29 Apr 23 3:33 am type: related:
bitcoin
A peer-to-peer electronic cash system.
the history of the transactions is actually the currency
is a blockchain
sign with a message and secret key → will get a signature
verify with a message, signature and public key → get true or false
it’s infeasible to decrypt back (2^256)
to prevent duplicate txns, transaction id are got into play ( nonce )
since the ledger value is disconnected from a real entity “USD” you don’t really need to ever convert to USD if all txns happen within the ledger
decentralization vs centralization
you let everyone keep their own copy of ledger and broadcast every txn
but this could be completely false
each block = bunch of txns
block is only considered valid, if it has the proof of work ( the number of the hash which has 60 0s in the beginning)
since they’re all linked, we call it a blockchain
we allow everyone to be a block creator and do a bunch of work to find the hash which starts with 0s, and once they find the proof of work, we give them block reward
what miners do
- listen for blocks
- creating blocks
- broadcasting those blocks after finding pow
decentralized consensus with the only parameter being the amount of “work” put in
tldr on how the bitcoin protocol works
- digital signatures
- ledger is the currency
- decentralize
- proof of work
- blockchain
txn fee with every txn to incentivize miners
~2400 txns per block