In Chapter 7, we analyze the current Bitcoin ecosystem. Although Bitcoin does not truly solve all of the challenges faced by previously proposed digital currencies, Bitcoin grew to witness a wider adoption and attention than any other digital currency proposed to date. At the time of writing, Bitcoin holds the largest market share among all existing digital currencies.

In this chapter, we overview the main operation of Bitcoin and describe a number of businesses, exchange platforms, and wallets that are currently built around the Bitcoin ecosystem. We also analyze the limits of decentralization in the Bitcoin ecosystem. Namely, based on recent incidents and observations, we show that the vital operations and decisions that Bitcoin is currently undertaking are not decentralized. More specifically, we show that a limited set of entities currently control the services, decision making, mining, and the incident resolution processes in Bitcoin. We also discuss the security of online wallets and outline a number of innovative techniques to ensure the protection of private keys against compromise and/or loss.