tag:blogger.com,1999:blog-18065245.post4240882728860758811..comments2024-01-04T05:22:47.328-07:00Comments on mndrix: Bitcoin: Resilient Internet Paymentmndrixhttp://www.blogger.com/profile/00943372190551332722noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-18065245.post-63106076058766143512011-07-11T14:13:22.760-06:002011-07-11T14:13:22.760-06:00@zostay I recommend reading the stickied newbie th...@zostay I recommend reading the stickied newbie threads on the forum as well as https://en.bitcoin.it/wiki/Man_page<br />and https://en.bitcoin.it/wiki/Securing_your_wallet<br /><br />Here's an executive summary. Note that Bitcoin is not anonymous by default and that it's entirely possible to lose your bitcoins forever if you don't understand what you're doing.<br /><br />Each client maintains their own copy of the (atm, sole) blockchain. This is an authoritative accounting ledger detailing the history of which addresses 'own' which bitcoins. The blockchain consists of about 136000 'blocks,' detailing the movement of about 6.5M bitcoins. You can think of each block like a new page of the accounting ledger. <br /><br />The blocks are created in an extremely competitive 'mining' market. When a miner finds a block he is rewarded with 50 new bitcoins, sent to an address of his choice. This is how bitcoins are created. This reward will decrease over time, so that the money supply asymptotically approaches 21 million bitcoins.<br /><br />Note that bitcoins are subdivisible to eight decimal places. There are 100 million 'credits' or 'satoshis' in one Bitcoin.<br /><br />The current size of the network is 11.5 terahash/second which means there are 11.5 trillion attempts per second to calculate a valid solution to a hash function, create a block, and win a chunk of 50 bitcoins. <br /><br />Ttechnically, a 'valid solution' means that the output of a miner's 256 bit hash function (SHA-256), in absolute terms, is less than the current 'difficulty setting.' All network clients agree to adjust this difficulty setting every 2016 blocks, in such a fashion as to maintain a target of 10 minutes between blocks.<br /><br />Once the bitcoins have been generated, they may be spent freely. Let's say Alice generates a block and receives 50 bitcoins. (NB - this is a single large bitcoin worth 50 bitcoins, not 50 bitcoins worth 1 each, as you can have arbitrary bitcoin values. Look at any block on www.blockexplorer.com for details.)<br /><br />This 'bitcoin' is a public/private keypair. The public key correlates to the Bitcoin address, and the private key is stored in Alice's wallet.dat file. When Alice wants to pay Bob .25 bitcoins for a donut, Alice uses her private key to sign a public key that Bob provides.<br /><br />This transaction propagates through the network. When a miner hears about it, he uses it as one of the inputs of his hash function. Eventually a miner will 'include' the transaction in a valid block. At this point the transaction is complete and non-reversible. Everybody downloads a copy of the block, adding it to their local copy of the blockchain. Now everybody knows about this transaction, and if Alice tries to spend the coins again, everyone will cry foul.Platohttps://www.blogger.com/profile/04831677346428326785noreply@blogger.comtag:blogger.com,1999:blog-18065245.post-85512971401175388492011-07-08T10:48:41.814-06:002011-07-08T10:48:41.814-06:00Its always a good thing when new ideas have fail s...Its always a good thing when new ideas have fail safes built in, and when it comes to money that's especially the case. I look forward to the future of BitCoin, its the only exciting thing in finance that I've seen in a while.Travis Hendrickshttps://www.blogger.com/profile/14703742490513802482noreply@blogger.comtag:blogger.com,1999:blog-18065245.post-64728200577703415292011-07-08T10:34:08.204-06:002011-07-08T10:34:08.204-06:00The best technical description of the system I'...The best technical description of the system I've seen is the original paper written by Satoshi Nakamoto: http://bitcoin.org/bitcoin.pdf It details the cryptography pretty thoroughlymndrixhttps://www.blogger.com/profile/00943372190551332722noreply@blogger.comtag:blogger.com,1999:blog-18065245.post-35654339982800635182011-07-08T10:30:40.324-06:002011-07-08T10:30:40.324-06:00I would really like to have someone explain, in te...I would really like to have someone explain, in technical terms, how all these things are possible. I've read some of the marketing slicks online for BitCoin, but none of it delves enough into the implementation details to make any sense to me. Especially, I'm interested in what makes BitCoin secure and anonymous even though the transactions are somehow stored and processed globally.<br /><br />Is there anything you can suggest I read to learn more that actually makes sense to a hacker?zostayhttps://www.blogger.com/profile/07616212672179956374noreply@blogger.com