcoin	B-General_Concept
network	I-General_Concept
is	O
a	O
peer-to-peer	O
network	O
of	O
nodes	O
which	O
implement	O
the	B-General_Concept
Bitcoin	I-General_Concept
protocol	I-General_Concept
.	O
</s>
<s>
The	O
protocol	O
itself	O
implements	O
a	O
highly	O
available	O
,	O
public	O
,	O
and	O
decentralized	O
ledger	B-Language
.	O
</s>
<s>
The	O
nodes	O
verify	O
that	O
each	O
update	O
to	O
the	O
ledger	B-Language
follows	O
the	O
rules	O
of	O
the	B-General_Concept
Bitcoin	I-General_Concept
protocol	I-General_Concept
.	O
</s>
<s>
Users	O
broadcast	O
cryptographically-signed	O
messages	O
to	O
the	O
network	O
using	O
Bitcoin	B-General_Concept
cryptocurrency	B-Protocol
wallet	I-Protocol
software	O
.	O
</s>
<s>
These	O
messages	O
are	O
proposed	O
transactions	O
,	O
changes	O
to	O
be	O
made	O
in	O
the	O
ledger	B-Language
.	O
</s>
<s>
Each	O
node	O
has	O
a	O
copy	O
of	O
the	O
ledger	B-Language
's	O
entire	O
transaction	O
history	O
.	O
</s>
<s>
If	O
a	O
transaction	O
violates	O
the	O
rules	O
of	O
the	B-General_Concept
Bitcoin	I-General_Concept
protocol	I-General_Concept
,	O
it	O
is	O
ignored	O
.	O
</s>
<s>
Mining	O
packages	O
groups	O
of	O
transactions	O
into	O
blocks	O
,	O
and	O
produces	O
a	O
hash	B-Error_Name
code	I-Error_Name
that	O
follows	O
the	O
rules	O
of	O
the	B-General_Concept
Bitcoin	I-General_Concept
protocol	I-General_Concept
.	O
</s>
<s>
Creating	O
this	O
hash	B-Error_Name
requires	O
expensive	O
energy	O
,	O
but	O
a	O
network	O
node	O
can	O
verify	O
the	O
hash	B-Error_Name
is	O
valid	O
using	O
very	O
little	O
energy	O
.	O
</s>
<s>
If	O
a	O
miner	O
proposes	O
a	O
block	O
to	O
the	O
network	O
,	O
and	O
its	O
hash	B-Error_Name
is	O
valid	O
,	O
the	O
block	O
and	O
its	O
ledger	B-Language
changes	O
are	O
added	O
to	O
the	O
blockchain	O
,	O
and	O
the	O
network	O
moves	O
on	O
to	O
yet	O
unprocessed	O
transactions	O
.	O
</s>
<s>
Satoshi	O
Nakamoto	O
,	O
the	O
anonymous	O
designer	O
of	O
the	O
protocol	O
,	O
stated	O
that	O
design	O
and	O
coding	O
of	O
Bitcoin	B-General_Concept
began	O
in	O
2007	O
.	O
</s>
<s>
The	O
project	O
was	O
released	O
in	O
2009	O
as	O
open	B-Application
source	I-Application
software	I-Application
.	O
</s>
<s>
A	O
bitcoin	B-General_Concept
is	O
defined	O
by	O
a	O
sequence	O
of	O
digitally	O
signed	O
transactions	O
that	O
began	O
with	O
the	O
bitcoin	B-General_Concept
's	O
creation	O
,	O
as	O
a	O
block	O
reward	O
.	O
</s>
<s>
The	O
owner	O
of	O
a	O
bitcoin	B-General_Concept
transfers	O
it	O
by	O
digitally	O
signing	O
it	O
over	O
to	O
the	O
next	O
owner	O
using	O
a	O
bitcoin	B-General_Concept
transaction	O
,	O
much	O
like	O
endorsing	O
a	O
traditional	O
bank	O
check	O
.	O
</s>
<s>
Unlike	O
traditional	O
check	O
endorsements	O
,	O
bitcoin	B-General_Concept
transactions	O
are	O
irreversible	O
,	O
which	O
eliminates	O
risk	O
of	O
chargeback	O
fraud	O
.	O
</s>
<s>
Although	O
it	O
is	O
possible	O
to	O
handle	O
bitcoins	B-General_Concept
individually	O
,	O
it	O
would	O
be	O
unwieldy	O
to	O
require	O
a	O
separate	O
transaction	O
for	O
every	O
bitcoin	B-General_Concept
in	O
a	O
transaction	O
.	O
</s>
<s>
Transactions	O
are	O
therefore	O
allowed	O
to	O
contain	O
multiple	O
inputs	O
and	O
outputs	O
,	O
allowing	O
bitcoins	B-General_Concept
to	O
be	O
split	O
and	O
combined	O
.	O
</s>
<s>
To	O
form	O
a	O
distributed	O
timestamp	O
server	O
as	O
a	O
peer-to-peer	O
network	O
,	O
bitcoin	B-General_Concept
uses	O
a	O
proof-of-work	O
system	O
.	O
</s>
<s>
This	O
work	O
is	O
often	O
called	O
bitcoin	B-General_Concept
mining	O
.	O
</s>
<s>
During	O
mining	O
,	O
practically	O
the	O
entire	O
computing	O
power	O
of	O
the	O
Bitcoin	B-General_Concept
network	I-General_Concept
is	O
used	O
to	O
solve	O
cryptographic	O
tasks	O
,	O
the	O
proof	O
of	O
work	O
.	O
</s>
<s>
Because	O
of	O
the	O
difficulty	O
,	O
miners	O
form	O
"	O
mining	B-Protocol
pools	I-Protocol
"	O
to	O
get	O
payouts	O
despite	O
these	O
high	O
power	O
requirements	O
,	O
costly	O
hardware	O
deployments	O
,	O
and/or	O
hardware	O
under	O
their	O
own	O
control	O
.	O
</s>
<s>
The	O
largest	O
proportion	O
of	O
mining	B-Protocol
pools	I-Protocol
are	O
based	O
in	O
China	O
,	O
which	O
is	O
also	O
where	O
most	O
of	O
the	O
miners	O
—	O
or	O
about	O
75%	O
of	O
the	O
computing	O
power	O
—	O
of	O
the	O
cryptocurrency	O
are	O
based	O
.	O
</s>
<s>
The	O
mining	O
process	O
involves	O
identifying	O
a	O
block	O
that	O
,	O
when	O
hashed	O
twice	O
with	O
SHA-256	B-Algorithm
,	O
yields	O
a	O
number	O
smaller	O
than	O
the	O
given	O
difficulty	O
target	O
.	O
</s>
<s>
While	O
the	O
average	O
work	O
required	O
increases	O
in	O
inverse	O
proportion	O
to	O
the	O
difficulty	O
target	O
,	O
a	O
hash	B-Error_Name
can	O
always	O
be	O
verified	O
by	O
executing	O
a	O
single	O
round	O
of	O
double	O
SHA-256	B-Algorithm
.	O
</s>
<s>
For	O
the	O
bitcoin	B-General_Concept
timestamp	O
network	O
,	O
a	O
valid	O
proof	O
of	O
work	O
is	O
found	O
by	O
incrementing	O
a	O
nonce	O
until	O
a	O
value	O
is	O
found	O
that	O
gives	O
the	O
block	O
's	O
hash	B-Error_Name
the	O
required	O
number	O
of	O
leading	O
zero	O
bits	O
.	O
</s>
<s>
Once	O
the	O
hashing	B-Error_Name
has	O
produced	O
a	O
valid	O
result	O
,	O
the	O
block	O
cannot	O
be	O
changed	O
without	O
redoing	O
the	O
work	O
.	O
</s>
<s>
Majority	O
consensus	O
in	O
bitcoin	B-General_Concept
is	O
represented	O
by	O
the	O
longest	O
chain	O
,	O
which	O
required	O
the	O
greatest	O
amount	O
of	O
effort	O
to	O
produce	O
.	O
</s>
<s>
To	O
compensate	O
for	O
increasing	O
hardware	O
speed	O
and	O
varying	O
interest	O
in	O
running	O
nodes	O
over	O
time	O
,	O
the	O
difficulty	O
of	O
finding	O
a	O
valid	O
hash	B-Error_Name
is	O
adjusted	O
roughly	O
every	O
two	O
weeks	O
.	O
</s>
<s>
If	O
blocks	O
are	O
generated	O
too	O
quickly	O
,	O
the	O
difficulty	O
increases	O
and	O
more	O
hashes	B-Error_Name
are	O
required	O
to	O
make	O
a	O
block	O
and	O
to	O
generate	O
new	O
bitcoins	B-General_Concept
.	O
</s>
<s>
Bitcoin	B-General_Concept
mining	O
is	O
a	O
competitive	O
endeavor	O
.	O
</s>
<s>
An	O
"	O
arms	O
race	O
"	O
has	O
been	O
observed	O
through	O
the	O
various	O
hashing	B-Error_Name
technologies	O
that	O
have	O
been	O
used	O
to	O
mine	O
bitcoins	B-General_Concept
:	O
basic	O
central	B-General_Concept
processing	I-General_Concept
units	I-General_Concept
(	O
CPUs	O
)	O
,	O
high-end	O
graphics	B-Architecture
processing	I-Architecture
units	I-Architecture
(	O
GPUs	B-Architecture
)	O
,	O
field-programmable	B-Architecture
gate	I-Architecture
arrays	I-Architecture
(	O
FPGAs	B-Architecture
)	O
and	O
application-specific	O
integrated	O
circuits	O
(	O
ASICs	O
)	O
all	O
have	O
been	O
used	O
,	O
each	O
reducing	O
the	O
profitability	O
of	O
the	O
less-specialized	O
technology	O
.	O
</s>
<s>
Bitcoin-specific	O
ASICs	O
are	O
now	O
the	O
primary	O
method	O
of	O
mining	O
bitcoin	B-General_Concept
and	O
have	O
surpassed	O
GPU	B-Architecture
speed	O
by	O
as	O
much	O
as	O
300-fold	O
.	O
</s>
<s>
As	O
bitcoins	B-General_Concept
have	O
become	O
more	O
difficult	O
to	O
mine	O
,	O
computer	O
hardware	O
manufacturing	O
companies	O
have	O
seen	O
an	O
increase	O
in	O
sales	O
of	O
high-end	O
ASIC	O
products	O
.	O
</s>
<s>
Computing	O
power	O
is	O
often	O
bundled	O
together	O
or	O
"	O
pooled	B-Protocol
"	O
to	O
reduce	O
variance	O
in	O
miner	O
income	O
.	O
</s>
<s>
The	O
Cambridge	O
Bitcoin	B-General_Concept
Electricity	O
Consumption	O
Index	O
estimates	O
the	O
energy	O
use	O
of	O
the	O
bitcoin	B-General_Concept
network	I-General_Concept
grew	O
from	O
1.95	O
terawatt-hours	O
per	O
year	O
at	O
the	O
end	O
of	O
2014	O
,	O
to	O
77.1	O
terawatt-hours	O
per	O
year	O
by	O
the	O
end	O
of	O
2019	O
.	O
</s>
<s>
Seeking	O
lower	O
electricity	O
costs	O
,	O
some	O
bitcoin	B-General_Concept
miners	O
have	O
set	O
up	O
in	O
places	O
like	O
Iceland	O
where	O
geothermal	O
energy	O
is	O
cheap	O
and	O
cooling	O
Arctic	O
air	O
is	O
free	O
.	O
</s>
<s>
Chinese	O
bitcoin	B-General_Concept
miners	O
are	O
known	O
to	O
use	O
hydroelectric	O
power	O
in	O
Tibet	O
to	O
reduce	O
electricity	O
costs	O
.	O
</s>
<s>
North	O
American	O
companies	O
are	O
utilizing	O
stranded	O
gas	O
as	O
a	O
cost-effective	O
source	O
of	O
energy	O
for	O
bitcoin	B-General_Concept
mining	O
.	O
</s>
<s>
In	O
West	O
Texas	O
,	O
wind	O
powers	O
bitcoin	B-General_Concept
mining	O
.	O
</s>
<s>
As	O
of	O
April	O
2021	O
,	O
at	O
least	O
one-third	O
of	O
Bitcoin	B-General_Concept
mining	O
was	O
powered	O
by	O
coal	O
in	O
China	O
's	O
Xinjiang	O
region	O
.	O
</s>
<s>
A	O
2021	O
study	O
found	O
that	O
carbon	O
emissions	O
from	O
Bitcoin	B-General_Concept
mining	O
in	O
China	O
—	O
where	O
a	O
majority	O
of	O
the	O
proof-of-work	O
algorithm	O
that	O
generated	O
economic	O
value	O
was	O
computed	O
prior	O
to	O
mid-2021	O
—	O
had	O
accelerated	O
rapidly	O
in	O
the	O
late	O
2010s	O
,	O
are	O
largely	O
fueled	O
by	O
nonrenewable	O
sources	O
and	O
was	O
expected	O
to	O
exceed	O
total	O
annual	O
emissions	O
of	O
countries	O
like	O
Italy	O
and	O
Spain	O
during	O
2016	O
,	O
interfering	O
with	O
international	O
climate	O
change	O
mitigation	O
commitments	O
.	O
</s>
<s>
It	O
was	O
also	O
found	O
that	O
in	O
2021	O
,	O
bitcoin	B-General_Concept
mining	O
consumed	O
more	O
energy	O
than	O
the	O
country	O
of	O
New	O
Zealand	O
.	O
</s>
<s>
Yet	O
as	O
many	O
as	O
20	O
percent	O
of	O
"	O
all	O
the	O
world	O
's	O
bitcoin	B-General_Concept
miners	O
remain	O
in	O
China	O
.	O
</s>
<s>
Here	O
are	O
the	O
basic	O
steps	O
of	O
the	O
Bitcoin	B-General_Concept
mining	O
process	O
:	O
</s>
<s>
Acquiring	O
mining	O
hardware	O
:	O
Bitcoin	B-General_Concept
mining	O
requires	O
specialized	O
hardware	O
called	O
ASICs	O
,	O
which	O
are	O
designed	O
specifically	O
for	O
mining	O
Bitcoin	B-General_Concept
.	O
</s>
<s>
Joining	O
a	O
mining	B-Protocol
pool	I-Protocol
:	O
Most	O
Bitcoin	B-General_Concept
miners	O
join	O
a	O
mining	B-Protocol
pool	I-Protocol
to	O
increase	O
their	O
chances	O
of	O
successfully	O
mining	O
a	O
block	O
.	O
</s>
<s>
Mining	B-Protocol
pools	I-Protocol
are	O
groups	O
of	O
miners	O
who	O
work	O
together	O
to	O
solve	O
complex	O
mathematical	O
problems	O
and	O
share	O
the	O
rewards	O
.	O
</s>
<s>
Installing	O
mining	O
software	O
:	O
Once	O
the	O
hardware	O
is	O
set	O
up	O
and	O
the	O
mining	B-Protocol
pool	I-Protocol
is	O
joined	O
,	O
miners	O
need	O
to	O
install	O
mining	O
software	O
on	O
their	O
computers	O
.	O
</s>
<s>
This	O
software	O
connects	O
the	O
miner	O
's	O
hardware	O
to	O
the	O
mining	B-Protocol
pool	I-Protocol
and	O
the	O
Bitcoin	B-General_Concept
network	I-General_Concept
.	O
</s>
<s>
Solving	O
mathematical	O
problems	O
:	O
The	O
mining	O
software	O
instructs	O
the	O
hardware	O
to	O
solve	O
complex	O
mathematical	O
problems	O
called	O
hash	B-Error_Name
functions	I-Error_Name
.	O
</s>
<s>
Verification	O
:	O
Once	O
a	O
miner	O
solves	O
a	O
block	O
,	O
it	O
needs	O
to	O
be	O
verified	O
by	O
other	O
nodes	O
on	O
the	O
Bitcoin	B-General_Concept
network	I-General_Concept
.	O
</s>
<s>
Reward	O
:	O
Miners	O
who	O
successfully	O
solve	O
a	O
block	O
are	O
rewarded	O
with	O
newly	O
minted	O
bitcoins	B-General_Concept
and	O
any	O
transaction	O
fees	O
associated	O
with	O
the	O
block	O
.	O
</s>
<s>
The	O
current	O
reward	O
for	O
mining	O
a	O
block	O
is	O
6.25	O
bitcoins	B-General_Concept
,	O
and	O
the	O
reward	O
is	O
halved	O
every	O
210,000	O
blocks	O
,	O
or	O
roughly	O
every	O
four	O
years	O
.	O
</s>
<s>
By	O
convention	O
,	O
the	O
first	O
transaction	O
in	O
a	O
block	O
is	O
a	O
special	O
transaction	O
that	O
produces	O
new	O
bitcoins	B-General_Concept
owned	O
by	O
the	O
creator	O
of	O
the	O
block	O
.	O
</s>
<s>
It	O
provides	O
the	O
way	O
to	O
move	O
new	O
bitcoins	B-General_Concept
into	O
circulation	O
.	O
</s>
<s>
It	O
started	O
at	O
50	O
bitcoin	B-General_Concept
,	O
dropped	O
to	O
25	O
in	O
late	O
2012	O
and	O
to	O
12.5	O
bitcoin	B-General_Concept
in	O
2016	O
.	O
</s>
<s>
The	O
most	O
recent	O
halving	O
,	O
which	O
occurred	O
in	O
May	O
2020	O
(	O
with	O
block	O
number	O
630,000	O
)	O
,	O
reduced	O
the	O
block	O
reward	O
to	O
6.25	O
bitcoin	B-General_Concept
.	O
</s>
<s>
Various	O
potential	O
attacks	O
on	O
the	O
bitcoin	B-General_Concept
network	I-General_Concept
and	O
its	O
use	O
as	O
a	O
payment	O
system	O
,	O
real	O
or	O
theoretical	O
,	O
have	O
been	O
considered	O
.	O
</s>
<s>
The	B-General_Concept
bitcoin	I-General_Concept
protocol	I-General_Concept
includes	O
several	O
features	O
that	O
protect	O
it	O
against	O
some	O
of	O
those	O
attacks	O
,	O
such	O
as	O
unauthorized	O
spending	O
,	O
double	B-Operating_System
spending	I-Operating_System
,	O
forging	O
bitcoins	B-General_Concept
,	O
and	O
tampering	O
with	O
the	O
blockchain	O
.	O
</s>
<s>
Unauthorized	O
spending	O
is	O
mitigated	O
by	O
bitcoin	B-General_Concept
's	O
implementation	O
of	O
public-private	O
key	O
cryptography	O
.	O
</s>
<s>
For	O
example	O
,	O
when	O
Alice	O
sends	O
a	O
bitcoin	B-General_Concept
to	O
Bob	O
,	O
Bob	O
becomes	O
the	O
new	O
owner	O
of	O
the	O
bitcoin	B-General_Concept
.	O
</s>
<s>
Eve	O
,	O
observing	O
the	O
transaction	O
,	O
might	O
want	O
to	O
spend	O
the	O
bitcoin	B-General_Concept
Bob	O
just	O
received	O
,	O
but	O
she	O
cannot	O
sign	O
the	O
transaction	O
without	O
the	O
knowledge	O
of	O
Bob	O
's	O
private	O
key	O
.	O
</s>
<s>
A	O
specific	O
problem	O
that	O
an	O
internet	O
payment	O
system	O
must	O
solve	O
is	O
double-spending	B-Operating_System
,	O
whereby	O
a	O
user	O
pays	O
the	O
same	O
coin	O
to	O
two	O
or	O
more	O
different	O
recipients	O
.	O
</s>
<s>
An	O
example	O
of	O
such	O
a	O
problem	O
would	O
be	O
if	O
Eve	O
sent	O
a	O
bitcoin	B-General_Concept
to	O
Alice	O
and	O
later	O
sent	O
the	O
same	O
bitcoin	B-General_Concept
to	O
Bob	O
.	O
</s>
<s>
The	O
bitcoin	B-General_Concept
network	I-General_Concept
guards	O
against	O
double-spending	B-Operating_System
by	O
recording	O
all	O
bitcoin	B-General_Concept
transfers	O
in	O
a	O
ledger	B-Language
(	O
the	O
blockchain	O
)	O
that	O
is	O
visible	O
to	O
all	O
users	O
,	O
and	O
ensuring	O
for	O
all	O
transferred	O
bitcoins	B-General_Concept
that	O
they	O
have	O
not	O
been	O
previously	O
spent	O
.	O
</s>
<s>
If	O
Eve	O
offers	O
to	O
pay	O
Alice	O
a	O
bitcoin	B-General_Concept
in	O
exchange	O
for	O
goods	O
and	O
signs	O
a	O
corresponding	O
transaction	O
,	O
it	O
is	O
still	O
possible	O
that	O
she	O
also	O
creates	O
a	O
different	O
transaction	O
at	O
the	O
same	O
time	O
sending	O
the	O
same	O
bitcoin	B-General_Concept
to	O
Bob	O
.	O
</s>
<s>
This	O
is	O
called	O
a	O
race	B-Operating_System
attack	I-Operating_System
,	O
since	O
there	O
is	O
a	O
race	O
which	O
transaction	O
will	O
be	O
accepted	O
first	O
.	O
</s>
<s>
Alice	O
can	O
reduce	O
the	O
risk	O
of	O
race	B-Operating_System
attack	I-Operating_System
stipulating	O
that	O
she	O
will	O
not	O
deliver	O
the	O
goods	O
until	O
Eve	O
's	O
payment	O
to	O
Alice	O
appears	O
in	O
the	O
blockchain	O
.	O
</s>
<s>
A	O
variant	O
race	B-Operating_System
attack	I-Operating_System
(	O
which	O
has	O
been	O
called	O
a	O
Finney	O
attack	O
by	O
reference	O
to	O
Hal	O
Finney	O
)	O
requires	O
the	O
participation	O
of	O
a	O
miner	O
.	O
</s>
<s>
As	O
with	O
the	O
plain	O
race	B-Operating_System
attack	I-Operating_System
,	O
Alice	O
can	O
reduce	O
the	O
risk	O
of	O
a	O
Finney	O
attack	O
by	O
waiting	O
for	O
the	O
payment	O
to	O
be	O
included	O
in	O
the	O
blockchain	O
.	O
</s>
<s>
Ideally	O
,	O
merchants	O
and	O
services	O
that	O
receive	O
payment	O
in	O
bitcoin	B-General_Concept
should	O
wait	O
for	O
at	O
least	O
one	O
confirmation	O
to	O
be	O
distributed	O
over	O
the	O
network	O
,	O
before	O
assuming	O
that	O
the	O
payment	O
was	O
done	O
.	O
</s>
<s>
Along	O
with	O
transaction	O
graph	O
analysis	O
,	O
which	O
may	O
reveal	O
connections	O
between	O
bitcoin	B-General_Concept
addresses	O
(	O
pseudonyms	O
)	O
,	O
there	O
is	O
a	O
possible	O
attack	O
which	O
links	O
a	O
user	O
's	O
pseudonym	O
to	O
its	O
IP	B-Protocol
address	I-Protocol
.	O
</s>
<s>
If	O
the	O
peer	O
is	O
using	O
Tor	B-Application
,	O
the	O
attack	O
includes	O
a	O
method	O
to	O
separate	O
the	O
peer	O
from	O
the	O
Tor	B-Application
network	I-Application
,	O
forcing	O
them	O
to	O
use	O
their	O
real	O
IP	B-Protocol
address	I-Protocol
for	O
any	O
further	O
transactions	O
.	O
</s>
<s>
The	O
attack	O
makes	O
use	O
of	O
bitcoin	B-General_Concept
mechanisms	O
of	O
relaying	O
peer	O
addresses	O
and	O
anti-DoS	O
protection	O
.	O
</s>
<s>
The	O
cost	O
of	O
the	O
attack	O
on	O
the	O
full	O
bitcoin	B-General_Concept
network	I-General_Concept
is	O
under	O
€1500	O
per	O
month	O
.	O
</s>
<s>
As	O
noted	O
in	O
Nakamoto	O
's	O
whitepaper	O
,	O
it	O
is	O
possible	O
to	O
verify	O
bitcoin	B-General_Concept
payments	O
without	O
running	O
a	O
full	O
network	O
node	O
(	O
simplified	O
payment	O
verification	O
,	O
SPV	O
)	O
.	O
</s>
<s>
A	O
user	O
only	O
needs	O
a	O
copy	O
of	O
the	O
block	O
headers	O
of	O
the	O
longest	O
chain	O
,	O
which	O
are	O
available	O
by	O
querying	O
network	O
nodes	O
until	O
it	O
is	O
apparent	O
that	O
the	O
longest	O
chain	O
has	O
been	O
obtained	O
;	O
then	O
,	O
get	O
the	O
Merkle	B-Algorithm
tree	I-Algorithm
branch	O
linking	O
the	O
transaction	O
to	O
its	O
block	O
.	O
</s>
<s>
The	O
first	O
block	O
of	O
the	O
Bitcoin	B-General_Concept
blockchain	O
,	O
known	O
as	O
the	O
"	O
Genesis	O
Block	O
"	O
,	O
contains	O
a	O
famous	O
newspaper	O
headline	O
that	O
may	O
hint	O
at	O
Bitcoin	B-General_Concept
's	O
mission	O
.	O
</s>
<s>
Various	O
items	O
have	O
been	O
embedded	O
,	O
including	O
URLs	O
to	O
websites	O
,	O
an	O
ASCII	O
art	O
image	O
of	O
Ben	O
Bernanke	O
,	O
material	O
from	O
the	O
Wikileaks	O
cables	O
,	O
prayers	O
from	O
bitcoin	B-General_Concept
miners	O
,	O
and	O
the	O
original	O
bitcoin	B-General_Concept
whitepaper	O
.	O
</s>
<s>
The	O
use	O
of	O
bitcoin	B-General_Concept
by	O
criminals	O
has	O
attracted	O
the	O
attention	O
of	O
financial	O
regulators	O
,	O
legislative	O
bodies	O
,	O
law	O
enforcement	O
,	O
and	O
the	O
media	O
.	O
</s>
<s>
Several	O
news	O
outlets	O
have	O
asserted	O
that	O
the	O
popularity	O
of	O
bitcoins	B-General_Concept
hinges	O
on	O
the	O
ability	O
to	O
use	O
them	O
to	O
purchase	O
illegal	O
goods	O
.	O
</s>
<s>
In	O
2014	O
,	O
researchers	O
at	O
the	O
University	O
of	O
Kentucky	O
found	O
"	O
robust	O
evidence	O
that	O
computer	O
programming	O
enthusiasts	O
and	O
illegal	O
activity	O
drive	O
interest	O
in	O
bitcoin	B-General_Concept
,	O
and	O
find	O
limited	O
or	O
no	O
support	O
for	O
political	O
and	O
investment	O
motives.	O
"	O
</s>
<s>
Child	O
pornography	O
,	O
murder-for-hire	O
,	O
and	O
weapons	O
are	O
also	O
allegedly	O
available	O
on	O
black	O
market	O
sites	O
that	O
sell	O
in	O
bitcoin	B-General_Concept
.	O
</s>
<s>
Due	O
to	O
the	O
anonymous	O
nature	O
and	O
the	O
lack	O
of	O
central	O
control	O
on	O
these	O
markets	O
,	O
it	O
is	O
hard	O
to	O
know	O
whether	O
the	O
services	O
are	O
real	O
or	O
just	O
trying	O
to	O
take	O
the	O
bitcoins	B-General_Concept
.	O
</s>
<s>
In	O
October	O
2013	O
Silk	O
Road	O
was	O
shut	O
down	O
by	O
U.S.	O
law	O
enforcement	O
,	O
leading	O
to	O
a	O
short-term	O
decrease	O
in	O
the	O
value	O
of	O
bitcoin	B-General_Concept
.	O
</s>
<s>
In	O
early	O
2014	O
,	O
Dutch	O
authorities	O
closed	O
Utopia	O
,	O
an	O
online	O
illegal	O
goods	O
market	O
,	O
and	O
seized	O
900	O
bitcoins	B-General_Concept
.	O
</s>
<s>
In	O
late	O
2014	O
,	O
a	O
joint	O
police	O
operation	O
saw	O
European	O
and	O
American	O
authorities	O
seize	O
bitcoins	B-General_Concept
and	O
close	O
400	O
deep	O
web	O
sites	O
including	O
the	O
illicit	O
goods	O
market	O
Silk	O
Road	O
2.0	O
.	O
</s>
<s>
Some	O
black	O
market	O
sites	O
may	O
seek	O
to	O
steal	O
bitcoins	B-General_Concept
from	O
customers	O
.	O
</s>
<s>
The	O
bitcoin	B-General_Concept
community	O
branded	O
one	O
site	O
,	O
Sheep	O
Marketplace	O
,	O
as	O
a	O
scam	O
when	O
it	O
prevented	O
withdrawals	O
and	O
shut	O
down	O
after	O
an	O
alleged	O
bitcoins	B-General_Concept
theft	O
.	O
</s>
<s>
In	O
a	O
separate	O
case	O
,	O
escrow	O
accounts	O
with	O
bitcoins	B-General_Concept
belonging	O
to	O
patrons	O
of	O
a	O
different	O
black	O
market	O
were	O
hacked	O
in	O
early	O
2014	O
.	O
</s>
<s>
According	O
to	O
the	O
Internet	O
Watch	O
Foundation	O
,	O
a	O
UK-based	O
charity	O
,	O
bitcoin	B-General_Concept
is	O
used	O
to	O
purchase	O
child	O
pornography	O
,	O
and	O
almost	O
200	O
such	O
websites	O
accept	O
it	O
as	O
payment	O
.	O
</s>
<s>
Bitcoin	B-General_Concept
is	O
not	O
the	O
sole	O
way	O
to	O
purchase	O
child	O
pornography	O
online	O
,	O
as	O
Troels	O
Oertling	O
,	O
head	O
of	O
the	O
cybercrime	O
unit	O
at	O
Europol	O
,	O
states	O
,	O
"	O
Ukash	O
and	O
paysafecard	O
...	O
have	O
 [ also ] 	O
been	O
used	O
to	O
pay	O
for	O
such	O
material.	O
"	O
</s>
<s>
However	O
,	O
the	O
Internet	O
Watch	O
Foundation	O
lists	O
around	O
30	O
sites	O
that	O
exclusively	O
accept	O
bitcoins	B-General_Concept
.	O
</s>
<s>
Bitcoins	B-General_Concept
may	O
not	O
be	O
ideal	O
for	O
money	O
laundering	O
,	O
because	O
all	O
transactions	O
are	O
public	O
.	O
</s>
<s>
Authorities	O
—	O
including	O
the	O
European	O
Banking	O
Authority	O
,	O
the	O
FBI	O
,	O
National	O
Treasury	O
(	O
South	O
Africa	O
)	O
and	O
the	O
Financial	O
Action	O
Task	O
Force	O
of	O
the	O
G7	B-Device
—	O
have	O
expressed	O
concerns	O
that	O
bitcoin	B-General_Concept
may	O
be	O
used	O
for	O
money	O
laundering	O
.	O
</s>
<s>
In	O
early	O
2014	O
,	O
an	O
operator	O
of	O
a	O
U.S.	O
bitcoin	B-General_Concept
exchange	O
,	O
Charlie	O
Shrem	O
,	O
was	O
arrested	O
for	O
money	O
laundering	O
.	O
</s>
<s>
A	O
report	O
by	O
the	O
UK	O
's	O
Treasury	O
and	O
Home	O
Office	O
named	O
"	O
UK	O
national	O
risk	O
assessment	O
of	O
money	O
laundering	O
and	O
terrorist	O
financing	O
"	O
(	O
October	O
2015	O
)	O
found	O
that	O
,	O
of	O
the	O
twelve	O
methods	O
examined	O
in	O
the	O
report	O
,	O
bitcoin	B-General_Concept
carries	O
the	O
lowest	O
risk	O
of	O
being	O
used	O
for	O
money	O
laundering	O
,	O
with	O
the	O
most	O
common	O
money	O
laundering	O
method	O
being	O
the	O
banks	O
.	O
</s>
<s>
According	O
to	O
reports	O
from	O
IRS	O
Criminal	O
Investigation	O
,	O
Sterlingov	O
was	O
the	O
principal	O
operator	O
of	O
a	O
Cryptocurrency	O
tumbler	O
Bitcoin	B-General_Concept
Fog	O
,	O
launched	O
in	O
2011	O
.	O
</s>
<s>
In	O
a	O
Ponzi	O
scheme	O
using	O
bitcoins	B-General_Concept
,	O
the	O
Bitcoin	B-General_Concept
Savings	O
and	O
Trust	O
promised	O
investors	O
up	O
to	O
7%	O
weekly	O
interest	O
,	O
and	O
raised	O
at	O
least	O
700,000	O
bitcoins	B-General_Concept
from	O
2011	O
to	O
2012	O
.	O
</s>
<s>
In	O
July	O
2013	O
,	O
the	O
U.S.	O
Securities	O
and	O
Exchange	O
Commission	O
charged	O
the	O
company	O
and	O
its	O
founder	O
in	O
2013	O
"	O
with	O
defrauding	O
investors	O
in	O
a	O
Ponzi	O
scheme	O
involving	O
bitcoin	B-General_Concept
"	O
.	O
</s>
