What is Satoshi’s ‘Timestamp Server’ Concept?

In this article 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 congratulations — You are a normal human being. Most people have never heard of a timestamp server until they read the Bitcoin Whitepaper.

Let’s dive in. 🤓

Timestamp server

This breakdown is a little less technical than the last one, thankfully.

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

While Bitcoin is complex, the timestamp server idea is a fairly simple concept. First, a set of data (in this case, transactions) is hashed.

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 article. :)

See you there!