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Bitcoin | ||
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Bitcoin was invented in 2008[2]. It is primary function was to be an online currency, which could be paid with over the internet. | ||
With a boom of it's price people started to treat it like a commodity. And it's creation started a cryptocurrency era which then spawned in great numbers. | ||
Many had different mechanisms, some of them can be considered to be technically improved, some enhanced, some of them are out of technical point of view | ||
downright worse. To name a few: Etherium, Monero, Dogecoin. | ||
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There are many instances of reason that gave an opportunity to it's rise that allowed it to be globally somehow adopted. | ||
I believe that many of these instances are connected to technical solutions that Bitcoin offers. It gives it's | ||
users a few, whoever stone carved advantages over clasic currencies. Some of them being certain degree | ||
of annonymity or assurance that there will never exist more than 23 000 000 units (which I will further on refer to as bitcoins[1]). | ||
This means there will be no problem with inflation, on the other hand there is a deflation. It allows it's users to pay worldwide without a third person. | ||
Bitcoin is created to be distributed[2] which makes it to a certain degree uncontrolable by anyone, unless he has at his disposal more than half | ||
of all computing power that surges through Bitcoin (this is called 51% attack[2]). For each transaction there is a certain everchanging fee. That is reaped by a miner who | ||
mines the block with the transaction on it. One of cryptographical foundation that Bitcoin is build upon is a Blockchain which is a vital | ||
part in how the currency circulates between wallets and users. It's technical background is secured by cryptography and math. | ||
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What it means that miner mined a block? It means that he was lucky and his part of computing power achieved generating a new block out | ||
of hash of the previous block (his parent) and things it found on the internet, computed or guessed. And afterwards was the | ||
It consists of large quantity of blocks of information, which are bound together not unlike a linked list. Each block holds an | ||
information that can be used to assert it's parrent. A very first block was mined by Bitcoin's creator Satoshi Nakamoto[1], it is | ||
called Genesis block. This block holds no such information. | ||
Information on these blocks consists of mostly transactions and movements of bitcoins across the blocks as well as an amount of newly | ||
mined bitcoins, which could be further decoded into new addresses which the successful miner generated and to which he presumably | ||
holds a secret that could be imagined as a ticket to access these 'coins'. | ||
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The amount of mined bitcoins is not static. It is continuously decreesed by half of the amount in a process called Halving until | ||
there will be none bitcoin mined. And the blocks will be created purely for transactions and fees they bring to the miner. | ||
Therefore there will be constantly a decreesing amount which will be increasing total amount of bitcoins up to 21 000 000. | ||
(times 100 000 000 satoshi). This all is achieved by clever usage of hash functions. | ||
The more different miners participate in the mining and the more evenly is computing power distributed among them, the lower is the chance | ||
that someone is able to get lucky first and then create another block many times in a row. Chances are rising exponentially with each block. | ||
(assuming that chance to mine a block is equal to one's mining share on global stage) | ||
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Before the transaction is agreed upon by general majority of miners and is approved and permamently written on Blockchain, it needs to be validated. | ||
Transactions are hashed in a Merkle Tree[1], which significantly saves the ammount of previous hashes needed to validate a block. | ||
Inside of bitcoin wallet are no coins, there are tickets to move coins on Blockchain down the chain. Whoever holds a ticket is authorized to pay with | ||
the coins or move them to a another wallet and much more. Transactions are going to be of a great interest to us in this list we will be looking at | ||
mosty Partially Signed Bitcoin Transactions which we will be finalizing under certain cirmcumstances. | ||
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1. "Bitcoin: A Peer-to-Peer Electronic Cash System," Satoshi Nakamoto (https://bitcoin.org/bitcoin.pdf). | ||
2. bitcoinbook, author (https://github.com/bitcoinbook/bitcoinbook/blob/develop/ch01.asciidoc). | ||
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To ignore: keywords: transaction, structure, partially signed, transaction creation, transaction finilazing, signing, writing on Blockchain, transaction fee |
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In Trusted medium we shall trust, to a certain degree. |
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https://medium.datadriveninvestor.com/bitcoin-raw-transaction-breakdown-c0a5a3aa8688 | ||
https://developer.bitcoin.org/reference/transactions.html | ||
https://bitcoin.org/bitcoin.pdf |