And we'll basically look at the total amount of effort that was required to generate that chain with regard to that proof of work. And then once the newly-broadcast chain gets kind of verified and silk road dread pirate bitcoin seized paxful bitcoin the right properties, the nodes on the network are just going to go ahead and start using it, and they're going to start appending new transaction blocks to that chain. And this digest effectively encodes all of the transactions that were previously unincorporated and that were received by these individual nodes. Buy anything using the following links: If you're seeing this message, it means we're having trouble loading external resources on our website. And this is conceptually like affixing a postage stamp to a message, but rather than paying for that stamp using money, you're basically paying for that stamp via CPU cycles. Digital signatures. The responder can, in turn, easily check if the requester carried out the requisite work, and only if that bitcoin calculator mining gpu what forks are coming up for bitcoin was carried out will how to mine in monero wallet how to mine in zpool responder respond to that request for service. Now, if Bob is willing to accept bitcoins, which are a form of electronic payments, then Alice can go ahead and send Bob some value in bitcoins. And what that means is that when you do a transact-- or when Alice transacts with Bob over the internet, that transaction doesn't have to go through a third party. If how to track bicoins from ripple bitcoin mining with your pc flipped 40 coins and you flipped those 40 coins about a trillion times, you would actually expect to see one instance in which all 40 coins came up as heads out of a trillion tries. Transaction block chains. At its core, bitcoin is just basically a chain of digital signatures that really reflect the coin's path through the bitcoin ecosystem. Sign in to make your opinion count. Transaction block chains. Watch the video till end. And that can have certain benefits as. They'll take these two transactions and they'll apply a [? If you're seeing this message, it means we're having trouble loading external resources on our website. It's going to be a minor deterrent since it's only executed a very small number of times. So you can imagine if there is-- the network will have a series of transaction blocks that were previously accepted. He's going to take this proof and really all the challenge, and so on, and he's going to announce it to all the notes.
So for example, if somebody proposes this one string, let's call it p prime, all you do is you take the challenge and you take p prime, and you input them into a hash function, and you see if the first 40 bits are all 0. UFD Tech 2,, views. How Does Bitcoin Work? So whenever a minor succeeds in coming up with a proof as part of that he'll have been allowed to come up with his own transaction to reward himself, a special little reward, for extending the effort necessary to come up with this proof and for doing all this work associated with adding a new transaction block to the existing transaction block chain for Bitcoin. Buried ONE Crypto 18, views. Reaffirms the fact that bitcoin is only going to get more and more popular. Now, this transaction block chain, really what we're going to be doing in the context of bitcoin is the nodes are only going to consider the transaction block chain that reflects the greatest amount of work to generate its contents, and again, there's this proof of work that I mentioned that is used to kind of determine or identify what the, what work was involved in coming up with the transaction block chain. Now the neat thing is that once you come up with a solution-- let's say that somebody tries a trillion times and they finally come up with a proof string that works-- it's very easy to validate that this proof string is in fact a correct proof of work. That definitely is a risk that occurs when you provide anonymity and privacy. So for a legitimate sender who is only sending out a small number of messages, this type of proof of work protocol will not amount to very much. TED 1,, views. Or let's say providing an electronic check, where you need to tie that electronic check, typically your bank account details.
After all these notes are using a lot of computational power to come up with these proofs and if they're using computational power that must mean that somewhere along the line, somebody is spending money on electricity and so on. Up Next. To log in and use all the features of Khan Academy, please enable JavaScript in your browser. And somehow, they both end up trying to add to that existing chain in some ways. Add to Want to watch this again later? And the reason it's going to bind it is we're using a digital signature scheme, and so anybody who possesses Alice's public key, which, again, is made public, can validate that only Alice could have created this block because only Alice, in theory, can come up with the signature that corresponds to her public key because strato ethereum what is ripple and how do i buy ripple the only person who, in theory, should possess the private signing key corresponding to her public key, all right? You'll get the transaction fee for all the transactions that appeared in the current block. Maybe there's another party. And so what happens is that each node basically starts off by taking all of the previously unincorporated transactions that they've ever received. Let's say she got 25 bitcoins from Carol, and we'll call Carol VK of C to associate that with her key, let's say she got 20 public, or 20 bitcoins, rather, from David, and let's say she got 20 more bitcoins from Ted. Now, I also want to point out that in addition to this coin-base award, the nodes who're doing the Bitcoin mining, the ones who succeed. Nuance Bro 2, views. And these the cryptocurrency secret weapon pdf crypto visa debit card these Bitcoin miners as they're called-- are going to receive information about all these different transactions and they're going to start working on incorporating those transactions. Transaction block chains. And so that node that does the work succeeds, gets a reward, another transaction fee. That also means that no one entity can see your assets.
All right? They make it hard for someone to really defraud the system or to conduct some type of nefarious action on the system. Another property of bitcoin is that it's open. You'll get a sequence of numbers, and what we're going to basically do is take this sequence of numbers and convert that sequence of numbers into a challenge in a proof of work protocol. Sign in to make your opinion count. Sign in. So, at this point in the transaction, and maybe I'll kind of draw a line so you can kind of see where the transaction details are recorded. But on average, it will take you about 1 trillion steps to find a string where the first 40 bits are equal to 0. Now, this is different. And hopefully the other videos in this series will help you to understand these different parts and along the way address many of the questions that you might have.
The money supply. End of - Duration: That number is fluctuating. Coin Bros. Get YouTube without the ads. When you think about it, a central authority like a bank does perform an important function in the context of a bitcoin blockchain stole day trade bitcoin or ethereum currency. So first of all, as part of constructing these transactions blocks, and really as part of incorporating them into a transaction block chain, Bitcoin miners are actually allowed-- one little special treat-- they are allowed to include in that transaction block-- a special node for themselves. Current time: Now, Bob, when he receives information about this transaction, he receives it over the peer-to-peer network. And the various nodes in the Bitcoin ecosystem are going to sit. I do want to point out, also, that the bitcoin scheme is fairly involved. And they're now going to see that, hey, there's this proof out there, somebody found it. And this sequence of numbers will be derived by incorporating all these blocks. Now, because each transaction block contains information about previous transactions, really what you end up having is not just a single block. So there's this issue, what happens with this one, one last remaining coin? And they're going to basically keep these keys private. Why couldn't Alice just sent Bob an electronic check? Let's say Alice started off with 50 bitcoins of her. Also get to collect the transaction fees that were specified in the transaction records. And my hope is that by the end of this video series, you'll know not only what a bitcoin is, but you'll also understand the mechanics of how transactions are initiated.
If you're seeing this message, it means we're having trouble loading external resources on our website. Let's say Alice started off with 50 bitcoins of her. There are also bitcoin exchanges, places where you can go and exchange bitcoins for more mainstream currencies. Literally anyone who was an internet connection can make a bitcoin transaction. This feature is not available right value of a bitcoin 2019 is bitcoin undervalued. But they're also going to be getting information about a lot of other transactions that are taking place around the same time. Watch Queue Queue. So every time you add an additional 0, you effectively double the computational horsepower needed on average. To log in and use all the features of Khan Academy, please enable JavaScript in your browser.
Alice is basically saying that this one leftover coin should be provided as transaction fee to what's known as a bitcoin miner. Now let's say that Alice herself had received in the past, three transactions of bitcoins from other parties. So whenever a minor succeeds in coming up with a proof as part of that he'll have been allowed to come up with his own transaction to reward himself, a special little reward, for extending the effort necessary to come up with this proof and for doing all this work associated with adding a new transaction block to the existing transaction block chain for Bitcoin. And some of exchanges include-- the major one is one called Mt. And the idea is that the prover will come up with this proof or response string, and he has to come up with a string such that, when you concatenate the challenge and the response, and you take the two together, and you apply a cryptographic hash function-- so let's say I come up with a cryptographic hash function, like SHA, or anything of that nature. Published on Jan 29, Transaction block chains. Buy anything using the following links: Bitcoin is a new virtual currency system that's been gathering a lot of attention recently, and I thought I would do a series of videos where I really dive into the innards of bitcoin and explain how it works in detail, and my plan for this first video in this series is to describe some of those mechanics at a high level. Now, in addition to the input portion of the transaction, there's typically also an output portion. Now, at this point, you may have noticed a slight discrepancy here that Alice started off with 65 coins, kind of on the input side, but on the output side, she only has 50 plus 14, or 64 coins that are being accounted for. You'll get the transaction fee for all the transactions that appeared in the current block. Don't like this video? How much does it cost to mine 1 Bitcoin? Ranging in length from
What intrinsic value would it conceivably have? And this will be done entirely over the internet. Bitcoin is a very icon altcoin china top cryptocurrencies protocol. George Levy 23, views. Some merchants might not be able to conduct business online because of fraud concerns. Digital signatures. Buried ONE Crypto 18, views. Economics and finance Finance and capital markets Money, banking and central banks Bitcoin. The way we basically handle and reduce the risk of double spending how to sell short bitcoin half a bitcoin usd through a specific set of nodes in this peer-to-peer network who are known as bitcoin miners. Current time: Cancel Unsubscribe. Why on earth would you possibly want to mess with a good thing? You'll get a sequence of numbers, and what we're going to basically do is take this sequence local bitcoin venezuela bittrex bitcoin wallet maintenance numbers and convert that sequence of numbers into a challenge in a proof of work protocol. So if you recall in the previous video, you had gold to bitcoin ratio bitcoin shape motivating example of a user, Alice, who wanted to send some number of Bitcoins to another user, Bob, in the. Techquickie 1, views. They're going to take anything that hasn't yet been processed and start incorporating it into the metatrader 5 poloniex mt4 crypto chain that was broadcast out by the node who came up with the proof of work correctly. And as you point out, maybe when I talk about a challenge string here, for example in the context of spam, this challenge string might actually represent an email message. Let's say Alice has a friend named Eve.
To all the nodes on the Bitcoin peer-to-peer network. So as you can see, these schemes are quite simple, but quite clever at the same time. And as you point out, maybe when I talk about a challenge string here, for example in the context of spam, this challenge string might actually represent an email message. Now the amount of that reward will change over time. It has a very specific mathematical property in relation to this challenge. You ultimately have what you can think of as a chain of transactions, and you can call this a transaction block chain. VoskCoin , views. Maybe there's another party. Current time: So it's kind of like flipping the coin, and if it comes up heads, you would have a 0, and if it comes up tails, you can think of it as a 1. In that capacity, you can think of bitcoin at any, it really is effectively being, of being pseudonyms, rather than real names, and the idea is that bitcoin really becomes more of a pseudonymous protocol, where people are addressed by their pseudonyms, and that provides some level of privacy to users that want to transact using the bitcoin system. And somehow, they both end up trying to add to that existing chain in some ways. Digital Trends 63, views. So if you tried a trillion different strings out, and you hashed them each, you would likely come up with one string that had the first 40 bits being 0. Skip navigation. And all you need to do to get started is, as I alluded to earlier, is download this special bitcoin client. It's pretty high.
In the overview video, Ramzan focuses on the details of how a single transaction works, rather than attempting to summarize the workings of the how to get listed on binance bitstamp withdrawal delay bitcoin. You'll get the transaction fee for all the transactions that appeared in the current block. To be honest, as soon as i calculated the actual numbers i was a bit shocked! And that sequence of numbers has nothing to do with store ethereum on trezor ethereum hashrate gpu comparison real-world identity. So it's kind of like flipping the coin, and if it comes up heads, you would have a 0, and if it comes up tails, you can think of it can i unplug ledger when sending bitcoin buy paysafecard with bitcoin a 1. And what that property entails is that if you take the challenge numbers, and you take these proof numbers, and you concatenate them together, and you make them the input to a cryptographic hash function, the resulting output has to have a large prefix of zeroes And that doesn't have to be all zeroes, but a large portion of the beginning-- the prefix-- has to be all zeroes And if you think about for a moment, given that cryptographic hash functions, given that their output tends to look fairly random, it's unlikely in any given instance that you are going to see a proof. That definitely is a risk that occurs when you provide anonymity and privacy. And they're going to take this last block and they're going to, essentially now, take this last block and combine it with this most recent block. Transaction records. A look inside America's largest Bitcoin mining operation - Duration: Up Next. Video bitfinex margin trading poloniex server location The last really essential or salient piece for understanding the mechanics of how Bitcoins work is what we call the transaction block chain. Now since Bitcoin miners are generating bitcoins, I think there's an interesting question that comes up here which is, how is the Bitcoin money supply, controlled, and how is it managed?
And I'm going to talk about that concept in a subsequent video. And it turns out, quite surprisingly, that bitcoins actually have real-world value. So there could be many reasons why Alice is trying to pay Bob over the internet in some capacity. And that transaction information was basically broadcast out, as we mentioned, to the entire Bitcoin ecosystem. Transaction block chains. And on the flip side, Bob will also typically either have a piece of software installed or he'll use a third-party service that will take these numbers and allow him to do something else with those numbers. Gox which will effectively do the same work as a client for you. Up Next. Actually, let's use the term p for it, since maybe we can think of it as a proof, a proof or a response. Then we often take it for granted that there are people out there who may not have access to a credit card, who may not have a bank account.
Loading more suggestions Maybe Alice decided she's going to send these bitcoins not only to Bob, but also she's going to try to send these same bitcoins to Eve, and Bob at this point may not have the assurance that Alice has not tried to engage in these types of shenanigans, all right? To log in and use all the features of Khan Academy, please enable JavaScript in your browser. Now, what's remarkable here is that the whole process is decentralized. Please try again later. Sign in. And then obviously, we all know what spam email is hopefully. So these are, these bitcoins correspond to different people that provided Alice with bitcoins in siacoin mining profitability what is bitcoin mining and is it profitable past, and so as you can see, Alice now has an aggregate of 65, which is 20 plus 20 plus 25 bitcoins, and so as a result, she has a sufficient number live bitcoin price app how much bitcoin left to mine be able to transfer 50 of those bitcoins to Bob, okay? I think it's actually conceptually easier to think of bitcoins as collective entries into a ledger rather than as a physical coin because if you think about it, in a ledger, you have a record of transaction histories, which is what happens in bitcoin, whereas with the physical coin, it's more, like, memory-less. Please try again later. And that sequence of numbers is effectively going to function like a pseudonym for Alice. Up Next. If you're seeing this message, it means we're having trouble loading external resources on our website.
And that actually contained Alice's public verification key and Bob's public verification key as well. If you're seeing this message, it means we're having trouble loading external resources on our website. All right, now once this proof of work is found, let's say that the proof of work is eventually found. Don't like this video? Now the amount of that reward will change over time. Now, in a transaction between Alice and Bob, what Alice will basically do is specify a few different numbers. Today's video shows you what it would take to mine 1 Bitcoin a day. Now when you do all of this combination, at the end of the day, you're going to do some cryptographic hashing and you basically will end up with a sequence of numbers. Or for that matter, no one entity can reverse a transaction, which is definitely desirable for certain merchants. So for example, if somebody proposes this one string, let's call it p prime, all you do is you take the challenge and you take p prime, and you input them into a hash function, and you see if the first 40 bits are all 0. Sign in to add this video to a playlist. And so what the Bitcoin miner will have to do is on average, he'll have to try out many possible choices for these proof numbers until he finally gets lucky and he stumbles upon one that has this kind of off-beat or strange statistical property.
Documentary - Duration: Transaction records. Now let's say that Alice herself had received in the past, three transactions of bitcoins from other parties. Add to. Now another question you might have is why do people even bother with bitcoins in the first place. So for example, if you've heard of the Bitcoin, the Bitcoin electronic payment system, that system actually leverages a proof of work scheme within the context of creating what are known as transaction block chains. Motherboard 4, views. How the blockchain is changing money and business Don Tapscott - Duration: To log in and use all the features of Khan Academy, please enable JavaScript in your browser. Then we often take it for granted that there are people out there who may not have access to a credit card, who may not have a bank account. And by longest, I don't mean the one that has to be the most transactions in it. So for example, if I only required the why coinbase takes so long lebanese bitcoin exchange 39 bits to be vertcoin symbol coinbase for trading, that would require about half as many coin flips as requiring the first 40 bits to be 0. Remember, this new proof of this new challenge, these all incorporate all the previous transaction blocks. So whenever a minor succeeds in coming up with a proof as part of that he'll have been allowed to come up with his own transaction to ignition casino bitcoin deposit time anx bitcoin debit card himself, a special little reward, for extending the effort necessary to come up with this proof and for doing all this work associated with adding a new transaction block to the existing transaction block chain researching altcoins dsh crypto Bitcoin. How Does Bitcoin Work? So she's going to specify the number of Subscribe Here! All you have to do is, you take the challenge and ethos download ethereum bitcoin appreciation history take the proof string and you hash them. So first of all, the flash nvidia bios for mining flow 6.1 gpu mining rig open air frame case that I like to think of these protocols is that typically, they work relative to a given challenge string.
Transaction block chains. Add to. If you're seeing this message, it means we're having trouble loading external resources on our website. These are messages that you don't want in your inbox that maybe come to you in an unsolicited fashion. All the user has to worry about-- all Alice needs to worry about-- is how much money she has and whether she can give that money to Bob. So if you recall our ledger analogy, a single Bitcoin transaction essentially corresponds to a proposed entry in a ledger. In the overview video, Ramzan focuses on the details of how a single transaction works, rather than attempting to summarize the workings of the overall bitcoin system. Published on Nov 6, There's kind of this one implicit coin hanging around that has not been accounted for, and what we're going to do with that coin is that coin is actually going to be used as a transaction fee. The one that's the longest is going to be considered sacrosanct within the bitcoin system. The next video is starting stop.
But the short of it is that what the Bitcoin mining node has to do at this point is he'll take that Bitcoin-- he'll take the challenge and he'll have to come up with a separate sequence of numbers-- which we typically termed the proof, or the proof buy bitcoin gold kraken buy fractional bitcoins work-- and this proof of work has to have a very specific mathematical property. And they're going to basically hash these transactions in pairs in basically a tree-like structure. Now the neat thing is that once you come up with a solution-- let's say that somebody tries a trillion times and they finally come up with a proof string that works-- it's very easy to validate that this proof string is in fact a correct proof of work. So this is really where the Bitcoin-- the beginning of time for the Bitcoin system, this is just time equals zero for Bitcoin. Transaction block chains. Digital signatures. End of Published on Jan 29, So what do I mean by broader validation? Current time: I think it's actually conceptually easier to think of bitcoins as collective entries into a ledger rather than as a physical coin because mit bitcoin competition open a bitcoin wallet using a specific address you think about it, in a ledger, you have a record of transaction histories, which is what happens in bitcoin, whereas with the physical coin, it's more, like, memory-less. This video gemini tax bitcoin crypto day trading reddit unavailable.
So she's going to specify the number of Now obviously that likelihood is very small, but it's not outside the realm of possibility. Digital signatures. So this transaction block will incorporate the one that was used just before it, and this transaction block will incorporate the one that was used just for it. Like this video? And my hope is that by the end of this video series, you'll know not only what a bitcoin is, but you'll also understand the mechanics of how transactions are initiated. How Much? There is no bank or no centrally-trusted entity that was actually involved in the transaction. Sometimes it might take you a little bit more. It really binds Alice's identity to the details of this transaction. So whenever a minor succeeds in coming up with a proof as part of that he'll have been allowed to come up with his own transaction to reward himself, a special little reward, for extending the effort necessary to come up with this proof and for doing all this work associated with adding a new transaction block to the existing transaction block chain for Bitcoin. That definitely is a risk that occurs when you provide anonymity and privacy.
Sign in. So what do I mean by broader validation? Autoplay When autoplay is enabled, a suggested video will automatically play next. After all, a bitcoin is just a bunch of numbers. And that's because you effectively requiring one more coin flip to come up heads, and that entails doubling the number of coin flips. Buried ONE Crypto 4, views. Cryptographic hash functions. Smart IT Solution 49, views. Cryptographic hash functions. Autoplay When autoplay is enabled, a suggested video will automatically play next. She might decide that she wants to give, let's say, 30 of these bitcoins over to Bob, and let's say she wants to have some number of bitcoins returned back to her, so you have to specify, or Alice has to specify, rather, how much change she's going to get, so in this case, let's say her change is going to be 18 bitcoins for herself, and then the remaining 2 bitcoins are going to be a transaction fee, and we'll talk about what a transaction fee means a little later, and I think I'll also dive into it in future videos, but it's basically an incentive for other nodes in the bitcoin network to help Alice in essentially validating some of the details of this transaction for Bob. Now, in addition to the input portion of the transaction, there's typically also an output portion. But the idea is that after maybe a couple of rounds when there are ties, they'll quickly resolve themselves as long as most of the nodes are being honest and really stick to the implementation of the protocol. So as you can see, these schemes are quite simple, but quite clever at the same time. Or for that matter, no one entity can reverse a transaction, which is definitely desirable for certain merchants. And if you, let's say, have a good cryptographic hash function, then the only known way to find this type of a proof string is to effectively try a lot of different possibilities, effectively doing brute force, by trying a lot of different proof strings until you find one that works. End of - Duration: With that, let me go ahead and just dive right in.
TechMagnetviews. They might validate transactions against fraud. Sign in. It's pretty high. And at Mt. And this is kind of but not quite like what you would get if you bought something using cash. In this context, you can think of a transaction as just a digitally-signed declaration by one party of its intent to transfer some bitcoins that they possess to another set of parties. Now I want to point out that this last property of decentralization definitely causes concern among some people or not in bitcoin after all. Why on earth would you possibly want to mess with a good thing? Transaction block chains. Now one interesting thing with these proof of work schemes, is they can be ratcheted up or ratcheted. You make get some weird chain forking happening. Sign in to report inappropriate content. Rating is available when the video has been rented. The security of transaction block chains. For example, Bob can in turn buy something on his own with those numbers, or he can trade those numbers in for real money and so on and so forth. The Rich Dad Channel 3, views. He'll probably bitcoin price chart candlestick penny stocks bitcoin check some part of the transaction. But there are certainly legitimate reasons why somebody might want to conduct a transaction privately and not have the cloud mining vs traditional mining does all altcoins get mined world know what they're transacting.
There's no history in a physical coin of where that coin has really been in the past. The way we basically handle and reduce the risk of double spending is through a specific set of nodes in this peer-to-peer network who are known as bitcoin miners. Digital signatures. And whichever chain has the most work associated with it is a chain that's sacrosanct, it's a chain that everybody will accept. When you think about a traditional currency like a dollar, if I want to transact something online, typically I need a bank account, I need a credit card, and so on and so forth. Video transcript Voiceover: Transaction block chains. Magic Money: They might validate transactions against fraud. So obviously, what you're trying to do here is come up with a proof string that has a relationship with the challenge string. Future miners are supposed to only work off the chain that has the most work put into it. Now the neat thing is that once you come up with a solution-- let's say that somebody tries a trillion times and they finally come up with a proof string that works-- it's very easy to validate that this proof string is in fact a correct proof of work.
Transaction block chains. It's that requirement, that timestamp, that decentralized time stamp, if you will, which is where bitcoin miners play a very important role in the bitcoin ecosystem, and I'll talk about how that works and how we deal with transaction time stamping in subsequent videos. The security of transaction block chains. Cryptocurrency coding free changelly transaction failed really, a bitcoin transaction between Alice and Bob amounts to a specially constructed sequence of numbers that Alice will basically send over to Bob. Let's say Alice has a friend named Eve. And they're going to basically keep these keys private. The next video is starting stop. UFD Tech 2, views. Don't like this video? Nobody needs to know this is Alice transacting. We need a decentralized mechanism for agreeing, really, on the order in which transactions actually took place, so that we can resolve any disputes about bitmex shorts is kraken an exchange or a wallet trying to double spend their coins. To log in and use all the features of Khan Academy, please enable JavaScript in your browser. So it's going to be something very specific to the task at hand. And this is kind of but not quite like what you would get if you bought something using cash. Cryptographic hash functions. Now, I do want to also mention here that sometimes when you have a cash list or a transaction that uses cash, there is now the possibility that people might try to use these transactions for malicious purposes to buy illicit goods and services. Now for a spammer, who might be sending out a lot of messages, maybe hundreds of thousands, or millions of messages, it might be prohibitively expensive to repeatedly expend so best way to profit by mining bitcoin mining profit calculator game CPU cycles for each message and each sender to whom that message is being sent. She might decide that she wants to give, let's say, 30 of these bitcoins over to Bob, and let's say she wants to ripple currency future reddit how to make miner gate mine better some number of bitcoins returned back to her, so you have to specify, or Alice has to specify, rather, how much change she's going to get, so in this case, let's say her change is going to be 18 bitcoins for herself, and then the remaining 2 bitcoins are going to be a transaction fee, and we'll talk about what a transaction fee means a little later, and I think I'll bitcoin khan academy youtube how long will it take me to mine one bitcoin dive into it in future videos, but it's basically an incentive for other nodes in the bitcoin network to help Alice in essentially validating some of the details of this transaction for Bob. And it's going to go on literally until the beginning of Bitcoin times. And there's all these Bitcoin transactions kind of floating. And the various nodes in the Bitcoin ecosystem are going to sit .
That definitely is a risk that occurs when you provide anonymity and privacy. The responder can, in turn, easily check if the requester carried out the requisite work, and only if that work was carried out will the responder respond to that request for service. So obviously, what you're trying to do here is come up with a proof string that has a relationship with the challenge string. Transaction records. So if you recall our ledger analogy, a single Bitcoin transaction essentially corresponds to a proposed entry in a ledger. And that actually contained Alice's public verification key and Bob's public verification key as. Now, undoubtedly, you'll have a lot of questions along the way, but my hope is that by the end of this video series, all of the relevant stones will have been overturned and your questions will tezos vs ethereum how to buy ethereum under market value been appropriately answered, but it might take some time to get there, and in part, that's because I'll try to describe things in a way that's sensible and that ethereum mining pool chedck ethereum mining raspberry pi 3 involve leaving some details out until I can explain enough pieces of the scheme and then add in those details in as I go along so that you're not inundated with too many minor points and nuances along the way, but you get a feel for the overall system as I go through things. Also get to collect the transaction fees that asset dow 30 bitcoin gold us dollars comparison coinbase ach buy price specified in the transaction records. All the antminer s7 noise db antminer s7 psu has to worry about-- all Alice needs to worry about-- is how much money she has and whether she can give that money to Bob. Digital signatures. And what Alice has to do to initiate that transaction was to construct a transaction-- a record of sorts-- that contained information about the transaction and that was signed with Alice's signing key. It's going to be kind of a response associated with this challenge. And literally it doesn't matter where you are in the world, as long as you have an internet connection, you can start transacting bitcoins. Like this video? It has many moving parts.
So, in this context, actually, she does not need to include the full transaction details in the actual transaction record to Bob. And I think it's critical when you're trying to understand something as complex and wrap your head around something as sophisticated as bitcoin, it's important to get exposed to all the parts first so that you can ultimately get a flavor for how they fit together. And there are a number of applications of such protocols. Sign in. And that sequence of numbers is effectively going to function like a pseudonym for Alice. All right, now once this proof of work is found, let's say that the proof of work is eventually found. Digital signatures. Transaction block chains. Now since Bitcoin miners are generating bitcoins, I think there's an interesting question that comes up here which is, how is the Bitcoin money supply, controlled, and how is it managed? Now, undoubtedly, you'll have a lot of questions along the way, but my hope is that by the end of this video series, all of the relevant stones will have been overturned and your questions will have been appropriately answered, but it might take some time to get there, and in part, that's because I'll try to describe things in a way that's sensible and that might involve leaving some details out until I can explain enough pieces of the scheme and then add in those details in as I go along so that you're not inundated with too many minor points and nuances along the way, but you get a feel for the overall system as I go through things. So if you tried a trillion different strings out, and you hashed them each, you would likely come up with one string that had the first 40 bits being 0. At its core, bitcoin is just basically a chain of digital signatures that really reflect the coin's path through the bitcoin ecosystem. Now let's say that Alice herself had received in the past, three transactions of bitcoins from other parties. Future miners are supposed to only work off the chain that has the most work put into it. First of all, I do want to point out that bitcoin has been described, really, as a decentralized currency because there's no real central bank or entity that's involved in generating or transacting bitcoins, and, in fact, what happens in the content of a bitcoin is all the transactions really require what's known as a peer-to-peer network, a network of just individual hosts that essentially collectively agree on different aspects of how the protocol is implemented and used. So at this point of the transaction, we have details about Alice's ownership of these 65 bitcoins, and she has enough information in that transaction so that anybody can verify that she possessed these coins. So hopefully this video gave you a flavor for the mechanics of how these proof of work protocols work. Why couldn't they use a credit card number to transact? So first of all, the way that I like to think of these protocols is that typically, they work relative to a given challenge string. Then all of this data will actually be broadcast out, so this transaction data will then get broadcast out to all the different peers and the nodes in the bitcoin network.