hello this guide is helpful and happy new year too
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Topic: A Newbie Breakdown of Bitcoin (Read 735 times)
I'm glad you also enjoyed it. If you have any suggestions as to what you think people would like to learn about please let me know.
This was a very good explanation of various terms, thanks for sharing!
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This was a very good explanation of various terms, thanks for sharing!
hello this guide is helpful and happy new year too
Edit: This is my first post here and I just want to say hello and happy new year.
Peer-To-Peer
A peer-to-peer (P2P) network, in contrast with a centralized network, operates in a decentralized fashion where individual nodes (referred to as peers) both serve and consume resources. Peers share their resources, processing power in the case of bitcoin, and make them directly available to other participants in the network. This precludes the need for a central server to coordinate and manage connections.
Proof-of-Work
A proof-of-work (POW) system helps deter fraud and dishonesty on a network by requiring work from the service requester, processing power in the case of bitcoin. Specifically with bitcoin, an implementation of Hashcash is used. A time-stamp is added to the coin transaction that can only be found using brute force–guessing until correct. Asymmetry of the work means that it is moderately hard for the requester to perform the task but quick and easy for the service provider to check and verify.
Nodes
In terms of computer networks, a node refers to a connection point. In the case of bitcoin, nodes represent computers or servers physically connected to the internet that run current implementations of the bitcoin protocol software. These nodes work together by sending, receiving, and forwarding information to each other in a way agreed upon inherent to the software code behind bitcion. Node is derived from the Latin nodus, meaning knot, and in the case of bitcoin operating a peer-to-peer network, nodes serve to tie together all other nodes into a web or mesh.
Network Operation
The operation of the network is fairly simple. Each new transaction is broadcast to all nodes that then collect them into groups called blocks. Nodes work on performing the proof-of-work for blocks and, when found, broadcast that block to all other nodes. Other nodes only accept new blocks if all transactions contained in it are valid and not previously spent. Acceptance of the block is expressed by other nodes utilizing the block and building further blocks on top of it, adding to the chain of trust. This serves to make it even more difficult to defraud because a dishonest node would need to overcome all other nodes in attempting to propagate the fraudulent transactions.
Incentive For Honesty
Within each block of transactions, the first transaction produces a new coin owned by the node that compiled the block. If the node is able to complete proof-of-work on the block and gain acceptance for it from other nodes, the person or organization claims valid ownership of the newly minted coin. This also serves as a method for distributing coins into circulation without requiring an issuing central authority.
Privacy
Where traditional banking models achieve privacy of some degree by limiting public access to information, the public announcement operation of bitcoin precludes this method. However, privacy can still be achieved by keeping your public key, essentially your account number, anonymous. The general public can see that someone is sending a certain amount of bitcoin to someone else, but without knowing who may be the owner of each account. This is very similar to information released about stock exchanges.
Source: ProBitcoiner.com
Peer-To-Peer
A peer-to-peer (P2P) network, in contrast with a centralized network, operates in a decentralized fashion where individual nodes (referred to as peers) both serve and consume resources. Peers share their resources, processing power in the case of bitcoin, and make them directly available to other participants in the network. This precludes the need for a central server to coordinate and manage connections.
Proof-of-Work
A proof-of-work (POW) system helps deter fraud and dishonesty on a network by requiring work from the service requester, processing power in the case of bitcoin. Specifically with bitcoin, an implementation of Hashcash is used. A time-stamp is added to the coin transaction that can only be found using brute force–guessing until correct. Asymmetry of the work means that it is moderately hard for the requester to perform the task but quick and easy for the service provider to check and verify.
Nodes
In terms of computer networks, a node refers to a connection point. In the case of bitcoin, nodes represent computers or servers physically connected to the internet that run current implementations of the bitcoin protocol software. These nodes work together by sending, receiving, and forwarding information to each other in a way agreed upon inherent to the software code behind bitcion. Node is derived from the Latin nodus, meaning knot, and in the case of bitcoin operating a peer-to-peer network, nodes serve to tie together all other nodes into a web or mesh.
Network Operation
The operation of the network is fairly simple. Each new transaction is broadcast to all nodes that then collect them into groups called blocks. Nodes work on performing the proof-of-work for blocks and, when found, broadcast that block to all other nodes. Other nodes only accept new blocks if all transactions contained in it are valid and not previously spent. Acceptance of the block is expressed by other nodes utilizing the block and building further blocks on top of it, adding to the chain of trust. This serves to make it even more difficult to defraud because a dishonest node would need to overcome all other nodes in attempting to propagate the fraudulent transactions.
Incentive For Honesty
Within each block of transactions, the first transaction produces a new coin owned by the node that compiled the block. If the node is able to complete proof-of-work on the block and gain acceptance for it from other nodes, the person or organization claims valid ownership of the newly minted coin. This also serves as a method for distributing coins into circulation without requiring an issuing central authority.
Privacy
Where traditional banking models achieve privacy of some degree by limiting public access to information, the public announcement operation of bitcoin precludes this method. However, privacy can still be achieved by keeping your public key, essentially your account number, anonymous. The general public can see that someone is sending a certain amount of bitcoin to someone else, but without knowing who may be the owner of each account. This is very similar to information released about stock exchanges.
Source: ProBitcoiner.com
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