These Bitcoin cases were originally docketed to me due to a concern that they might involve issues of some technical complexity. It turned out that the issues relating to Bitcoin technology are not particularly complex, and in this section I set out an overview of cryptocurrency technology by way of relevant technical background. In addition, some of the evidence relied upon to indicate forgery (or not) raised some technical issues, but those points are best discussed in the context of the forgery allegations.

This section is based on Professor Meiklejohn’s account of the technology, which was largely agreed by Dr Wright’s expert, Mr ZeMing Gao.

Bitcoin was the first cryptocurrency, originating in 2009. Bitcoin is known as a cryptocurrency because it is a cryptographic system, in that it relies on principles of cryptography and uses cryptographic algorithms to form and verify transactions and blocks. The two cryptographic primitives that Bitcoin relies on are hash functions and digital signatures.

It is a peer-to-peer system, meaning users can transfer payments between themselves without an intermediary or central authority. Transactions between users are incorporated into blocks by a process called mining. These blocks are in turn distributed among and verified by peers on the network, who store them by adding them to a ledger. Each block added to the ledger includes information in the form of a hash, which is affected by the blocks added before it. This ledger is therefore created by linking the blocks together to form the blockchain. The contents of one block thus cannot be changed without changing the contents of all subsequent blocks.