They are exceedingly nice, pleasant, trustworthy, mostly honest, well-intentioned, and utterly decent.
How the Bitcoin protocol actually works by Michael Nielsen on December 6, Many thousands of articles have been written purporting to explain Bitcoin, the online, peer-to-peer currency.
Most of those articles give a hand-wavy account of the underlying cryptographic protocol, omitting many details. Even those articles which delve deeper often gloss over crucial points. My aim in this post is to explain the major ideas behind the Bitcoin protocol in a clear, easily comprehensible way.
Understanding the protocol in this detailed way is hard work.
It is tempting instead to take Bitcoin as given, and to engage in speculation about how to get rich with Bitcoin, whether Bitcoin is a bubble, whether Bitcoin might one day mean the end of taxation, and so on.
Understanding the details of the Bitcoin protocol opens up otherwise inaccessible vistas. New financial instruments can, in turn, be used to create new markets and to enable new forms of collective human behaviour.
This post concentrates on explaining the nuts-and-bolts of the Bitcoin protocol. To understand the post, you need to be comfortable with public key cryptographyand with the closely related idea of digital signatures. None of this is especially difficult.
The basic ideas can be taught in freshman university mathematics or computer science classes. In the world of atoms we achieve security with devices such as locks, safes, signatures, and bank vaults.
In the world of bits we achieve this kind of security with cryptography. My strategy in the post is to build Bitcoin up in stages. We will have reinvented Bitcoin! This strategy is slower than if I explained the entire Bitcoin protocol in one shot.
But while you can understand the mechanics of Bitcoin through such a one-shot explanation, it would be difficult to understand why Bitcoin is designed the way it is.
The advantage of the slower iterative explanation is that it gives us a much sharper understanding of each element of Bitcoin. You may find these interesting, but you can also skip them entirely without losing track of the main text.
On the face of it, a digital currency sounds impossible. If Alice can use a string of bits as money, how can we prevent her from using the same bit string over and over, thus minting an infinite supply of money?
Or, if we can somehow solve that problem, how can we prevent someone else forging such a string of bits, and using that to steal from Alice? These are just two of the many problems that must be overcome in order to use information as money.
Suppose Alice wants to give another person, Bob, an infocoin. She then digitally signs the message using a private cryptographic key, and announces the signed string of bits to the entire world.
A similar useage is common, though not universal, in the Bitcoin world. But it does have some virtues. So the protocol establishes that Alice truly intends to give Bob one infocoin.
The same fact — no-one else could compose such a signed message — also gives Alice some limited protection from forgery.
To make this explicit: Later protocols will be similar, in that all our forms of digital money will be just more and more elaborate messages . Using serial numbers to make coins uniquely identifiable A problem with the first version of Infocoin is that Alice could keep sending Bob the same signed message over and over.
Does that mean Alice sent Bob ten different infocoins?Dear Twitpic Community - thank you for all the wonderful photos you have taken over the years. We have now placed Twitpic in an archived state. As I mentioned on yesterday's Clubland Q&A, I have to take off for a few weeks to remote parts in order to crack the back of a project that's been on hold for fifteen months because Cary Katz and CRTV were suing me for $10 million.(They lost.)At any rate, the coming weeks will take me somewhat off the grid WiFi-wise, and that can't be helped because it's a very small window of opportunity.
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You want toknow that you’ll be leaving your heirs your assets and notyour debts. Note to all Researchers: Please include your name on all records, along with date and total number of items "refined".
Researchers are responsible for all "Output". The most downloaded articles from Future Generation Computer Systems in the last 90 days. Internet of Things (IoT): A vision, architectural elements, and future directions Jayavardhana Gubbi | Rajkumar Buyya | On blockchain and its integration with IoT.