Topic: Bitcoin newby questions (Read 272 times)

I'm not sure. I ran his post through several AI detectors, but the results are inconclusive. It could be anywhere on the spectrum, from entirely AI-generated content to completely human-written text.  Since he's a new member with no other posts, I think it's fair to give him the benefit of the doubt for now.

Miners choose transactions that pays high transaction fee and that's how they select or choose transactions to include in their blocks to mine.

If it's really generated by AI then it will be deleted if it's proven to be generated by AI. There are some program like an AI detector that doesn't detect well or not 100% accurate. I know why you think that way because op is 78 years old if it's real and even my father didn't even know how to use mobile devices how much if my father would also become a forum member like asking the same question or similar question with op.

This example is not quite right to my knowledge.

Let's assume your wallet is empty. Two people send you 0.5BTC each. Now you have two UTXO, each 0.5BTC or 50,000,000sat, in your wallet, a sum of 1BTC.

Now you want to send a transaction which transfers 0.7BTC to someone else (to make it easy, we assume zero transaction fee here). Your wallet takes your two UTXO as inputs (a sum of 1BTC) and creates two outputs, (1) 0.7BTC for the recipient of your transaction and (2) 0.3BTC as change back into your own wallet.
It's not economical to send 0.5BTC + 0.2BTC in two separate outputs to the recipient as @thecodebear explained it and to my knowledge no wallet would do it that way unless you force the wallet to do so by specifying explicitly two separate outputs for the recipient.
After this transfer your wallet contains one single UTXO of 0.3BTC, the recipient has an UTXO of 0.7BTC in his wallet.

Think of a transaction as a mint melting crucible. You throw in your inputs as "coins", you melt all inputs and you cast new output "coins" of desired "size" from the molten inputs (obviously you can't cast more than is available as molten source "material"). You usually keep one change output "coin" yourself, the other output coin(s) are handed over to recipients control.

The rule is: sum of inputs equals transaction fee plus sum of outputs.

To picture this with my melting crucible example: all inputs compose the molten sum available to cast new outputs, new output coins are cast and some (hopefully little) amount of molten stuff is kept sticking in the crucible. The miner keeps the little sticky bits (aka transaction fee) in the crucible for his heating (the Proof of Heat Work) of a lot of crucibles (all transactions) in a melting session (the block creation). Not a perfect analogy but I hope you get the picture.

There are protocols that guides the whole thing happening in the entire bitcoin network, you could also discover that the blockchain is an open distributed ledger, what is happening there could be publicly seen and every nodes and interconnected to which other in such a way that validate for transactions and anyone that does not go inline with the protocol is being rejected, miners got their bitcoin reward after solving a complete arithmetic equations and the first to complete this task receive the reward in bitcoin. you can read better on these.

First time/Small miner reference for getting started. 
https://bitcointalksearch.org/topic/first-timesmall-miner-reference-for-getting-started-4636521

Mining difficulty and BTC mined Question
https://bitcointalksearch.org/topic/mining-difficulty-and-btc-mined-question-5454124


The first miner to confirm the validation on each new block receives the reward

@FatFork what about Op content and his/her content also ai generate or I am wrong


https://hivemoderation.com/ai-generated-content-detection


https://sapling.ai/ai-content-detector

@Rustam Meraj, if you don't want your posts deleted and your account tagged for spamming, please stop using AI to generate your posts and put some effort into your content!  Contribute something original or interesting, otherwise... Well, you know the drill.


https://sapling.ai/ai-content-detector/77306afcb74e994b4f9a70be1b1e825b

As a fellow Bitcoin owner I can understand the confusion and curiosity that comes with navigating this complex technology especially at an older age. It's commendable that you are taking the initiative to educate yourself and understand the ins and outs of Bitcoin mining and transactions. It's important to continue learning and exploring the world of Bitcoin as it is a constantly evolving and innovative space. Don't be discouraged by the complexity of the technology as with time and effort you will gain a better understanding and appreciation for the potential of Bitcoin. Keep up the good work and happy exploring!

As a relatively new Bitcoin owner, it's natural to have questions about this complex technology, especially at 78 years old. The process of mining involves using high computing power to validate transactions and secure the network. Essentially, miners compete to solve complex mathematical puzzles, and the first to do so validates the transaction and receives the reward. Transactions are distributed among miners, and it's indeed a race to validate them. As for splitting Bitcoin, it's not physically split but can be divided into smaller units. Understanding these concepts is crucial, and it's great that you're seeking to grasp them. Keep learning and exploring the world of Bitcoin!

I tend to end up writing a "wall of text" when Im responding to someone that has either asked several questions in a single post, or made several incorrect or misleading statements in a single post (or both). I typically try to address each point individually.

It was lost in my "wall of text". Thats ok. It's an important fact, and worthwhile to repeat it.

See here:

And here:

I'm not nearly as old as the OP^[1] and I hope he likes reading.  

Good answers here so far and it's actually quite a challenge to answer OP's questions because they cover a lot of technology and design principles of Bitcoin. Not an easy task, hence why it's a wall of text sometimes (no judgement).

To grasp concept and details of Bitcoin, I like very much to use https://learnmeabitcoin.com a lot. You can get quickly an overview of things and you can deep dive into the technical parts if you're curious and want to. The interactive parts of the site are nice, too.
It's much easier to digest than, say, Mastering Bitcoin in my opinion. If you can, work with both. I stopped counting how often I read parts of "Mastering Bitcoin" and visited learnmeabitcoin.com. Things fade out of memory, it's natural.

I would like to add another detail to mining that might not have been said here (apologies if I overlooked it):
Mining a valid block hash that fulfills required Proof of Work difficulty is a totally random process. On average a miner has to execute a difficulty dependant computable number of tries to find a valid blockheader hash which depends on current agreed difficulty by protocol.

Difficulty is adjusted on average about every two weeks (every 2016 blocks) such that the required number of hashings takes the whole miner network on average 10 minutes to mine a valid blockheader hash and thus append a new block to the blockchain. The more hash power a miner has the more likely he can find a valid blockheader hash. The more hashes you can compute per time interval the more often you have the random chance to find a certain blockheader which gives you a valid hash.

But this is statistics, in reality the miner can be very lucky and only need a fraction of needed hashing attempts or is unlucky and won't find anything even after exceeding way more than would be statistically needed.

This is the beauty of Bitcoin's Proof of Work: the double SHA-256 hashing gives you solely a random chance to hit "jackpot". You can't bypass the work, it's fair to everyone in this respect.

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[1] Definition of some short Abbreviations used on forum. Everyone should know;

You already have 2 great answers from thecodebear and odolvlobo, so a lot of what I say may repeat some of what they've already said.  Also, since this is in the "Beginners & Help" section of the forum you'll want to keep in mind that the actual technical details might be a lot different than how you might assume it works from things you've read and heard, and probably even a bit different than the level of detail that's provided in this thread.

Welcome! There's a lot of great information available on this forum, and some very knowledgable and experienced people that are all willing to help you understand anything that confuses you. Note, you'll also find a LOT of misinformation, deceit, and outright lies here as well. Be careful, and don't always trust something you're told. Misinformation does tend to be called out when it shows up in public threads, so if you're unsure wait and see who confirms or denies what's being told to you.  Be extra cautious about information that is given or requested over direct messaging, since the public won't be able to point out risks to you there.

Even 8 months is significantly longer than the majority of people in nearly every country. Everyone that has had some bitcoin for more than 8 months was at the same point as you once in the past.

Glad to hear it. It's very interesting development.

I know 90 year olds that have had some bitcoin for more than 2 years now and that enjoy occasionally discussing bitcoin.  Compared to them, you're a spring-chicken.

You're curious, and you're seeking answers. When it comes to understanding Bitcoin, that puts you WAY ahead of many people I know that are under the age of 30.

I hope my answers and/or the answers others have already provided are what you're looking for, but if anything needs more clarification, just let us know.

Depending on just how much detail and technical understanding you're looking for, in some ways that can be a very complicated thing to understand. The basics aren't too bad though.  You may, however, discover that things you've heard elsewhere, or things that you thought you knew, turn out to be completely wrong. Keep that in mind as you try to learn from what you find here.

Here's the first point where what you frequently hear might not quite line up with the way things actually work.  There are 2 processes that are frequently confused, "validating" and "confirming".

Validating is the process of making sure that a transaction hasn't broken any rules. For example, it must include a valid signature, and it can only spend bitcoins that already exist and are under the control of the private key that signs the transaction. This process is performed by EVERY peer node on the network regardless of whether they are performing any portion of the mining process or not. When a node receives a transaction, if it determines that the transaction is invalid, it will not share the transaction with ANY of he peers it is connected to. That keeps the bad transaction from propgating across the network and clogging up communications. Futhermore, since a node is supposed to validate a transaction before it shares it, if a node receives an invalid transaction it may ignore any further transactions from that node for a period of time (to avoid wasting time repeatedly inspecting bad transactions from the bad node).

Confirming is the process of including a transaction into "the blockchain" so that all participants in the Bitcoin system can agree on which transactions have happened and which have not.

Validating is VERY fast, and uses VERY LITTLE computing power.

Confirming is a somewhat random process, but the software is written to try and keep the AVERAGE time between new blocks added to the blockchain close to 10 minutes. If there were only 1 person in the entire world that was performing this action, then it wouldn't require much computing power or energy.  As more and more people choose to participate in this activity, the computing power and energy requirements go up to keep the average at 10 minutes (the reverse is also true, power and energy requirements go down when there is less participation).

Keeping in mind the difference I explained above, there is no reward for "validation". Every node does it for free. I suppose you could say that "protecting yourself from accepting a false history" is its own reward?

The reward that you seem to be asking about is for "confirmation". That reward is the sum of two things. There are brand new bitcoins that the miner is allowed by the software to assign to themselves (or wherever they like), and there are transaction fees from all the transactions that are included in the block that the miner adds to the blockchain which the miner is also allowed by the software to assign to themselves (or wherever they like). Approximately every 4 years (exactly every 210,000 blocks) the quantity of new bitcoins that the miner is allowed to assign is cut in half. Meanwhile, as bitcoin grows in popularity, the sum of the transaction fee grows. At some point in the future, as the quantity of new bitcoins created gets smaller, the majority (and then eventually ALL) of the reward will come from the transaction fees.


As we've all described, if you're asking about mining, then you aren't really asking about the validation.  If you're asking about the validation, then you aren't really asking about the mining.  Just how much detail are you looking for on each of those processes?

For "validation", does it answer your question to say the following?

• Software checks that the bitcoins being spent in the transaction exist and haven't already been spent elsewhere
• Software checks the total value being assigned to the new "address" is not larger than the sum being spent
• Software checks each of the bitcoins being spent have a valid signature from the private key that they were previously sent to

Or are you looking for more detail about any of those steps?

For "confirmation", does it answer your question to say the following?

• Software selects transactions to include in a "block"
• Software builds a block header for that specific set of transations, containing information about the block such as an identifier of the previous block in the chain, and a timestamp
• Software hashes the block and checks to see if the result satisfies the difficulty requirement
• If so, the block is complete and is broadcast to all peers.
• If not, the header is modified and the process repeats until either a valid block is received from someone else or the difficulty requirement is satisfied

Or are you looking for more detail about any of those steps?

All transactions are generally shared with all nodes regardless of whether they are mining or not. There is nothing FORCING a mining node from sharing the transactions that it receives with other mining nodes, but unless a miner writes their own custom software, the reference node software generally shares all standard transactions with all peers.

Specifically the speed of computing SHA256 hashes is critical. We've reached the point where the hardware that does this is all specially designed to do that, and only that, as fast and efficiently as hardware designers can get it. That hardware would be useless at any other form of computing.

Not exactly. As mentioned, each solo-miner (or mining pool operator) is allowed to use any criteria they like to choose which of the valid unconfirmed transactions they'll include in the block they build. As a practical result, since there's money to be made, generally they all choose the transactions that offer the highest fees per byte. Therefore, they are largely working on mostly the same transactions at the same time. However, since each needs to include a transaction to pay themselves their reward, the blocks will never be 100% identical. Therefore they all get different hash results since they are all hashing slightly different blocks.

Yes, sort of. Since it's effectively a random process, there's never any "progress" made towards the solution. Any single hash could be the solution, and if it isn't all you can do is modify the source data (the block header) and try again.

There are about 144 blocks "solved" per day. Imagine that you have enough hashpower to (on average) get lucky once every 14400 blocks. In that case, you could occasionally be VERY lucky and get the very next hash solution. However, you could also get very unlucky and might not get a solution for an entire year. It would be nice to receive 1/100th of the block reward every day rather than waiting to get lucky enough to get the whole thing, but the blocks don't work like that. This is why mining pools have become popular.  A mining pool can build the blocks and block headers, and then send those out to pool participants to handle running the hashing hardware.  Then, when any single member of the pool happens to get the lucky hash, the pool can can split the reward up and share it among all the participants.

This is going to get a bit more difficult to conceptualize. As others have pointed out, there isn't really anything you can point to in a transaction such that you can say "that's the bitcoin". The word "Bitcoin" is really more of an abstraction that we humans use to make it easier to talk about transferring control over value.

Transactions have "inputs" and "outputs".

An output has a requirement and some value. The value is simply an integer that indicates a total amount of "satoshis" under the control of that output. If someone wants to spend the value in that output, they need to be able to meet the requirement. The most common requirement is effectively a requirement to provide a digital signature of the transaction that can be validated with some data that is embedded in that output requirement. This is how "bitcoins" are "sent to an address".  The "address" is really just an encoding of some data that will be needed for validating the signature.

An input is an identifier that specifies an output from some other transaction, and a bit of data that satisfies the requirements of that referenced output. Referencing an output in this way is commonly called "spending" the output. The blockchain rules only allow an output to ever be referenced ONCE in an input.  So, once a transaction is included in the blockchain, the output that it "spent" can NEVER be spent again. Transaction outputs that haven't been spent yet are called "Unspent Transaction Outputs", typically shortened to UTXO.

So, a transaction gains control over value by "spending" one or more UTXO (listing them in the inputs) from various other transactions and satisfying the output requirements for each of those UTXO (supplying the valid signatures).  It then assigns that value to one or more new UTXO with requirements that someone else has the ability to satisfy, thereby giving them the control over that value.

As you can perhaps see, it's possible to spend just one UTXO, and then create multiple new UTXO each with just a portion of the value from the "spent" UTXO, effectively "splitting" that value into smaller amounts each under the control of multiple others.


Again, as you can perhaps see from the description above, it's possible to use a transaction to "spend" many UTXO, and create just a single new UTXO, effectively "combining" all that value into a single new UTXO.

When the value assigned to a UTXO is small enough, it can cost more in transaction fees to spend it than it's worth. This is commonly referred to as "dust", and that value tends to be trapped in those outputs unless/until someone decides that they don't mind paying a higher transaction fee with no benefit to themselves.

They are not. They are very common questions for beginners, and there is nothing obvious or intuitive about the answers.

Happy to help.

Some brief answers:


There are specific validation rules. Each node determines for itself if a transaction or block is valid. Nodes only send valid transactions and blocks to other nodes. Nodes and miners who don't follow the rules are effectively exiled from the network by the individual nodes that they connect to.


All transactions are distributed to all nodes. Miners are free to choose which transactions are includes in their blocks. Validating a transaction is very fast. The vast majority of a miner's effort is the proof of work.


There are no bitcoins, tangible or intangible. They are really just numbers in a ledger. If you have X bitcoins in your wallet, it means that there are one or more UTXOs in the block chain that are associated with addresses controlled by your wallet, and these UTXOs have value fields that add up to X.

1. When people make transactions, the nodes of the network pass that transaction through the network. Miners pick up that transaction as waiting for approval. Any individual miner can include that transaction in the next block they are working on or not. So miners pick which transactions to confirm in any given block. But only one miner actually confirms each block. The miners bundle up the transactions into a block and perform mathematical calculations, cryptographic hashes to confirm the block of transactions. But there is a specific requirement that the result of their calculations must meet, which is why its so difficult to mine a block and all the miners are competing with each other to meet that specific requirement (which gets harder as more miners are added to the network, easier as miners leave the network, so that blocks always average out to one every roughly 10 minutes).

The Bitcoin protocol sets out the rules of the network, and therefore what is a valid transaction. So miners basically just need to check to see if the transactions they are including in the block of transactions they choose to try to mine are following the rules of Bitcoin. For example, to make sure that the coins in the transaction haven't already been spent. It is a very quick process to verify transactions are legit by the rules of Bitcoin. This system is basically what made Bitcoin the first viable digital currency, because it prohibits forgery and doesn't need a controlling body to do that.




2. Already explained above, the miners choose which group of transactions to put into their block to try to mine. Generally it is done by the transactions that are paying the highest fees. And yes, every single miner except for one loses each block, and therefore gets no reward for that work. But, simply due to the natural forces of economics, the whole mining network is only going to do the amount of work that allows the money from when they do win a block to make up for all the resources they spent on all their losing blocks, right. Cuz otherwise it would be unprofitable is the earnings didn't make up for the cost of operating. Because when that is the case, when earnings don't make up for costs, the less efficient miners drop out of the network because they are literally losing money to participate, and then the difficulty of that specific requirement mentions above in #1 drops, so mining gets easier for everyone, and profit goes up for those that didn't need to drop out of the mining market. So simple economic forces drive the sustainability of the mining market.




3. There is technically no "bitcoin" unit. A bitcoin unit is actually 100 million Satoshis. The Satoshi is the base unit of the Bitcoin network. So if you transact with 1 Bitcoin you don't have one unit of currency, you have 100 million units of currency. The protocol just defines 100 million units as the standard unit to use. So a bitcoin can be split because its not actually a single unit, its 100 million units. So it can be split into 100 millionths. And the actual form the currency takes in the network is "transaction outputs". So if someone sent you 0.5 BTC you'll get a transaction output which is a group of 50 million satoshis, or 0.5 bitcoins. If you then want to send 0.3 BTC to someone, it'll take 0.3 BTC from your 0.5 group and send it to that person, and return 0.2 BTC from your 0.5 group to your address. So now the transaction output you own is a group of 20 million satoshis, or 0.2 BTC. Or if two people sent you 0.5 BTC, for example, so you have 1 BTC, and you want to send someone 0.7 BTC, when you do that transaction it'll send one of your 0.5 BTC transaction outputs to that person, and then split the other one and send 0.2 BTC to them to make 0.7 BTC sent in total, and send back the 0.3 BTC to you as a single transaction output. So in the network, the actual currency is grouped into these transaction outputs. So it's not like dollars where each dollar bill has a serial number to identify it as a unique unit of the currency. The Bitcoin network just keeps track of these groupings of these units of satoshis (or bitcoin, being 100 million satoshis).

So as any specific satoshi is passed around the newtork it gets formed into a bunch of different of these transaction output groupings. That's the only identification of units of currency in the bitcoin network - transactions. So really, bitcoins, or satoshis, are simply units that exist within these transaction output groupings. Satoshis, or bitcoins, don't exist outside these groupings. So instead of bitcoin being like okay satoshi #12912348134 got sent along with satoshi number #81828328, etc (remember, 100 million satoshis in every bitcoin, so if that's how the network worked it would have to identify 100 million separate satoshis being sent if someone sent one bitcoin, which would be an insane amount of data and so this would have made the operation of Bitcoin infeasible), the network says this grouping of 1 BTC (or 100 million satoshis) with the transaction output id of #132482 is being sent. A single piece of data to sent over the network (or several if the amount of bitcoin in the outputs are smaller than the whole transaction), instead of say 100 million pieces of data to send 1 bitcoin.

Think of it like you hold your cash in a few rubber bands, each rubber band has an id number and the amount of money in it written on the rubber band. When you use your money, if you are using an amount larger than any of your individual rubber bands holds, you pay with several of them, splitting one to get change back, or if the thing you're buying is less than the size of your rubber band groupings, you split one. The person you paid puts all that money into a rubber band with its own id and amount of money held in it, and now views it as a single group. And whatever change you got back you put into its own rubber band on which you write an id number and the amount held in it. So essentially what you are exchanging is these rubber band groups, the actual cash never exists outside of these rubber band groups so you don't have to deal with identifying individual dollar bills or cents, only these rubber band groups that specify how much money is in them.

I'm a fairly new (eight months) Bitcoin owner, so have not had a long history owning it, but have been interested in it for some years. I'm also an old guy (78 years) which definitely puts me at a disadvantage with such a technical product. I've got a few questions about Bitcoin, and thought this would be a great place to get some answers.

1. I've heard a lot about the process of mining, and how miners are rewarded for their work with Bitcoins, but it's the process of mining I don't understand. I do know there's a great amount of computing power, and energy, required, and I'm aware the process validates a Bitcoin transaction,with Bitcoins being the reward for that validation, but what exactly is taking place to make that validation, and how does the system both determine it's a valid transaction, and also detect a fraudulent transaction?

2. How are the individual transactions distributed among the miners?  I know that computing speed is critical, but is it a race to validate a particular transaction among multiple miners at the same time, or are the transactions assigned to individual miners? If it's a race, does it mean a miner can do all the work but then get beaten to the finish line and not get any benefit from his work?

3. What happens to an individual Bitcoin when it's split? Is it a situation where a Bitcoin can be reassembled from it's components after it's been split, or will the splitting just continue until all that remains are billions of tiny components?

I'm sorry if these are silly questions, but I really appreciate getting some help to understand the Bitcoin world a little better now that I'm a part of it.