Understand Bitcoin

Understand Bitcoin

It is often said that Bitcoin is everything you don't understand about money combined with everything you don't understand about computers. There's nothing to relate it to, as Satoshi remarked

Bitcoin is different things to different people. Not only that, but what we mean when we say "bitcoin" depends on context, among other things

https://preview.redd.it/9y1zfmu39zx81.jpg?width=1920&format=pjpg&auto=webp&s=4c471e2b19f19add36d6ee81ca9e199c3a992cf0

Breaking apart this loop is what 21 Ways is about. However, it's almost impossible to talk about Bitcoin in any meaningful way without a brief discussion of the building blocks that make Bitcoin work.

First of all, understanding how public-key cryptography and digital signatures work is absolutely essential. While Bitcoin seems magical, its nuts and bolts are anything but. Key generation, message signing, and message verification are mathematical operations

https://preview.redd.it/pvsxmqly9zx81.jpg?width=1920&format=pjpg&auto=webp&s=860631ea5e5c18a8b8fa6bda1b26ebc909de2c9a

https://preview.redd.it/b8a7ih10azx81.jpg?width=1920&format=pjpg&auto=webp&s=90dde9b33f2aa5fa7ee0d77a59c77a2bd4f5b021

Hash functions are another essential building block. They are crucial to identify and verify information in a decentralized system. In Bitcoin, they are used for mining, generating addresses, identifying redeem scripts, identifying transactions, blocks, and more.

https://preview.redd.it/blw6we88azx81.jpg?width=1920&format=pjpg&auto=webp&s=8b378e2e5577dc2f06d16dfcaf3c8b9fbc3822b6

https://preview.redd.it/uz18vrj9azx81.jpg?width=1920&format=pjpg&auto=webp&s=a4c0640010c73eb5e1231d7e00997c19bb9cfb49

The problem with regular computer networks is a political one. Traditional computer networks usually follow the client-server model, which puts one server in charge as the central authority of the network. The solution? Make everyone an equal participant by design: peer-to-peer.

https://preview.redd.it/ww0xdo6iazx81.jpg?width=1920&format=pjpg&auto=webp&s=2d6f8a0bdd68aba04c15fd94a186be185c736031

https://preview.redd.it/kqx571yjazx81.jpg?width=1920&format=pjpg&auto=webp&s=794cd22bef7273fc489dfc1b7265881ac1757b2f

Once these building blocks and Bitcoin's operation are properly understood, it becomes clear that this often-used picture is an oversimplification, to put it mildly.

https://preview.redd.it/h4bo182oazx81.jpg?width=1920&format=pjpg&auto=webp&s=8e0e059f53fdc05ef111672e6f6e0b811792be1c

A more accurate picture would be the following: sats are in locked vaults floating in the sky. If you know the magic spell, you can open your lock and create new vaults that you can seal with someone else's lock. Sats do not exist outside of vaults.

https://preview.redd.it/pjrasdatazx81.jpg?width=1920&format=pjpg&auto=webp&s=11eecb92e3aa8e82006efb4949900422ff5bcc0a

Confusing? No doubt. But it gets easier as you study and get comfortable with these concepts. In the end, Bitcoin is a network that is incredibly hard to corrupt and keeps everyone and everything honest—producing a truthful ledger, recording who owes what to whom

https://preview.redd.it/2yuyy2frbzx81.jpg?width=1920&format=pjpg&auto=webp&s=4acffd793a844727d97a12c1006cc943b350ad6d

All The credit should go to : u/dergigi

Link To his twitter : https://twitter.com/dergigi

submitted by /u/Reahvenz
[link] [comments]

Leave a Reply

Your email address will not be published. Required fields are marked *