BitStream Protocol.pdf

BitStream is a decentralized file hosting protocol that utilizes Bitcoin payments to incentivize servers to provide storage and bandwidth. The protocol enables an open market for content hosting, where anyone can monetize their excess resources by serving decentralized multimedia services.

Key components of BitStream include:

1. Verifiable encryption: The server encrypts the file using a one-time pad with the bit-wise XOR operation, and the client verifies that it decrypts to the requested file.
2. File identification: A file is identified by its Merkle root hash, which is derived from the hashes of the file's chunks.
3. Purchasing decryption keys: The client buys the decryption key from the server using a hash time-locked contract (HTLC), which is compatible with various Bitcoin payment methods, including Lightning Network and Liquid sidechain.
4. Fraud proof: If the encrypted file does not decrypt correctly, the client can derive a succinct fraud proof, which consists of the server's signature, the preimage of the payment hash, and a Merkle inclusion proof.
5. Bond contract: The server registers itself on the blockchain, and clients can discover and verify the server's contract. The contract burns the server's deposit if a client uploads a valid fraud proof.

The protocol has several benefits, including:

Incentivizing servers: Servers are incentivized to provide storage and bandwidth, as they can charge for each download.
Scalability: The protocol can handle large files and manage many clients simultaneously.
* Security: The use of verifiable encryption and fraud proofs ensures that clients can detect and punish servers that provide incorrect files.

Overall, BitStream provides a sustainable alternative to traditional revenue models for video hosting and other decentralized file hosting applications.